SUMMARY: Sony is being choked out of the portables market. NDS and iPhone, as well as other products, ie kindle / iPad are filling in the open portions of the market. The competition is so intense that Sony has lost all the advantages that the portable market is defined by. In order to compete successfully, Sony needs to either compete directly against the competition by releasing a clone, or by trying something completely new.

Details below.

PSP is starting to age badly. The console is sold mainly on the games it has targeting the rabid fans of those franchises, ie Monster HUnter, Idol Master.

Originally, the thing that made consoles and portables explode was that they had marked advantages over the competition. Consoles delivered gaming for a quarter of the hardware price and 100% more reliability without requiring any upgrades to core components. Portables did the same but with consoles on the recieving end. POrtables were cheaper, had all the same advantages of consoles vs PCs, but were, at first, a twentieth the price of laptops, the only other portable systems.

Looking at the market now, netbooks, cheap laptops, and smart phones have taken the place of the laptop vs portables. Using the Iphone as a basis for comparison, a portable gaming console now has no real advantages. The Iphone doesn't need upgrades, it always performs reliably, is affordable, popular, and also sports the advantage of being a phone too. Also, with the release of a new app called Line2, for 15$ a month, any iphone (or even IpodTouch) can have a phone line with an 800 number and makes calls over the internet for free.

So, what to do?

Nintendo has the right idea because they are taking a product (3d) and making it so accessible, without the need of glasses, and cheap, that it is going to swallow a big portion of the 3d movement. That is their new advantage. However, they also have the benefit of huge 1st party brand recognition, and a reputation for making great games.

However, Nintendo doesn't have the advantage of being a phone. So the way they stand, Nintendo is on one end and the iphone is on the other. From the Sony perspective, there is really no room unless they do somethign completely new, or engage in red ocean with both of them. However, there is nothing really new that they can do. Anything they can think of, software wise, can be done on the Iphone, and gaming is stronger on the DS. The only avenue is new hardware, or stealing 3d.

One particularly interesting idea I've been throwing around is a shades based console, similar to the one used in Heavy Rain. A pair of sunglasses and a glove could be amazingly accessible and has a lot of potential for improvement. Additionally, if the hardware was engineered well enough, multiple people could play on the same system, using different pairs of glasses and have a truly unique experience with it.

This could be easily done at a low price without any problems if it is engineered correctly, and it would open up a completely new market. It also has many distinct advantages over the others.

However, barring a new hardware type idea, the only option Sony really has is to steal the 3d idea from Nintendo, shamelessly, and compete directly with them. This is because not only is Nintendo going to disrupt the console 3d market, but psp is in a position now where it is being choked out of the portable market. However, if looking at Nintendo for the past three years has taught them anything, it's that Sony needs to compete directly with Nintendo in the future and stop allowing them to take new markets...because pretty soon they will all be gone.

The biggest thing Sony can do is start selling before the new Nintendo handheld. It worked for the Xbox and if they can launch their own portable this fall (or christmas), it would mean taking some spotlight (and if they have the same features, also the same fan base) away from Nintendo.

I don't think they should venture to this shades-idea, as it means another gamble, which they have taken with the PS3 and are still recuperating from.

the ps3 was not a gamble, it was the logical progression of hardware development. The blu-ray portion of the ps3 was meant to disrupt the HD market, and did so. It won the HDDVD war, and secured Sony a long needed successful format.

ANyway, launching first would work, IF they had the same features, which means that they would need 3d and bring red ocean to Nintendo, like I said in the OP.

Remember, Nintendo has brand strength over PSP, but also has the benefits of expanded market like reading, self-improvement and learning software etc etc. Sony will need its own 3DS in order to compete. The problem with this strategy is that Nintendo has been planning this for a long time and will surely have some aces up its sleeve should Sony copy them.

I forget who mentioned it earlier, but it's possible that Nintendo has some related tech involved in the 3DS and will show it right after Sony follows the 3d move, and blow it out of the water.

I meant as gamble financially and how they repositioned themselves with Move and 3D. I doubt they're going to go bold on the next psp, that's why I said gamble, sorry for the mix-up :)

Ah ok, I understand. But even as a gamble, Sony is so hypoxic in the portables market that any direct competition is not only going to be difficult, but also unprofitable. Additionally, the UMD format is dying and DD is already on the iphone... and hasn't quite migrated to the pspgo at all, which thay are also handling pretty poorly.

Sony needs to shake things up a bit. Make something they can afford to lose on and try something new.

they are going to play it save next gen that's for sure.
the good news is new PSP will have access to the psn in more ways, and a better music, movie playback.

only thing i dont see if it's going to be full digital distribution, market isn't ready yet

I think they will play it safe too, but I hope they also try out the shades console too, as a secondary system. I don't think anybody really wants a new and improved psp2 except the core, and the core market isn't that big. Additionally, the problem with the core is that it has easy competition. All you need is better graphics and the same games and there's a big problem. This is frightfully apparent with Sony, who doesn't have much in terms of 1st party recognition, and the main psp sellers being 3rd party games.

I think Sony is going to have a much harder time with the PSP's successor. When the PSP was being introduced the Sony name was considered by many as the dominant name in video games, something that is no longer the case. They also now have to worry about many more players in the field and possibly skeptical developers that won't want to pour the resources needed into a hand held that could be the most expensive to develop for.

You just have to imagine if it were made attractive. People wear shades all the time. If you could make a pair that were sleek, unobtrusive, and inconspicuous, it could do a lot.

In Heavy Rain, there was a part where the detective was sitting at a chair waiting for a meeting to end. In that part you can put on the shades, and throw a holographic ball against an invisible wall. According to the credits, there was also a game in which tanks rolled around on a table and fired at each other. This is a very cool concept, and would be very viable in the future because:

-it can be a phone
-you could have varying opacity levels
-you could play despite weather (too hard to  play a handheld in the rain or in bright sunlight)
-you could read without having to hold anything
-etc etc

well 1st thing nothing will ever beat the gameboy brand ie gb gba gbsp ds dsi dsl dsxl etc

but what they can do is make a handheld console that is cheaper

value for money can be argued all day but price point cant.

people do buy psp and its certainly a good device but its to costly, and many people who buy, get it for other than games.

imo they need to release a unit thats around £119 with carts instead of drive, possible touch screen

id be happy with a ps1 like grafix but with built in smoothing.