Sony NGP announced, likely to lose to 3DS

Thursday saw the announcement of the successor to Sony’s PlayStation Portable, codenamed NGP or  ´Next Generation Portable´. Up until now, I was busy producing this report about all devices scheduled for 2011 (in German). As expected, the device will feature an OLED display and impressive hardware power. Apparently, porting PS3 games over to the new handheld will be a simple task and content does not have to be scaled down much. The only real innovation lies in the controls. Besides two analogue sticks and a directional pad, the NGP will feature a touch-sensitive panel on the back of the device. It also comes with built-in 3G for online gaming and downloads, although I have significant doubts whether 3G is fast and reliable enough for constant connections.

What is interesting is that Sony is developing a two-tier strategy in this field. Alongside the NGP, the company has announced the ´PlayStation Suite´, a new marketplace with less hardware hungry PlayStation titles, aimed at Android smartphones and tablets with a set of minimum specifications. Undoubtedly, the yet-to-be-announced ´Xperia Play´ by Sony Ericsson will be one of those devices. The underlying idea seems to be that ´PlayStation Suite´ will be the bait to get users to eventually buy an NGP for the full experience. The new marketplace is also expected to connect the Android devices with the NGP and the PlayStation3.

While it seems at first that Sony is employing a completely different philosophy to Nintendo here – pursuing perfection of existing technologies rather than innovation – there are also some similarities between the NGP and Nintendo’s 3DS, which will be available at the end of March in Europe and North America.

Both devices feature augmented reality games and social services. The NGP will offer ´Near´, which shows other owners in your vicinity, what they are playing and how far they have played. The service will also record your own movements. The 3DS will offer ´Streetpass´, which automatically connects to other devices near you to transfer data and virtual goods (similar to the tag mode in ´Animal Crossing: Wild World´ or ´Dragon Quest IX´). While some experts point out that such features are really only effective in Japan, where a large part of the population lives in densely populated areas, whereas they will be practically useless on other territories, the issue of data protection remains. These handhelds will require careful adjustments of the privacy settings, which will hopefully be in place, to make sure the owner actually wants to share his data.

I already asked the question whether the 3DS will hit markets too late and at too high a price. With the NGP officially announced for the holiday season 2011 and a delay until spring 2012 a likely move given Sony's track record, I no longer believe that the 3DS will come too late. The price of around $250/€250 remains painfully high, though. Especially given how the 3DS lacks the high class finish of the DSi XL or, indeed, the NGP. It will sell well regardless, but I would have preferred a price point of $200/€200 for consumers to buy the device without remorse.

Analysts expect the NGP to be even more expensive, at $300/€300 or above. Regardless of how well produced the device will feel, this will price Sony out of the market, for sure. I do not think that anyone who will play the odd casual PlayStation game on his Android device will want to invest that much into a dedicated gaming device. I certainly would not. It takes an innovative and unique feature like 3D to convince me to spend this type of amount and I will do so only grudgingly. Also, the NGP will encourage plenty of ports from the PlayStation3. So I expect a fair bit of cannibalisation between the new handheld and its home console sibling. While I expect ´PlayStation Suite´ to be a fairly successful service, the NGP is almost bound to fail and sell even less than its predecessor. The 3DS, albeit at a steep price, will sell extremely well, though. My guess is that Nintendo will sell more than 20 million units in 2011. The company expects to sell four million units in the first four weeks of availability in Japan with barely a week's availability in Europe and North America.

EDIT Codemasters CEO Rod Cousens has weighed in on the debate about the NGP price saying that "my hope is sub £200 (...) but I suspect something in the £229 - £249 [range] to be more likely." He continued that Sony had learnt "the lesson of over-engineered hardware" with regard to the original PSP. They have indeed and more obviously so with the PlayStation3. Back in 2006, they were losing up to $300 on each unit sold. Meanwhile, GameStop has posted an estimated price of $999,99 for the device, probably as a marketing trick, but taken the site down since then.

EDIT Now, Ubisoft's executive director of EMEA, Alain Corre, has gone on record to say that he expects an attractive price for the NGP: "I trust Sony to know their market very well and to be able to offer a price that will make their machine attractive. (...) If Sony can capture this huge market - and they do have a unique offer for that market with the NGP - then success will definitely be on the agenda for them."

I absolutely agree. As long as Sony manages to keep the price below €300 / $300, the device will sell successfully, I believe. But, comparing the 3DS and NGP, if you have to pay a premium for a machine that offers, albeit far more detailed, 2D graphics only, Sony will not be able to convince enough punters for the console to become a success.