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Analysts cautious over Sony's PSP

"I don't think Sony has hard data to back up their sales target of 3 million units. There are many portable games available, but Nintendo has stably dominated the market. It would be very difficult to take away a large share in the market."

Takashi Oka, game industry analyst at UFJ Tsubasa Securities.

The planned launch of a portable edition of Sony's hugely popular PlayStation game console series is eagerly awaited by game fans and retailers here, but analysts are more cautious about a product claimed by Sony to be as revolutionary as its Walkman.

Sony Computer Entertainment Inc unveiled the PlayStation Portable (PSP) at Electronic Entertainment Expo in Los Angeles, the world's largest game trade show earlier this month, although Japanese gamers will have to wait till the end of the year to get hold of one.

The PSP is Sony's weapon in the battle to win a share of the ?400 billion (US$3.5 billion) global market for portable game consoles, a segment currently 95-percent controlled by the Nintendo GameBoy series.

Sony boasts the hand-held console, measuring 17cm by 7.4cm and weighing 260g, will be capable of producing graphic and sound quality equal to Sony's hugely popular PlayStation2.

"The display screen appeared very big and showed very clear images," said Kenji Saeki, a technology journalist for GameWatch magazine who tried a mock-up of the PSP in Los Angeles.

"With the PSP, Sony is targeting adult men aged between 18 and 35, who have high disposable income but not much time at home to play with home-use game consoles. I think the product is attractive enough for the targeted group," Saeki said.

Businessman Kenichi Ogawa, 35, said he would probably buy one when the PSP hits the market.

"I would not want many fancy functions, just good visuals, good games and smooth control would do for me," he said as he surveyed game stores in Tokyo's Akihabara electronics district. "The price will be the main concern for me."

Sony has not announced the retail price, but Japanese media have suggested it is likely to be between ?20,000 and ?30,000 (US$175 and US$260).

It is due to go on sale to the public in the US and Europe early next year.

"This is the Walkman of the 21st century," Ken Kutaragi, Sony Computer Entertainment president and chief executive, said as he introduced the new console in Los Angeles.

"We are targeting worldwide sales of 3 million units by the end of this fiscal year" to March next year, a company spokesman in Tokyo said.

caution

Since Los Angeles, Sony has been cautious about releasing information about the PSP, however, and refused media requests to try it out. The spokesman said Sony had no immediate plans to showcase the product to the Japanese press.

Industry analysts were more skeptical about the new console's appeal as a second Walkman, which was the first of a kind, whereas this time Sony is following a trail blazed by Nintendo.

"I don't think Sony has hard data to back up their sales target of 3 million units," said Takashi Oka, game industry analyst at UFJ Tsubasa Securities.

"There are many portable games available, but Nintendo has stably dominated the market. It would be very difficult to take away a large share in the market," Oka said.

"And there is no guarantee that Sony will really deliver the new product on time" for the year-end holiday shopping season, he added.

Mitsuhiro Osawa, electronics analyst at Mizuho Investors Securities, said it was difficult to imagine the PSP alone would significantly boost Sony's earnings.

"The game industry is very mature. I don't think that one single product will significantly lift Sony's corporate strength and revenue," he added.

But retailers said the product would be a welcome addition to the popular PlayStation family which enabled Sony to take the home-use console market by storm as a new entrant with the launch of the first version in 1994.

A combined 170 million units of all PlayStation versions have been sold worldwide so far, according to Sony.

"The PlayStation series has always sold well. I think the new portable console will also be a hit," said the sales manager at TomoTech electronics store in Akihabara, who identified himself only as Higuchi.

"Generally speaking, new portable products always appeal to consumers wanting to show off new gadgets to friends. I think the PlayStation Portable will give game players another opportunity to do that," he said.

But until the price is announced, software makers cannot decide what resources to commit to the PSP business, said analyst Oka. "Only then we can forecast whether the PSP will have a good range of game titles."
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