On the PSP's profitability - even if the hardware is selling at a profit now, it's harder to tell if the PSP has been or will be a profitable venture for Sony overall. I guess we never get a sense of how Sony systems break down by revenue and profit in their financial reports; PS2 has obviously been a major cash cow for the past few years (but even it had to have major profits for a few years to make back the losses for its first few); the PS3 not so much. I'm guessing the PSP was sold at a loss for its first year or two and there were probably major R&D costs involved.
Even if Sony's happy with current hardware sales (and they should be), they can't let the software situation remain the same for the next few years if they want to make their money back - I thought the PSP was a traditional "razor & blades" product where software licensing revenue is depended upon to make up for earlier hardware losses and costs. Unless Sony's making extreme profits on each hardware unit sold, they won't make back their initial costs unless software sales pick up (or hardware costs go down and they somehow keep the price the same, which I doubt they can do).
Of course, maybe like the XBox the PSP is meant to introduce Sony to the market and set the stage for PSP2 - but it's hard to imagine what the PSP2 would look like. Stronger firmware protections, almost certainly. But would it have as many multimedia capabilities as the PSP, if one of the perceived "weaknesses" of the PSP is that people buy it as a multimedia device rather than a gaming machine? At the same time I can't imagine them releasing a successor with less functionality than the original...who knows.
Even if Sony's happy with current hardware sales (and they should be), they can't let the software situation remain the same for the next few years if they want to make their money back - I thought the PSP was a traditional "razor & blades" product where software licensing revenue is depended upon to make up for earlier hardware losses and costs. Unless Sony's making extreme profits on each hardware unit sold, they won't make back their initial costs unless software sales pick up (or hardware costs go down and they somehow keep the price the same, which I doubt they can do).
Of course, maybe like the XBox the PSP is meant to introduce Sony to the market and set the stage for PSP2 - but it's hard to imagine what the PSP2 would look like. Stronger firmware protections, almost certainly. But would it have as many multimedia capabilities as the PSP, if one of the perceived "weaknesses" of the PSP is that people buy it as a multimedia device rather than a gaming machine? At the same time I can't imagine them releasing a successor with less functionality than the original...who knows.
