Is PSP Demand Flagging?

Report out of Japan says Sony has lowered its production targets for the year. The question is why?

Is demand for Sony's PSP slowing down, or is the company simply suffering with shortages of certain crucial in-house parts?

These are the questions on people's minds after a report was released by Nikkei BP suggesting that Sony has cut PSP production estimates for the year by a third.

Sony originally intended to ship 18 million PSPs in this financial year, according to the report, but this was downscaled to 12 million - the figure Sony quoted in its own outlook for the year ending March 2006.

Nikkei BP speculates that Sony could be making fewer PSPs than it originally planned because of a shortage of chips the company makes at its own foundries, but there is talk among insiders that it's due to lower-than-expected demand for the handheld.

This would not, however, explain why Europe is still waiting for PSP production to ramp up so that there are enough of them to release the handheld here.

That's not to say that things are looking grim for PSP.

Howard Stringer, the Welshman recently inaugurated as CEO of Sony, has said that one of his main goals is to reinvigorate the company's electronics business. Stringer also commented that he sees the PSP becoming a main tool for watching movies.

Stringer might have more than just a hunch driving his optimism. A recent USA Today report said that some movies have already sold more than 100,000 copies on UMD.

Alex Wollenschlaeger
Editor, Kikizo Games