When Sony introduced the PlayStation Portable, it entered a portable console market with fierce, entrenched competition from the incumbent Nintendo, and the powerful widescreen handheld was outsold by the Nintendo DS and its later derivatives. Sony couldn't attain the market share it needed to steamroll existing competition.
With Sony's announcements this week, however, the PlayStation purveyors seem to have found a way to take their one-two punch on the road with a strategy that takes the PSP and segments its evolution.
Sony's beastly next-generation portable, with advanced components such as a 5" OLED display, quad-core processor, and optional 3G modem, calls out to the enthusiasts in more ways than one. Its premium components attract the diehard gamers, even as they likely push the NGP price north of $249 -- the price of the Nintendo 3DS and the original North American PSP -- such that those enthusiasts may be the only ones to afford the system at launch.
Simultaneously, Sony is expanding its gaming footprint with the release of PlayStation Suite. Whereas NGP is clearly highly optimized hardware for gaming, PlayStation Suite is "hardware-neutral" and will run on multiple Android smartphones (and perhaps eventually other Android devices like Sony's own Internet TVs powered by Google TV). While PlayStation Suite will start out with aging PSone titles rather than newer PSP fare, it nonetheless extends the PlayStation legacy in the mobile realm while offering Sony a rival platform to the Xbox Live integration within Windows Phone 7 and perhaps Apple's Game Center.
But not a perfect one. Those mobile Xbox Live games and iOS titles are not only integrated into online social networks that include such features as friend lists and achievements absent from PSone games, but are also – like virtually all mobile apps -- optimized for a modern touch experience. And while Sony can tap into the sprawling and rapidly growing market for Android handsets (and possibly the emerging one for Android tablets), its own sister Sony Ericsson group has so far captured only a small fraction of it. Finally, PlayStation Suite titles will need to compete with the teeming masses of smartphone games that aren't part of either network.
On the other hand, unlike in the home console market, where the software dollars poured forth from consumers who had already bought Sony hardware, PlayStation Suite has a different opportunity here. It can drive exposure to the PlayStation software and brand on a device where Sony might have no other presence. Should consumers like what they see and get hooked by the Sony-exclusive franchises on offer, it could lead right back to interest in Sony's high-end hardware.
Ross Rubin is executive director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own.