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Industry CEOs On PSP's Present And Future

David Smith

Sony and Nintendo's upcoming new handhelds were among the many topics discussed at a roundtable of industry leaders this week, held at the ongoing Piper Jaffray investor conference. CEOs from Electronic Arts, THQ, Take-Two and other companies all offered their opinions on the videogame industry's upcoming transition years, and particularly the kink thrown into that transition by the two handhelds scheduled to debut around the turn of this year.

The most striking comments, however, were offered by Atari CEO Bruno Bonnell, who expressed strong skepticism regarding Sony's plans for the PSP, or rather its lack of publicly-announced plans as yet.

"It's cool," Bonnell said. "But they haven't positioned their system yet...We have no idea if pricing is going to be $350, $250, $500." He went on to list a host of unknown quantities -- the durability of the system, Sony's strategy for exploiting its media-playing capabilities, the potential for wireless connectivity, and so on.

"Having said that, this is the future," Bonnell admitted. Portable games, he said, and particularly the combination of portable games with other media, are going to become significant force in the games industry in the coming years.

Even so, he managed to close with a few more tongue-in-cheek remarks on the nebulous nature of PSP development at present. When asked to estimate development costs for the system, he said "One cent to $50 million." What's that one-cent game? "We could make Pong," quipped Bonnell, "but this is Larry's problem, the $50 million," a joking nod in the direction of Electronic Arts CEO Larry Probst.

Probst himself was a little more even-handed with his guesses. "We're speculating that the $1-2 million range is a good estimate," he said, while acknowledging that critical details like Sony's royalty structure have yet to be nailed down. Surprisingly, he also said that EA doesn't have final PSP development hardware yet.

All in attendance agreed that the PSP will help smooth the coming break between console generations. THQ's Brian Farrell predicted "a sort of rolling transition between the consoles and handhelds," softened by the arrival of the PSP and Nintendo's DS around the turn of this year.

However, Probst cautioned against expecting great things from the new handhelds right out of the gate. "We see this as a late '05 business driver, not an immediate business driver," he said.

As was the case with the PlayStation 2 launch, betting too heavily on the first few months of the PSP's release could backfire for smaller publishers. And as Atari's stance suggests, even the industry's giants may be taking a more conservative approach.

Copyright © 2004 Ziff Davis Media Inc. All Rights Reserved. Originally appearing in 1UP.





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