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Commentary > Game Over
Another delay for Sony's PSP?
Activision CEO predicts Game Boy competitor won't hit U.S. until as late as June 2005.
August 19, 2004: 9:21 AM EDT

NEW YORK (CNN/Money) Sony, which has already delayed the U.S. launch of its PSP (PlayStation Portable) from the 2004 holiday season to the first quarter of 2005, might be forced to push back the handheld gaming system even further, according to the CEO of a major video game publisher.

Activision CEO Bobby Kotick told investors yesterday that his company does not expect the PSP to launch in North America until the second quarter, according to an analyst note from P.J. McNealy of American Technology Research. That could conceivably push the system's launch back to June 2005.

Sony (SNE: Research, Estimates) disputed Kotick's statement.

"We have not discussed or given any indication that an adjustment to the PSP launch window is on the horizon," said Molly Smith, director of public relations for Sony Computer Entertainment America.

Wall Street, though, is skeptical of Sony's timetable.

"We have maintained that it has been at best a 50-50 proposition that Sony will make its scheduled holiday 2004 Japan launch, and any delay in the Japan launch would likely push the North American launch out of the March quarter," wrote McNealy. "We believe the next significant update from Sony (including any possible schedule changes) will come in late September at the Tokyo Games Show."

Boasting roughly the same graphical quality as the PlayStation2, the handheld PSP will play movies and digital music in addition to games. Sony Computer Entertainment president and CEO Ken Kutaragi, when introducing the machine in 2003, called "the Walkman of the 21st century". Games and other forms of entertainment will be stored on a new device known as the Universal Media Disc, which Sony said will hold three times as much data as a CD-ROM.

The PSP will play games, movies and music.  
The PSP will play games, movies and music.

While the system has received significant consumer and developer interest (nearly 100 publishers have committed to make games for it), Sony has not been particularly forthcoming with several details.

Foremost among those has been the PSP's price. Most analysts and executives expect the device will retail for somewhere between $199 and $349, but Atari CEO Bruno Bonnell caused a stir in June when he predicted the PSP would retail for as much as $500.

Battery life remains a big question mark as well. In May, Sony predicted gamers would be able to play for roughly 10 hours before having to recharge the device's lithium-ion battery. Listening to music, it said, would result in a battery life of approximately eight hours. And when it's used as a portable movie player, the PSP's battery would last 2.5 hours.

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Developers were openly skeptical of those numbers immediately. And those putting games together for the system say Sony has urged them to avoid streaming game levels from the Universal Media Disk, to lengthen the system's battery life. (Peripherals such as CD drives, which are similar to the UMD, drain batteries faster.)

The PSP was originally scheduled to go on sale worldwide this holiday season. In February, Sony pushed back the U.S. launch of the system to the first quarter of 2005, but said it still planned to launch on schedule in Japan.

Software publisher earnings aren't likely to be greatly affected if the system does get further delayed. Electronic Arts (ERTS: Research, Estimates) and Activision (ATVI: Research, Estimates) have modest sales expectations for initial games, said McNealy. And THQ's (THQI: Research, Estimates) guidance included no revenue from PSP software through March of next year.

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Any delay could only work in Nintendo's favor, however. Its Game Boy Advance is the machine to beat in the portable gaming market and many industry insiders question whether Sony will be able to assume a market leader position in the field. Meanwhile, Nintendo remains on track to release a second handheld gaming system this holiday.

The Nintendo DS will feature two screens and a touchpad, and will include Wi-Fi capabilities. In addition to proprietary software, the DS will also be backward compatible with all previous GameBoy titles.  Top of page

Morris is Director of Content Development for CNN/Money. Click here to send him an email.

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