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Sony targets iPhone developers and low app prices for PSPgo

Prince McLean, AppleInsider

Sony plans to lure iPhone developers to the PSPgo, a revised version of its PlayStation Portable handheld gaming platform, and copy Apple’s low App Store prices to create demand for the relatively expensive new hardware, according to a gaming industry report.

Sony targets iPhone developers and low app prices for PSPgo
The article, published by PocketGamer, indicates that Sony plans to deliver a library of online PSPgo games for download through its PlayStation Network at prices of 1, 2 and 5 Euros, similar to Apple’s iPhone apps, as a way to create interest in the new PSPgo hardware, which is expected to cost $250 or £230 (UK prices are not currency equivalent).

The original PSP, unveiled in 2004, was similarly priced at $250 in the US and attempted to sell both games and movies on Sony’s proprietary UMD optical media for around $25-$40. Sony later enabled the purchase of online games for around $20 each.

The UMD format never really took off for movies, and sales of the PSP have languished behind the more popular Nintendo DS. Since 2004, Sony has sold around 50 million PSPs while Nintendo has created a DS installed base of over 107 million over a similar period.

Attack of the iPhones

More recently, the PSP has seen new competition from the iPhone and iPod touch, which offer gaming as a secondary feature to web browsing, email, media playback features, and on the iPhone, serving as a mobile phone. In just over two years, Apple has developed an installed base of 45 million devices, 100,000 registered developers, and 65,000 apps according to COO Tim Cook in the company’s Q3 2009 conference call.

By matching the price of iPhone apps, Sony hopes to stay in the game. The company faces some real challenges in making that happen, including enticing developers away from the already proven iPhone market to sell to a new installed base of PSPgo users.

At the same time, Sony already faces resistance from its existing developers, with Activision CEO Bobby Kotick threatening to drop support for the PS3 and PSP if Sony didn’t lower its hardware prices. Sony insists that it can’t lower its prices and still remain profitable.

Developers, Developers, Developers

Sony must also convince its developers to target projects that can be profitable at such a low price. That will also require a smaller cut of software sales for Sony, which has historically levied a much higher cut from its game developers than the 30% share Apple charges in the App Store.

All of the game console makers expect to earn significant cut of software revenues, and Sony and Microsoft have historically relied on this income to cover losses when selling their hardware. Only Nintendo has consistently sold its hardware at a profit.

In contrast, Apple makes almost all of its revenues from hardware sales, enabling it to levy a smaller cut of software sales to support iTunes operations. The company has repeatedly stated that it aims to operate iTunes at a break-even point, investing its profits into expanding the store’s features.

App Store Approval

“Sony isn’t taking a leaf out of Apple’s book when it comes to easing the process of publishing, however,” the article noted. “[PSPgo] Games will continue to go through formal console-centric Technical Requirement Check (TRC) requirements, as well as a two week quality assurance testing period. Sony will also actively control the release schedule for games, although considering the current disquiet over Apple’s laissez faire attitude to app approval and release, this might not be a bad thing.”

The gaming industry’s general perspective that Apple’s App Store approval process is cheaper, simpler, and easier for developers in comparison to the status quo in console gaming might come as a shock to iPhone users, who are regularly bathed in reports of complaints from iPhone developers ranging from the length of app approval to the $99 cost of signing up in Apple’s iPhone development program.

Sony currently requires developers to pay for a very expensive set of tools and hardware to create PSP games. Despite an 80% drop in the cost of its development tools made this summer, Sony’s PSP software development kits still start out at $1000 to $1500.

After witnessing the success of the iPhone App Store and particularly its appeal to independent small developers, Sony hopes to woo iPhone indie developers into porting their apps to the PSPgo rather than focusing on a few large developers to create gaming titles.

However, Sony will also face competition for attention from Google’s Android, Nokia’s Symbian, Palm WebOS, and Microsoft’s Windows Mobile and Zune platforms, all of which are actively courting iPhone developers’ attention in similar hopes of replicating Apple’s success in selling mobile apps online.

  • http://blog.cytv.com cy_starkman

    Sony can’t drop prices, cause they’d make a loss. Sony is already making a loss.

    One cannot imagine how Sony and MS can lose so much money each quarter in the console market and still be considered part of the game.

  • Brau

    Will Grampa buy a Sony PSP? Doubtful. Will he buy an iPhone, use it as an extension of his Mac desktop, buy a few useful apps and a maybe some games too? Quite likely. So will the kids. Vive la difference!

  • stefn

    And the pundits complain about Apple’s treatment of developers’ apps. Why do the game-cos get a pass?

  • John E

    Sony IS the tech equivalent of General Motors. it is currently falling apart in slow motion. a financially- forced breakup and “restructuring” is inevitable within 5 years. why? the reasons are very instructive.

    first it attempted to become an all purpose media company with the purchase of CBS records and Columbia motion pictures back in the c. 1990 era of “conglomerates.” but the entertainment half and the original tech/consumer goods half have never ever been able to fit together. Tokyo and Hollywood just don’t mix. the only solution to that mess is the inevitable break up back into two companies.

    then its version of the top-quality-hardware-at-premium-price business model – very similar to Apple today – ran out of gas this decade. going back to Betamax in the 70’s Sony engineers consistently lead consumer product technology development. its Triniton CRT’s were always the best TV’s. its audio/video tape products were always tops – Walkman, camcorders, etc. BluRay is the last hurrah of this tradition (but what good has it done Sony’s bottom line?).

    but now consumer technology has advanced so much in recent years that much of the cheap stuff is – for consumers’ needs – often just as good as the premium stuff. adding bells and whistles and higher spec numbers that are practically meaningless just won’t get buyers to pay 25% higher prices for a Sony product anymore. So for example Samsung is now wiping out Sony in the HDTV market that until just two years ago was a huge money maker for them.

    and Sony has never really found its place in the computer revolution. its VAIO brand of high end Windows PC’s does ok, but, stuck with Windows, there is no Sony “ecosystem” that goes with it. Sony/Ericsson smartphones, the PSP, the PS3, and the many Sony video/audio products, there is no real connection among them. Sony has tried to tie things to together with proprietary gizmos like the Memory Stick and linked services (now under the BRAVIA moniker). but except in Japan they never add up to a critical mass of users.

    gaming is a particularly sad case where Sony’s one-time dominance with the PlayStation and PSP has been crushed by Nintendo, while Microsoft has won the high-tech market from the PS3 even with an inferior product, the XBox 360 (thanks solely to buying the game – Halo – most addictive to teenage boys).

    and of course Sony got caught flatfooted and unprepared in the digital media revolution by Apple with the iPod – the “Walkman killer” for real – after trying to push propriety media disc formats instead for a decade that no one bought.

    Sony has never understood consumer markets (except technophiles) outside of Japan. its SonyStyle stores are pathetic. its advertising – what advertising? its customer service – what service?

    no one is going to buy the remnant Japan-focused Sony that will be left once the entertainment division is spun off. eventually it will probably merge with one of the other big but stagnant Japanese electronic companies.

    its too bad. Sony had great engineers, but terrible executives.

  • tinytim09


    REDMOND, Wash. — May 28, 2009 — Microsoft Corp. announced today that sales of Xbox 360 consoles have passed the 30 million mark globally, with its Xbox LIVE community swelling to more than 20 million active members. After the biggest year in its history in 2008, Xbox 360 achieved the highest percentage growth in hardware sales of any console so far in 2009, up 28 percent over the previous year.1

    [“Growth” in Xbox 360 sales is largely related to console exchanges resulting from bad hardware. The failure rate is extremely high (over 50-60%! Google it). Nintendo’s console, which has been on sale 2 of the last 3 years of the Xbox 360, is above 52 million units, and not because of returns. Also, Microsoft loses money on hardware, while Nintendo profits from hardware sold. So no, the Xbox is still a commercial failure, despite Microsoft’s spin. Notice I wasn’t arguing whether you like to play video games or not. ]

    The success of the platform can be measured across the business, with Xbox LIVE now considered the world’s largest global entertainment network. Increasing consumer desire to connect with friends, download and enjoy blockbuster movies and TV shows, and extend the life of their favorite games has been the primary driver behind the growth of Xbox LIVE membership and the reason Xbox continues to expand offerings on the platform.
    To date, consumers have downloaded nearly 1 billion pieces of gaming and entertainment content from Xbox LIVE Marketplace, including a broad array of premium high- and standard-definition movies and TV shows from top studios and networks around the world.2

    In addition, Xbox 360 continues to be the platform of choice for the industry’s top games, generating $5.9 billion in sales to date at U.S. retail for third-party publishers, which is more than those of current-generation consoles combined.1 Xbox 360 also leads current-generation consoles in game purchases, with consumers owning an average of 8.3 titles each.1

    Activity on Xbox LIVE, the industry-leading online gaming and entertainment service, surged following the launch of the New Xbox Experience in November 2008. Since that time, the community has recorded a 136 percent increase in new members, TV and movie downloads have more than doubled, and purchases of games, Game Add-ons and more on Xbox LIVE Arcade have increased by 70 percent.2 Xbox LIVE reaches 26 countries worldwide and is now in more homes than any satellite television provider.2 Before the end of the year, the number of Xbox LIVE members will surpass the number of subscribers to the largest cable provider.1 Consumers can expect more exciting announcements from Microsoft next week as Xbox 360 kicks off the Electronic Entertainment Expo (E3), the world’s premier trade show for computer and video games and related products, with its press briefing on Monday, June 1, in Los Angeles.

  • KenC

    @tinytim, You know, the key metric that the MS press release choose to ignore is the most important, profit. The Xbox division, has lost money the last two quarters. That’s how most companies measure success, because without profits, well, you know the rest.