Why Sony made the Playstation Vita

Maybe others online and in the press have said this but I finally figured out why Sony came out with the Vita even though the market for such a device is shrinking. If anything, the general thought was that Sony should have already come out with a PSP smartphone by now or released the Vita as a smartphone instead of just as a gaming portable.

So why didn't Sony do this? In October of 2001, Sony created a joint venture for cell phones with Swedish telecommunications company Ericsson. While details of the deal are not public (to my knowledge), like many other joint ventures, it is very likely that Sony and Ericsson agreed to terms that block each individual company from competing with the joint venture. In short, if Sony wanted to make a PSP smartphone, that smartphone would have had to be a product of the joint venture. In the case of the PSP, that would mean that PSP intellectual property would need to be transferred to the joint venture (read: Ericsson would own 50% of the PSP intellectual property).

Of course Sony would never let Playstation IP to be transferred or even sold to some other company considering that Playstation is the only consumer product that currently makes an occassional profit. Fast forward to October 2011 (10 years -- yes, the deal probably had some 10 year "out" clause) and we have Sony spending about $1 billion to buyout Ericsson's piece of the joint venture. So that would mean a green light for a Sony Vita Phone, right? No, because the Vita portable is already designed, is already in production, and has a release date. More importantly, Sony has made promises to game developers about the release and plans to support and market the release. That is, the Vita has to come out.

You may ask that if Sony was going to buy Ericsson, why not design a phone and release it as soon as the deal is done? Primarily, Sony is really a collection of very independent divisions of which Sony Computer Entertainment (SCE) is just one. They are charged with creating their own business plan and their own profits (hence the lack of interoperability with products from Sony Electronics). Since the PSP was released in 2005 and its revenues were waning, SCE had to move forward with a product and was probably not able to predict that any deal with Ericsson was even going to happen -- $1 billion is a lot of money. Also consider that any leak of a PSP phone being in development at SCE would have given Ericsson more leverage in the buyout negotiations. So SCE was probably told to not do any smartphone design.

You can fill in the rest of the details as to why the Sony Ericsson Xperia phones came out and why SCE would only allow PS1 games to be released for Xperia. And yes, I strongly believe that a smartphone based on Vita technology is being worked on somehow at Sony now that the joint venture is history. I think that we will hear about this product this year and that Japan might even get this product this year.

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Sony NGP Open Questions

 I’ve been listening to some podcasts (Bombcast, 8-4 Play) discussing the upcoming Sony NGP (a.k.a. PSP2) and I’m very curious into how it plays out as a product.  I thought it would be useful to put the key open questions on the NGP (as I see them) in one place.  Some of these open questions pretty much apply to the Nintendo 3DS as well.

1) Have today’s smart phones made portable game devices like the NGP obselete?  Will people carry around a second device?
Opinion:  I think many people say it as a foregone conclusion that NGP and 3DS are obsolete device types due to smart phones but I think that is more because iPhone and Android devices have surpassed the now old PSP and DS with their much newer hardware.  A compelling portable game device can change people’s minds.  That said, an NGP phone would still be a great idea in my Opinion, if it was well executed.  Of course now Sony has created a situation where a true NGP phone would confuse the market since the the Xperia Play is out there.

2) How will the NGP be priced and sold?
Opinion:  Almost all advanced Sony products (TVs, laptops, etc)  are a little or a lot overpriced.  I hope the NGP comes out only a little overpriced, but Sony scares me in this regard.  For the US, a subsidized NGP at $99 plus $15/month for 3G would be very cool and could be quite successful.  Even at $149, it would likely do well.   The full, unsubsidized price should not be more than $399 which is still steep in this market.  I really hope Sony does their research on this and tries to grab some market share.

3) How will the NGP with 3G work?
Opinion: The 3G can’t be for downloading full-priced games -- they can come out to be 1 or 2 GB which would be quite slow and probably not make the mobile providers very happy.  However, the 3G could be good for downloading “minis”, for saving game state into the cloud, for light-bandwidth multi-player games, and possibly for Skype.

4) What is the highest price that the NGP can sell at and still be a success?
Opinion: $399 if it comes down in price quickly.  I think $249 would be the right price considering the quality of the hardware with the need grab market share from the 3DS and iPod Touch.

5) Are home console-like games a bad idea for portable game systems?
Opinion: Probably but the PSP’s version of these games were always limited by the lack of a second analog stick and by the fact that the PSP’s one analog stick is not very good.   The NGP seems to do analog sticks correctly so I think the real test of this concept will come with the NGP’s release.

6) Is the NGP better than iPhone in any reasonable way that matters?
Opinion:  Buttons and dual analog sticks are known to be great for controlling games.  For action games, they are clearly better than touch-screen controls and will likely stay that way.  Yes Apple can make the entire iPhone a capacitive touch surface and that could make for more interesting controls and Apple could even start selling a branded “button-frame” for the iPhone, but quality built-in controls are probably going to be better for the foreseeable future.

The NGP also has a quality graphics processor and a 5-inch OLED screen.  Put together, the NGP is offering something over the iPhone for at least some time.  If a 5” iPhone comes out, Sony may need to reconsider things.

7) Are home console-like games the only games we will see for the NGP?
Opinion:  Maybe initially, but the sheer variety of control types on the NGP means that it can support a range of game types from very casual iPhone-like games to very involved home-console like games.  Developers can see that and will hopefully surprise with some great, innovative games.


 

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The next XBox and media

I think the next XBox will have to include a proprietary flash-card format (yes, a cartridge) much like the Sony NGP will have and many Nintendo consoles have always had.   This is because the DVD format is already getting very tight for current-gen games and Microsoft would never license the Blu-Ray format from the Sony-led consortium.  The DVD player will still be in the next XBox for compatibility purposes and maybe even for new games, but publishers will have the option of this card format for releasing games.  An 8 GB flash card can be had for $7retail already and I think the 16 GB are close to dropping into that range soon as well. 
 
This is my speculation, at least.  We'll see.

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