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Nintendo DS expected to outship Sony PSP by as much as 30% this year

12:05 - Friday 8 September 2006 by THG Reporting Team - source: Tom's Hardware

Scottsdale (AZ) - Sony’s Playstation Portable (PSP) was the best-selling portable game console in 2005, but the Nintendo DS has turned the tables this year : According to market research firm In-Stat, the Nintendo may ship 25 to 30% more devices than Sony.

"Nintendo followed up successful Japanese and North American launches of its DS product in late 2004 with a successful introduction in Europe in the first quarter of 2005," said Brian O’Rourke, In-Stat analyst. "The DS’s two screens have proven popular, and have opened up the handheld market to new types of game play, as well as new demographic groups."

Nintendo has been able to steadily increase sales of the DS system and wrote in its most recent quarter report that it has shipped 16 million units in the 16 months after launch in November 2004. According to industry sources, monthly production levels of the DS hovered around 700,000 in the first half of this year ; in June, Nintendo apparently increased production to 2.2 million units per month, which would be in line with the firm’s recent statement that DS hardware sales were up 300% year-over-year in July.

O’Rourke declined to reveal exact shipment numbers for the DS and the PSP but told TG Daily that it was likely that the DS will outship the PSP by 25 to 30% this year.

Nintendo DS Lite

And if the analyst is right, then Sony could be stuck in a dilemma the company may not be able to fix in the short term : Nintendo was able to use the dual-screen technology in combination with new types of game titles - such as Brain Age - to reach new demographics such as women and 30+ year old customers. "If you combine that with DS’ price you have a fairly attractive package," the analyst said.

Sony recently reduced the price of the PSP from $250 to $200. However, that is still well above the DS’ $130 and can be considered as a simple un-bundling of console and the standard game that was included in the PSP package. O’Rourke believes that Sony may be cutting the price of the PSP as a reaction to the DS’ success later this year. While Sony has not announced such a move yet, O’Rourke believes that the PSP will drop into the range between $150 and $170.

But even a drastic price cut will not allow Sony to change the PSP’s feature set or quickly create a new killer application to boost sales : UMD-based movies have enjoyed early success, but are slowly disappearing from the market. And the PSP lacks true blockbuster game titles such as Nintendo’s Super Mario Bros., which has sold more than one million copies within three months after launch.

At least for now, it appears that Nintendo’s concept to offer a more traditional game console attracts many more buyers than Sony’s idea to offer a portable multimedia device that plays games, but also offers web browsing and an audio player.