Is the PSP Hurting the PS3?

Sony likes to refer to its lineup of video game consoles as a "family". But just like in a Wes Anderson movie, each member of the family has its own quirks and character flaws. First, there is the condescending older brother PS2 who thinks he knows everything just because he sold 100 million units like, a decade ago. Then there are the two younger siblings, the PSP and PS3. PS3 thinks she is pretty hot and has the hardware specs to support that claim. Unfortunately for everybody, the petulant young PSP just refuses to play by the rules and risks cocking the whole thing up for everybody. Here’s why.

Brand Perception
In North America and Europe, the PSP has struggled since day one to attract the kind of third party software support enjoyed by Sony’s other consoles. Even the first-party offerings have been somewhat slim, spaced apart in 6-month intervals. The common perception among potential consumers in the West – correct or not – is that the PSP has been somewhat of a failure for Sony. This is not really true if one looks at the numbers, of course, but the perception that the device has few games and has failed to catch on is a common one echoed throughout internet message boards and high-school cafeterias everywhere outside of Japan. How does this hurt the PS3? A string of Sony missteps, which began sometime around the “All I want for Christmas” blog, have carried over to impact marketing and public perception of the PS3 console. Before the PSP, Sony was a company that, like King Midas, could do absolutely no wrong in the hardware marketplace. The supposed failure of the handheld device has put Sony’s guaranteed success in question.

Lack of Differentiation
It would be hard to make the competing argument that the Nintendo DS hurts sales of the Wii home console. That is because Nintendo has done a fantastic job differentiating its handheld and console offerings. The Nintendo DS offers and experience that simply cannot be reproduced on the home console, and vice-versa. There is no danger of one or the other devices cannibalizing the other. Not so with Sony’s consoles, where ports of the PSP’s most popular games turned up on the PS2, and where downloadable PSN games like Super Stardust Portable and Pixeljunk Monsters are making their way to the handheld. The presence of these downloadable titles on other platforms has probably not caused too much damage to sales on the PS3. However, a flood of poorly-conceived PS2 ports did their part to reduce public confidence in the PSP, contributing to the perception of failure discussed above.

Spreading resources too thin
In 2008, Sony mounted a considerable counterattack against detractors who claimed that the handheld was a failure or that it had a limited games library. Sony has spent money convincing studios to direct time and resources to creating top-quality PSP titles, in a bid to rescue it from a massive games drought. Two examples of this strategy at work are the upcoming Resistance: Retribution prequel and the super-secret LittleBigPlanet PSP project underway at Studio Liverpool. Resources that Sony and first-party devs spend trying to resuscitate the PSP outside of Japan are resources that could be used to create a wider array of PS3 games, at a time when the console badly needs them. The Japanese company recently announced plans to lay off approximately 8000 employees worldwide in a bid to reduce expenditures in an uncertain economy. If the performance of the PSP is contributing to Sony’s cash deficit, then there can be no doubt that it is also indirectly affecting the success of the PS3.