The hunt for the Sony PSP phone is on, and games blogs and wireless papers all over the world are having a stab at it with one data sheet emerging this week saying that it will have a 2 megapixel camera, a built in web browser, a flight mode, so you can play games while on a plane without jamming the aeronautics, weight just 250 grams and has a 4.3 inch screen using 16 x 9 video with 480 x 272 pixels.
This spec is of course uninteresting, because any moron could have copied them from the PSP spec, because the screen is the same and the rest is unexceptional as a high end handset.
But the big issue that is being debated, though not resolved, is whether or not this is a handset which can play PSP games or this is a PSP that can take calls ‘ the truth is that both are possible and both are likely, and Sony already markets a PSP applications that offers voice over wi-fi.
The phone was first mooted last Summer when Sony watchers unearthed patents for a device where the screen would swivel, uncovering controls that made it look just like a PSP in one formation and just like a phone in another.
We followed that up this week with news about yet more patents, a touch screen where buttons would raise for one application, and then slide back down level with the screen, and gesture control, using the Eye Toy software.
Looking for clues from patents is a lousy way of predicting the future strategy of a company like Sony and its handset division Ericsson, because the incorporation of patents can take years.
First off we have to remember that Sony Ericsson currently makes a profit, and the games division doesn’t. Games will strengthen, but were held back by two huge steps which cost legendary PlayStation designer Ken Kutaragi his job in charge of PlayStation ‘ the reliance on a massively powerful complex chip, the IBM Cell chip, for the PS3, and the fact that the devices HAD to sell with a Blu-ray disk drive inside them, or Sony would have lost the HD disk war. So although the gaming division doesn’t currently make a profit, the entire $88 billion Sony operation owes it a favor right now for coming through for Blu-ray.
Already the Sony brands of CyberShot cameras and Walkman portable media players are alive and well within Sony Ericsson, and were responsible for much of the growth in handsets sales for the past quarter. So the idea that Sony won’t trust Sony Ericsson with the PlayStation brand, doesn’t seem to hold true.
And in terms of devices and profit Sony Ericsson is the company that holds the high ground ‘ it shipped 30 million devices in the fourth quarter of last year, and its fourth financial quarter to the end of March was 22 million, while the Sony PSP has shipped just 14 million devices last year in total, around 3.5 million a quarter, a fraction of the handset division.
Interestingly the PSP will have made a very small profit since it relies on games subsidies to bring the division into positive territory. So those saying that Ericsson should be forced by Sony to sell some of its 50% ownership in the handset company, before Sony should let it use the PSP brand, don’t understand how things happen in the games industry. If Sony Ericsson helped Sony ship more games, Sony would make all the profit.
The Sony PSP when it was launched was around $650 of hardware on the market for $250 with the massively profitable game sales providing the rest of the financial equation. That will have changed now, but still it is the games that do the damage. So in order to get Sony Ericsson to make a device which will give it far less margin than its existing handsets, quite a lot of decisions have to be made regarding the price of the device to operators, and whether any subsequent games revenues could be allocated to pay for it.
So when rabid PlayStation insiders phone up gaming sites and say ‘No way are we ever going to give our PlayStation brand to the handset group,’ what’s actually more likely is that the handset group are holding back asking, ‘how are we going to make money if we add gaming,’ and asking for some of the games sales revenues. Which is perhaps why we have been waiting for a year for a PSP handset and it has not emerged.
But Sony Ericsson is now in something of a bind. Nokia has re-energized its Ngage portable gaming effort this year, and made it into a software platform that can be incorporated into many of its existing handsets. We know that Microsoft is working towards a portable Xbox, out either this year or early next which will harm PSP, and Apple’s App store opens in just a few days, with Steve Jobs telling the New York Times that it will open up with over 500 applications with games making up a third of them.
Overnight the iPhone could become the de facto gaming handset on the market, and while other companies like Samsung and Motorola will lose nothing from that, this strikes straight into the heart of Nokia’s Ngage efforts, and cuts off all the oxygen of a Sony Ericsson gaming move. So its F305 handset that launched a few weeks ago ideal for games, but launched without the Sony PlayStation brand, is way too little, and it may be too late.
Sony’s new CEO Howard Stringer has to prevent the various fiefdoms that split Sony into around 6 separate companies, undermining his company’s efforts to bring the PlayStation brand to handsets. If there is no Sony Ericsson handset which plays Play Station games out by this Christmas, then Apple will covertly steal the gaming high ground on phones, which would be a Sony disaster.