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In the second response to a Question Of The Week, a multitude of game professionals tackle the question of whether there really is conflict between Nintendo's DS and Sony's PSP, and if so, which is going to win the battle for market share.

Quang Hong, Blogger

February 18, 2005

23 Min Read

In this week's 'Question Of The Week', we asked our readers, "Is there really a fight for market share between the PSP and DS? (Nintendo has claimed there isn't.) If there is, who's going to win?" With a deluge of responses, we collected the best and the brightest for your perusal. The responses varied from emotional gut reactions to deep, well thought-out analyses, spotlighting the key differences between the two handhelds and their potential piece of the pie.

The Nintendo Camp

The Game Boy and therefore Nintendo has long dominated the hand-held gaming market. Many of our respondents pointed to that, and Nintendo's experience in the face of such fallen challengers as Sega's Game Gear and Atari's Lynx as a key factor in predicting the Big N's continued success in the face of the PSP. Another major point was the innovation of the DS, versus your views of the PSP as nothing more than a portable PS2.

Yes, there is a market fight, but I don't think it's a big deal; I think it'll be the DS hands down: time-to-market, price, compatibility with the flood of existing Advance games, and unique new features well-adapted to gaming.
-John DeWeese, Institute for Creative Technologies

I submit that the DS has a generally better chance than the PSP. For the most part I'd say this is because of the backwards compatibility with the GBA. Also it certainly has more opportunities for original control and gameplay schemes with the dual/touch screen. Though the games supporting that feature have unfortunately been fairly ineffective so far (with the possible exception of Metroid). The PSP's media capabilities will not do much good because all the content would be bound at the hip to the platform. Unless they're darn cheap that wouldn't be much of a motivating reason. In the end it's all about execution though.

While definitely positioned differently, they of course compete on three fronts: Perception of tech leadership (important for press, users), consumer mind/wallet-share, and publisher/developer mindshare (arguably driven by the consumers).

Claiming to not be in competition is of course the favorite tactic of anyone that thinks they aren't going to win. (i.e. "That's OK, I didn't want my lunch money anyway").

Of course, assuming that better technology wins is a very big assumption. The Game Gear was miles ahead of Game Boy... but lost. Several platforms were better than the PSone… but lost.

The key to Nintendo's chances will be in their ability to produce/procure compelling games to match the innovative platform they've put together.
-Kim Pallister, Intel

Nintendo will win the war... only for the fact it has a larger gaming library right now that Sony will not catch up to within the next three years. Sure the PSP will probably be better but if we look at history the Game Gear,and Turbo Express were better… but then again they no longer exist.
-Jehu Brown, Kinetic Synergy Inc.

That's easy - they are not mutually exclusive. Nintendo will win. The market the PSP is aimed does not have time to sit around playing portable PlayStation games. People may buy the PSP as a novelty, but you will find most of them will not buy many games for it.

Nintendo has a proven winner on their hands - they know the market, they know what it takes to sell (158 million Game Boys sold).

Sony has made a huge mistake here.
-Anthony Bull, Black Coffee Software

Of course, gamers see both systems as viable options. The DS will, however, attract more non-gamers, though they will be interested in less traditional games. The DS' tie-in ratio will suffer as a result.

The DS will still win. By the time the PSP is launched in all regions (sometime around June) the DS will have been selling for a while and will have no manufacturing constraints. Because of the DS' unique nature its major third party games will not be ported to the PSP. The PSP will survive as a media player but will have less third party support. Its first party titles will be unable to match Nintendo's. Because of its reliance as a media player, it will also experience a low tie-in ratio.
- Anonymous

Nintendo DS, simply because Nintendo is known for their handheld successes - and that's what all the kids want, a Nintendo. Comparatively, no-one has heard of the PSP, even though it is a far superior machine in my humble opinion.
- Anonymous

I say not. Nintendo always had and always will have the portable gaming market. They've just got more experience at it. Although it is nice to have diversity in a market, I think Sony's attempt at the portable gaming market is futile.
-Darren Schnare

I agree with Nintendo. There isn't really a fight for market share. The two systems offer completely different gaming experiences. But if there is stiff competition between the two systems, I do believe DS will last longer on the market than PSP the same way the "black and white" Game Boy lasted longer than Sega's Game Gear. When the next generation systems are released, the PSP will become obsolete, while Nintendo's Revolution will most likely make use of the DS.

A market? That is a tough one. GBA already has the market well saturated as it is. PSP will perhaps be able to lure more of the mature players towards portable gaming, like Sony did back in the day of launching the first Playstation.

So it's going to get ugly. My money is on Nintendo DS. They deserve to win for their bold move of a whole new way of playing, where Sony just does the more-of-the-same strategy. In the end the games will determine it. Both platforms still haven't got any super killer apps launched yet...
-Marque Pierre Sondergaard, Powerhouse

I don't think there is a fight. Nintendo seems to be excelling in hand-held systems and Sony is going against the best. I think Nintendo will win.
-Eric Fuerst

They are two very different devices. Nintendo is all about gameplay. PSP costs $100 more and will come with the movie - not the game - of Spider-Man 2. We like the DS a lot more and are developing games for it.
-Ed Magnin, Magnin & Associates

Innovation has and is seemingly the driving force behind the individuals of any company, especially those of such prestigious ones as these. Individual employees seek for gratification on a scale different than that of the grandiose company they may work for. If Nintendo says they aren't vying for market share, then no, I don't believe it. If Shigeru Miyamoto came up to me and told me they weren't fighting, then yes I'd believe him, but never the company itself. Competition is always good for business, and in a world where Nintendo has been leading the hand-held industry; it could improve, given some rivals. So in that respect - no, I suppose Nintendo isn't really fighting for market share, they'll just sit back and wait for the consumers to see the difference themselves, over a decade of handheld expertise. With a reputation like that, who needs to fight?
-Joseph Carr, Transplace

Predicting PSP

The opposing view is that the more technologically advanced and graphically superior PSP will win the day. Among other reasons cited were the DS as being too gimmicky, the PSP's fairly low price point, and the PSP being positioned as a lifestyle device along the lines of Apple's iPod with multiple applications.

The PSP will win, the DS is too much of a mystery, Nintendo will have to come with something good to beat Sony.
-Jamar Waterman, Renaissance Systems

I would have go with PSP on top. There are three factors I see playing a crucial role in the battle for the handheld market:

1. Available content from successful franchises and third parties. True, a lot of the same developers are working in the DS space, but not to the level that they are for PSP. PlayStation-only franchises such as Devil May Cry, GTA, and others really make the PSP a must have in the market. True, hot titles like Metroid, Zelda and the other big N franchises are going to be on DS, but it's less likely that they can secure exclusivity from third parties in the same waters as Sony (the king of third-party exclusives.)
2. Marketing. Sony isn't just making a handheld gaming platform; it's making a lifestyle device, much like the iPod. It plays games, music, and movies and has web apps already on the horizon. All of this, coupled with the expandable SanDisk memory, really make it a forward-thinking gizmo. This will be something that people "must have." Much like the PS2, but even more so, PSP will be viewed as an icon. That's something that Nintendo really hasn't focused on. In fact, the company hasn't really focused on marketing much at all. With word in the press that the DS isn't really a successor to the GBA, its place in the market is even murkier.
3. Built-in audience. While I'm sure there are few that would argue that the loyalty of Nintendo users is matched only by that Mac evangelistas. Sony has a much larger share of the market - many of these uses have been clamoring for a portable from Sony for years. And now they're finally getting what they've wanted for so long.
-Orme Dominique

I see Sony taking a majority of the handheld market in the next 3 years.

More significantly, the PSP's use of Wi-Fi to stream television, movies and music will grow with the install base of home wireless networks.
- Anonymous

I think there will be [a fight], especially for parents buying for children. I can't see a lot of kids owning both. I believe that Sony will eventually come out on top with the PSP. I believe that the handhelds are even going to cut into the console market.
-Jim Busike, Killergame

Nintendo know they wouldn't win a direct fight for the hardcore audience, so they are focusing on fringe appeal and Nintendo-philes to carry the DS. Prediction: When the PSP comes out it will do very well, and outstrip the sales of the DS very quickly. Justification: GTA on the PSP and the big screen.

Of course, there is competition, but Nintendo has decided it wants to mitigate it. I believe it when Nintendo says it genuinely wants to grow the overall games market. I just don't think the DS will do this as well as it hopes.

Yes, I believe there is a shared market between any handheld game platforms. I think PSP will definitely win the largest portion of market share, given the announced pricing.
- Anonymous

There IS a fight for market share. The DS has its pluses, but the PSP looks like it could become a phenomenon. I have both, but I don't want to carry both around. The PSP is a much sexier, more powerful and more versatile handheld, and therefore the DS stays at home.

If the PSP had been more expensive, then I think the markets would have been more polarized. At the current price I think it puts incredible pressure on the DS, even though they are both selling well.

I am developing for the PSP only, so this may all seem somewhat biased. I've always been a big fan of Nintendo, but I can't help feeling that the DS seems somewhat dated, and the PSP feels like the future.
-Bob Stevenson, Planet Moon Studios

There will be no fight. The PSP has already won the focus - and dollars - of publishers. In that sense, the race was over before it even began. The DS will always be a niche machine for however long its lifespan ends up being. And that's a real shame, as it has so much potential for unique and fun gameplay. But no one is investing any time/money/creativity in their DS lineup, so the potential will never be realized. There will be more games for the PSP U.S. launch that the DS will probably get all year.

I think there is a fight for market share - they are similar devices at a similar price-point. Contrary to popular opinion, I feel Sony is skewing more towards casual consumers (who might use it as an mp3 player, and who care about a portable GTA, Madden, Game Sequel #47, etc), whereas Nintendo is shooting for hard-core gamers (who care about unique gameplay). But I think most people would choose one or the other, and Sony has already won the battle.
- Anonymous

The markets for the DS and the PSP will certainly overlap, so it seems that it is really a question of where, and how much. To me, it is apparent that the appeal of the PSP reaches all gamers, casual and hardcore. Since the price point for the PSP is expected to be higher than that of the DS, what I think we'll see is that more casual gamers will gravitate towards the DS, as well as children who's parents might shy away from the idea of giving them a more expensive handheld, for example. Anyone serious about games with the means, however, will certainly pick up a PSP. Inevitable price drops for the PSP could very well spell hard times for Nintendo's little giant. What we should see once Sony's handheld is released to local markets may ultimately prove to be very similar to how Sony and Nintendo relate in the home console arena. Also, everyone wants great graphics, young, old, rich, and poor. When you compare the DS to the PSP, the difference in technical capabilities is greater than that of the handhelds' respective home units. For those who own a DS, once their touch screens become worn out and scratched from use with the stylus, the gimmick of a spare screen may wear just a bit. Simply put, the PSP appeals to all gamers, so what market share in the gaming world does Nintendo's system aim for that Sony's does not?
-Demitrius Pennebaker

Until Nintendo releases a game that is both fun and takes full advantage of the capabilities of their handheld, the PSP will blow them out of the water. The reason that people tout the DS is the features that so far have not been exploited fully. Look at the sheer number of launch titles in comparison. The only DS game I'm looking forward to is Advance Wars DS, and that's not coming out until the end of the summer. I'd say the only advantage Nintendo has is the price. But really, once you're going to shell out $199 for a handheld gaming device, why wouldn't you pay an additional $50 to buy a handheld that will have more games?
- Anonymous

I believe there is a substantial market share to be won by Sony if the PSP can prove to appeal to the younger audience that Nintendo has already captured in the past through the Game Boy Advance and now Nintendo DS. The true test is if the Nintendo DS can sell to the 18-34 male demographic which makes up the largest consumer percentage in the video game industry. In the past, Nintendo has dominated the market by being the only viable choice in the handheld market and targeting the younger audiences with games like Pokemon and Mario titles to push hardware sales. Currently, I think the quality of graphics is the main attribute that consumers look for in a video game system, both console and handheld. With a mix of quality titles offered by the PSP at launch and the overall graphical and technical prowess of this sleek system you will see a sharp increase of defectors choosing the PSP over Nintendo DS. Furthermore, the lack of titles available for the Nintendo DS since launch will have a significant impact on hardware sales. Therefore, I think Sony has made a wise decision to enter the handheld market with a next generation system like the PSP, and they will eventually be the leaders in the handheld market.
-Javier Laracuente, Bloomberg L.P.

Yes there is. I know quite a few people who are interested in the PSP and I'm the only one I know who has a DS. I think the PSP will "win" because people still associate Nintendo with kids' games and that they usually have less games then the other systems.

Of course, no one will win, because both companies will come out with new systems before one of them goes bankrupt. One will just have more market share then the other.
-Neil Marshall

This is likely to be a repeat of Gamecube vs. PS2, with the same results. As long as the price of the DS is substantially below the price of the PSP, Nintendo will sell units.
-John Bolton, Page 44 Studios

I believe that both the PSP and DS are ultimately in the same market. Even though the PSP is being marketed as more of an entertainment center than a games console, its biggest usage will be gaming.

I also believe that the DS will outsell the PSP at first, because of its cheaper price tag and earlier release date, but soon after, people will get tired of its weak performance and graphics, and there will be a general preference for the PSP.
- Mahmoud Swehli, swehli.com

It Could Go Either Way

Other respondents replied that while there would be a fight for market share, there are just too many factors that could sway the battle either way. Some are just looking forward to a good fight.

To put it simply, I think that yes there is. The PSP and the DS each appeal to different demographics but there is a fair amount of overlap in their target markets. You also have to remember that they are fighting for developer support as well; if the PSP has a larger installed base then the DS, it'll be more appealing a market to develop for. But the DS also seems like it's the more interesting system to design for (I have lots of neat ideas I'd love to try out on it myself) and also seems to be attracting non-gamers.

If Nintendo doesn't take the PSP seriously, they are likely to find one of its chief pillars taken away from it. I look forward to a good fight between these two companies.
-Matthew Freedman, EA Canada

Nintendo tends to be innovative, but is very controlling and its bottom line hampers its innovations. It tends to stop making certain products for use with its products (i.e. the broadband online adapter, e-Reader, etc.) leaving a lot of customers in a lurch, Sony does that as well but less so.

Currently Nintendo has a couple of big advantages right now: price (Sony has some question marks when it comes to gaming hardware reliability at the beginning of sales) and reliability (through reputation and history) compared to Sony. It should press the advantage as quickly as possible by providing more and better games from the onset than Sony. If that happens, I can see a possible win by Nintendo.
-Paul To

It seems to me that in spite of what Nintendo says, there is an overlap in the target audiences for the DS and PSP. Nintendo should still carry with younger gamers, but they are going to have a fight with Sony over the late teens thru adult segment of the market (which the PSP is geared toward). Ultimately, I think the quality of content on the 2 platforms will be a deciding factor on who "wins", assuming there is a clear winner. The PSP looks just cool enough that Sony could succeed in expanding the handheld market for all.
- Anonymous

Given the way that the Xbox has taken on the Playstation in recent years, it's possible that the PSP could challenge the DS in the same way. That said, the DS is a pretty awesome little device, and developers have shown some great innovation with the launch titles that I've seen. So, by virtue of those two conflicting points of view, I would say that yes, there is a fight for market share between the PSP and DS.
-Coray Seifert, Large Animal Games

I think that there will certainly be people who will compare the two systems and choose to buy either a PSP or DS - and the result of that choice (on a market scale) will help determine which company sells the higher number of units overall (i.e. the market share). However, I think the introduction of both of these units will help grow the overall market, with the net effect of helping both companies sell more units overall (in comparison to the number they would have sold if the other company had never introduced its respective handheld gaming system.)
- Anonymous

Of course there is - people on the whole won't buy both a PSP and a DS, but there is an argument to say there is less crossover of that market share than some might think. Curiously I don't think that either side will claim a significant win - though the PSP will sell well, it's only replicating (effectively) existing PS2's capabilities. The DS is innovative, but will depend on the games developing and aiming slightly at a slightly older audience than right now - plus they've got a sales head start.

Conclusion: The handheld games market is big enough for both - a draw.
-Phil Elliott, BBC Radio Five Live

Nintendo has dominated the handheld market for years. There has never even been a real contender to put up a fight until the PSP. It comes down to a simple fact, if the PSP takes away some of Nintendo's market share, then they are competing. I think that the PSP will eat away a bit of the handheld market from Nintendo. Competition is a good thing - it will force Nintendo to put out a better product and make significant advancements in the handheld arena in order to compete with future versions of PSP.
-Kirk Baum, Incognito Studio

There will definitely be a fight for market share. Regardless of what demographic each company is going for, the fact remains that they are in the same market: hand-held gaming. It would be asinine to put each handheld in its own category because one has a touch screen, and the other plays movies. A hand-held gaming system is a hand-held gaming system - each with its own independent strengths and weaknesses.

Mobile gamers aren't necessarily looking for an immense catalog of games, but rather are looking for something to hold their attention, and entertain them on car trips, between classes, or in transit to school or work. I don't feel third party support will be as key as many expect it to be, but rather, the victor in this slug-fest will be determined by delivering the most well-rounded and solid selection of games, in the shortest period of time.
-David Hinderer, Protis Executive Innovations

Sure they are [competitive]. I am deciding which one I will buy right now.
-Tuang Dheandhanoo, Black Hammer Games

It's a Non-Issue

Finally, some thought that the fight for market share is a non-issue, as the two devices are disimilar and occupy different parts of the market with little or no overlap. Some see the PSP as a multimedia portable aimed at capturing an older audience, and the DS as a creative new innovation catering to a younger and more casual market. With the diverse array of responses we received, it's hard to see any clear-cut consensus among our respondents. Thank you for all your responses.

No, there isn't really [competition]. Nintendo is aiming to please portable gamers who have, for the most part, been playing Game Boys for the past fifteen years. Sony, on the other hand, is trying to turn their mainstream console fans into portable gamers by offering a multimedia device that is every bit as sleek as high end cell phones. Is there some overlap? Of course there is. Who wins there? I'd say Nintendo, because of an already established, loyal fanbase and backwards compatibility as well as excellent third party support and the kind of first party development Sony has always aspired to. Still, the two portables are too different from each other to really compete directly.
-La Mar Williams II

No, they point at completely different target users. DS is much more oriented to the casual/social gamer, where PSP is looking straight into the eyes of the hardcore players.
- Anonymous

I don't see any competition. They are obviously aimed at very different markets. The price difference is substantial, and the multi-function nature of the PSP skews it towards an older market. Anybody that likes games and can afford both will just get both anyway.
- Anonymous

I think Nintendo is right - the two handhelds really don't have that much in common, and this will be borne out by the software released for each. The DS will be the home for quirky touch-screen games and N64 ports, and the PSP will feature more of the same stuff that we've seen on PS2, except playing it even safer because of the small installed base.
- Anonymous

Nintendo's claim is that they are for different markets. PSP seems to be the device for the older market, the one that the Nokia N-Gage spectacularly failed to capture. I think there's room for both. The DS wins on innovation though. I expect to see more original games on the DS than the PSP. The PSP is the perfect device for ports of all the classic PS/PS2 games. Who's willing to buy them twice? A few, but there's a smaller market than for original games, or at least games rewritten to make the most of the new device (see Mario DS for example)
-Craig Nicol, University of Glasgow

I don't think there is one. The DS seems to be more for a younger audience than the PSP.
- Anonymous


[Article illustration by Arjan Westerdiep @ drububu.com]

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Quang Hong


Quang Hong is the Features Editor of Gamasutra.com.

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