The elephant in the room, though, is the retail price. Sony won't say what the NGP will cost, and the cost could be so high it could strangle sales for a long time. (Remember the PS3 at $699? Ouch.)
I remember the PSP introduction, and it seemed like an amazing piece of hardware... but it was expensive. And the capabilities were never realized for a long time; not enough cool games, awkward attempts at movie sales, no online store for music, movies, etc. The device did quite well in Japan, but never was a big hit in the USA. The DS juggernaut squashed the PSP, and price was an important reason. Another was the DS's array of interesting and useful capabilities, like the dual screen, the touchscreen, the microphone, and so on. Game designers got creative, and there were many interesting games. The PSP never had enough games... although that's been changing, but it was too little, too late.
Enter the second big Sony announcement, which in some ways may be more significant than the NGP: The Playstation Suite. Or as I like to think of it, Sony's Playstation Android Terminator, a heavily armed, unstoppable device designed to seek out and terminate its target: The 3DS.
Wait, what is this Playstation Suite? It's a software development toolkit and specifications for putting PS One games on Android phones. There are many details left to fill in, but it looks like any phone that runs Android 2.3 will be able to handle PS One games (assuming the hardware is beefy enough... which most any new Android phone is). Sony will be selling PS One games on Android phones, raking in revenue for games that they wrote off all costs for many years ago. Better still, they'll be getting people interested in Sony games, perhaps looking for sequels on the PS3 or the NGP. I'm sure Sony is exploring the possibility of making the same thing available on the iPhone or the iPad. And I'm sure the Playstation Suite will be working just fine on Google TV, which (no coincidence) is built into some new Sony TVs.
It's a brilliant strategy, one that Nintendo would do well to emulate... but probably never will. They're apparently going to stick with their business model, regardless of how the world might have changed.
Sony, at least, seems well aware of the changes in the marketplace. Sony's not dismissive of smartphones and the impact they've had on mobile gaming; Sony is actively looking to harness that power to their own ends. Nintendo prefers to pretend that smartphones have absolutely no effect on Nintendo's sales.
Sony's executives clearly know the market and what it will take to succeed. They've put together a handheld gaming device with a quad-core processor, a 5" OLED touchscreen, dual analog joysticks, a backside touch panel and a full array of sensors and networking capability. This puppy makes the 3DS look like a DSi with a 3D screen gimmick tacked on and a bit faster processor, which is about what it is.
What does Sony have to do to win?
Three words: Price, Price, Price. Those are the three most important things. The sheer size of the feature set makes you wonder just how much Sony will sell it for. I could easily see a $499 price point, if not more, if you needed to make a profit on every sale. If they price the NGP there, it's pretty much going to be a lovely thing you'll never see in the wild. At $249 they would stomp the 3DS flat. So how much can Sony afford to lose on each unit? That's an unknown. I'm sure they'll hold off on pricing as long as possible, waiting to see what the component prices will be when they actually go into production... and what the game lineup looks like, and how much they can expect to make from it. If the NGP is over $299 it's going to be tougher to get good sales momentum.
Unleash The Media. No, not the Kraken... though maybe that would help, if it could take on some recalcitrant executives within Sony. This device should do what the PSP should have done: have a full array of movies and music available to play on it. (See iTunes for hints on how to do this.) Sony owns a ton of media; if they can just boot a few executives out on their ass in those divisions, maybe they can get some cooperation. Digital distribution is the future of media. The NGP should have books, music, movies, TV, and the Internet...sell them all and you will make a mint, Sony. Don't worry about cannibalizing your other devices; better you than some other company. Like Apple. Duh.
The NGP Needs Apps. Not just games, Sony. The NGP should be able to handle just about every App in the App Store or the Android Market. Make it so. Open the doors to developers, make it easy to get an App in your store. The NGP needs a full range of capabilities to compete with smartphones. You don't have to build them; just give developers the invite and then stay out of the way to avoid getting trampled.
Embrace new revenue models. In-app purchasing, baby. Freemium. Include some free games with the NGP that have a freemium model, and watch the dollars roll in.
Skype. You don't need a phone carrier. Just a killer Skype implementation. There will be a 3G version of the NGP; with that and Skype you can compete with a smartphone very nicely, thank you very much.
DLC. Sell the add-ons to games, new and old. Extend each game in every way you can, and let the fans pay for what they want. Sure, give out free stuff to chum the waters; you'll get plenty of bites on the pay stuff.
Connect to the PS3. Use the Playstation Network. Make sure every NGP owner wants to become a PS3 owner, if they're not already. Have some games use an NGP as a cool add-on (hidden information).
Sony, you have shown hardware that can take the handheld gaming crown away from Nintendo, and defend it against the smartphones. Now it's all about the execution... so do it right.
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