Sony's ( SNE) new PlayStation Portable is getting a lot of buzz, but that won't necessarily translate into a significant impact on the company's financial results.
Sony won't even launch the device in North America -- the company's most important market after Japan -- until the end of its fiscal year ending in March, at the earliest, meaning that the bulk of sales of the device likely won't show up until next fiscal year. Even then, given the history of Sony's gaming systems, it may be a while before the PSP starts to contribute to the company's bottom line -- and that's assuming that the device is a success, something that at least some analysts are questioning. Nintendo is targeting the same 18-to-34-year-old audience with its new DS handheld that Sony is trying to reach with its PSP, noted Morgan Stanley analyst Masahiro Ono. But Nintendo released its DS earlier than Sony did the PSP, is charging less for it, and has practically owned the handheld gaming sector in recent years. "I worry about Sony's position and the PSP's potential," said Ono. Sony introduced the PSP in Japan last month at a price of less than $200. The device essentially offers the capacity to play PlayStation 2 quality games in a handheld format. But it also plays music and movies, can display digital pictures and has a built-in Wi-Fi radio. Indeed, Sony sees the device as a way to take on not just Nintendo's handheld gaming systems, but Apple's ( AAPL) iPod and other handheld devices. Sony, of course, is a huge company, with the equivalent of $73 billion in sales in its most recent fiscal year. So any one product won't make or break it. But the PSP offers a lot of potential for Sony, beginning with the possibility of jump-starting sales from the company's slowing games division. Sales in yen from the company's games sector were down 22% in the first two quarters of the company's current fiscal year, after falling 19% year over year in the company's fiscal 2003.