Sony Computer Entertainment is poised to announce
deals with software companies and internet service providers to try to
reverse the dismal performance of its PlayStation Portable handheld
games machines.
SCE is expected to reveal
a package of PSP online services in mid-March, with analysts expecting
the tie-ups to involve at least one big ISP, such as Yahoo.
The move is part of efforts by Sony to
shore up its games division, which is suffering worse-than-expected
losses from its PlayStation 3 console.
Nobuyuki Oneda, Sony's chief financial
officer, told the Financial Times that restoring the games division to
break-even was crucial to achieving the promise of Sir Howard Stringer,
chairman, of group margins of 5 per cent by the end of this financial
year.
Analysts expect the PSP business
tie-ups to promote the PSP as a more user-friendly device capable of
downloading films, television shows and back-catalogue PlayStation and
PlayStation 2 games. The changes could allow users to download games
and other content anywhere the PSP can be connected to a WiFi network.
Although the PSP is already technically capable of downloading and
storing online content, such as games, the services have not appealed
to mainstream users. A tie-up with a well-known internet brand or
television company, said one Nomura analyst, could change that.
Mr Oneda acknowledged that the PSP's
recent performance had been a cause for concern, with software sales a
particular disappointment. "It was pretty much a competition issue with
the Nintendo so we have to fight back by introducing more attractive
applications [for the PSP] by using the network," he said.
Mr Oneda's comments come as PSP
shipments have fallen far behind those of the Nintendo DS, which was
launched in December 2004, the same month as the PSP, and has achieved
strong growth among non-traditional gamers. To date, the PSP has
shipped 24m units globally, against worldwide DS sales of 35m.
Sony's new plan is part of its
changing approach to consumer electronics. Mr Oneda said that, in
future, the company would offer "no single product to lead consumer
electronics" but instead would concentrate on developing networked
devices and creating networks in the home. "The trend is towards high
definition and internet connectivity. Those are what we will shoot for
in the future."
Mr Oneda explained the importance of
pulling the games division back into the black. If it could break even
and the film and finance businesses retained their present margins, the
improving conditions of the electronics business and its 70 per cent
contribution to group-wide margin levels would be enough to meet the
March 2008 target of 5 per cent margins, he said.
"I have some confidence we can achieve this," he said.
Leo Lewis
January 31, 2007
Source:
MarketWatch