Double-Facing Kotaku On The PSP

I’m going to both agree and disagree with Kotaku (or more specifically, with Mark Wilson) simultaneously.  Jason Chen of Gizmodo wrote a column entitled “Why the PSP Might Overtake the DS.”  It was, as Wilson points out, an interesting variation of Xeno’s Paradox - well-reasoned, articulate, and deeply flawed.  I’ll provide an overview of the article, then discuss why the entire conversation is off-base.

Chen’s post contains 8 pieces of evidence for the PSP’s ultimate domination.  I’ll let you read them in detail or yourself, but they all fall into one of three categories:

• Sales momentum: The PSP has sold 1M units in Japan in two months, sales for the PSP are up while the DS’s are down, and the PSP has sold as many units as the PS2.
• Product quality: The PSP has more highly-rated games, as well as more add-ons and media interactivity.

The problem here is two-fold.  As Kotaku points out, the first bullet point is effectively a logical fallacy: an extrapolation error that assumes that because the PSP is doing well right now, that trend will continue indefinitely into the future.  Needless to say, that’s a bit silly: much like Xeno’s arrow, the issue isn’t how the PSP is doing in percentage terms - it’s the absolute that matters.  And considering the fact that the DS has lifetime sales of some 53M units, while the PSP is currently under 15M, you don’t need to be a genius to work out that even if the PSP could double its sales every year it probably wouldn’t catch up before the next hardware iteration. 

The second is another fallacy, but a more troubling one: it assumes that the best technology wins.  As the proud owner of a Sega Dreamcast, I can tell you that this isn’t the case - and Sony could tell you a bit about the Betamax/VHS or Minidisc debate itself.  Even assuming that the quality argument is correct (I suspect a lot of Nintendo DS owners would beg to differ), that has little bearing on which console is likely to “win” in the long term.  Plus, some of those quality arguments are suspect on their face: the PS3’s troubles have shown that simply being a media powerhouse isn’t enough to merit victory.

Yet I’m going to turn on Wilson and Chen both here to say that I don’t think this is a conversation worth having.  Given that it’s a little ridiculous to think that the PSP is really going to come from behind to crush the DS, a better question is, “Does it have to?”  I think the answer to that is a resounding “no.”

The handheld market has essentially been a money-maker for Nintendo since the Gameboy.  It’s been a monopolist in this sub-market for years, and it’s a testament to Sony’s brand that it’s been able to get a new product out there to begin with.  But more importantly, I don’t think Sony either needs or expects the PSP to dominate the market now.  All it needs to do is be a successful second-place entrant to make plenty of money, and even position itself for longer-term success in the upcoming generations.  The market for consoles is somewhat different: if you have three companies producing similar products, it’s almost a given that at least one of the firms is going to lose money.  (That’s the theory behind the Wii’s differentiation.)  But the handheld market is young and devoid of competition - it can easily support 2 successful companies, especially given their different orientations and target markets.

I become a little concerned by debates like this because they encourage fanboys to back their champions.  But winner-takes-all isn’t every game out there.