The Great Experiment

In a week full of startling gaming news, from Microsoft's virtual controller to Nintendo's biometric add-on, Sony's launch of a digital-download only gaming system has the greatest potential to be a game changer for the industry.

The PSPgo is a slimmed down version of Sony's Playstation Portable. The device, set to hit stores on Oct. 1 for $US249 in either black or white, slides apart to display its controls and features 16GB of internal memory. But most importantly, it lacks any sort of drive to load or play games on. The original PSP uses small UMD discs to load games. The PSPgo will get all of its content digitally, via downloads.

This download-only approach to a gaming device will be the first time a major gaming hardware company has jumped entirely into the realm of digital downloads and could have serious implications for many facets of the industry including the reselling of used games, game publishers' reliance on retailer shelf space and piracy.

John Koller, director of hardware marketing for Sony Computer Entertainment of America, said Sony's decision to launch the PSPgo was driven by consumers' increased interest in digital content, like music, TV shows, movies and even games.

"It became very apparent over the past 18 months that the portable gaming consumer wanted larger, richer, deeper content available digitally" Koller said. "The PSPgo is the first and only handheld device to offer these larger, richer digital gaming experiences, and from our discussions with consumers, publishers and retailers, this was absolutely the right move to make at the exactly correct time.

"The launch serves as a lesson to the industry of the strength of digital distribution. PSPgo will address this market and help drive this trend forward."

Billy Pidgeon, an analyst with Game Changer Research, says the move is huge for both Sony and the industry, making publishers less dependent on retailer shelf space and helping to cut down on the growing secondary market of used game sales, something publishers don't earn any money from.

"Using a digital download only business model brings Sony in direct competition with Apple, and the Playstation Network is already in competition with Microsoft's Xbox LIVE marketplace," Pidgeon said. "The PSPgo's download only design will help SCE transition its customers and its media delivery to online distribution. This will make Sony appear more cutting edge and will pave the way for future devices that are supplied by digital distribution."

While the PSPgo and its download approach to gaming may be the future, that doesn't mean the device doesn't have some significant hurdles to overcome.

Koller says the biggest challenge will be ensuring that there is enough content by the time the system launches to make it an attractive system for gamers.

"The old saying that content is king is even more true with the PSPgo launch, and we'll be meeting that challenge through the digital launch of virtually every title launching on UMD from now on, as well as converting over 300 catalog UMD titles to digital for the PSPgo launch," Koller said. " It is important to note though that we will not be walking away from the UMD business – in fact, we view the UMD as critical to the platform's long-term success as there are still many consumers who prefer physical goods."

Sony is also looking into a program to allow existing PSP owners to convert some of the UMD games they already own to digital versions playable on the PSPgo, though Koller declined to say how many games will be convertible.

Pidgeon thinks the biggest challenge will be convincing retailers to sell the device in their stores because traditionally retailers make much more money from the sale of software than they do the sale of the hardware that plays it.

"Retailers stand to lose big if consumers buy handhelds and consoles but not software for those devices, and the secondary resale market goes away," he said. "So it is going to be difficult to keep retailers as partners for hardware distribution if you cut them out on software."

One middle ground, Pidgeon points out, is selling voucher codes for digital games in stores.

Koller says that Sony has already been in talks with retailers and that their reaction to the PSPgo has been "overwhelmingly positive."

"With the dawn of the digital gaming age, particularly with the launch of the first full game digital platform in the PSPgo, retailers are becoming very creative in how they work to become a part of digital networks and sales," he said. "And we've become creative in how we have crafted a new business model to meet how and what retailers sell."

And Pidgeon thinks this is just the first step for Sony and its new PSPgo. He believes that the PSPgo will do quite well at retail, triggering a price drop to $US200 as the company ramps up production. And while Sony says they will continue to sell the original PSP, Pidgeon thinks the PSPgo will slowly replace it and that there is even a successor to the PSPgo on the horizon, one that will include a touch screen and an integrated phone.

"The PSPgo will be a good way to bridge to a next generation download only device," he said.

And could this lead to download only consoles?

Pidgeon thinks that home bandwidth limitations mean the next generation of consoles will still be disc-based, but that online deliver will become much more important down the line.

When asked if there was a download-only PS3 in our future, Koller remained tight lipped.

"Our consumer research shows that many people still continue to prefer purchasing games on tangible disc-based media, and we'll continue to serve this segment of the market, while also providing digital content to the growing segment demanding this format," he said. "We have nothing further to announce/discuss at this time."

Well Played is a weekly opinion column about the big news of the week in the gaming industry and its bigger impact on things to come. Feel free to join in the discussion.


    As a collector of games and systems etc., I =REALLY= hate the idea of a digital download only platform.

    I want, for my money, to be able to hold tangible in my hands the fruits of what i have paid.
    What happens when/if i have this handheld, and something happens to it an the HDD inside becomes useless (ie. water damage etc.) and then i loose all the games i have downloaded and paid for? OR if there is the protection of reserving those games after purchase on my account, the trouble of downloading the game and subsequent updates all over again.

    Mainly, as i said though, i LIKE having DVD cases containing all my favorite games neatly stacked on my shelf - i look at them and feel a sense of accomplishment and pride in my gaming collection..

    This whole idea just leaves me cold inside.. am i the only one?

      True, you won't have a tangible product when you buy online. And this was something I was kind of nervous about at first.

      The same discussion was first brought up when 'Steam' launched years ago, but it is now the ONLY way I get new games for my PC. It's fantastic!

      It's a whole different approach to how you manage you games, instead of buying a 'copy' of the game, you buy the rights to play that game. In terms of Steam, this means I can log on to anyone's computer, anywhere in the world, and play the games I own. I don't need to bring the game with me. Of course the game would need to be downloaded on each computer I want to play it on, but you can save yourself some hassle and keep a copy game (steamapps folder) and then you only need to have downloaded it once.

      No more scratched/lost discs, no more swapping discs to change game (or even just music, in the case of Singstar).

      Give it a go, you won't regret it. :-)

        Scott, i get your point, and i have no problem with digital distribution as such, even less son on PC. Steam is a GREAT app, same with X-box live and even the Wii Shop.
        My problem isn't with digital distribution, but with having a handheld dedicated to JUST that.

        And yes David, we are aware we can still use the original psp and we will still have UMD games, but it would be nice to also have a newer system like the PSP go.

        I may sound nitpicky - But as one of the few (exaggeration) people in this country that openly support the PSP since it was launched, i feel like i'm kind of getting shafted by this new version...

      True, I mean some countries have bad internet speed or no internet at all. So going digital will present problems. especially since the PSN only allows for 5 Re-downloads after the initial download.

    100% download does bring extra issues vs traditional physical games, namely DRM and hard drive space.

    DRM becomes an issue when you want to share a fun game with others (who may then potentially buy it) and also backup issues (see HDD)

    HDD - will become an issue for heavy users who will fill up the drive. And then what?
    Replace the drive? - no
    Backup to computer? - Probably not (DRM)
    Delete and redownload every time? - probably

    Computers have shown the ability for hard drive space to balloon and fill up drives that we thought of in the past as way more than we needed.


    No you're not the only one. Dozens of forums have reflected similar feelings.
    I personally don't mind Sony expanding it's digital download service, but making it EXCLUSIVELY downloadable content is leaving many consumers myself included, out in cold

      Anyone concerned about the loss of physical media, here's a simple solution: don't buy the PSPgo.

      Keep your existing PSP. It still works. Games will still be released on UMD. You'll still be able to play your old UMD games.

      Sure, it doesn't have the same internal storage as the PSPgo, but there's nothing to stop you downloading games to your old PSP if you one day choose to embrace digital delivery.

    Yes, but I still want all the other features of the PSPgo. Newish interface, 16gb memory, lighter, greater screen contrast. Now because of my preference for tangible media I'll have to do without.
    I don't have a problem with Sony trying to innovate believe me. I just think annoying long term consumers like myself (and I have a right to be annoyed) and many, many others is a dick move.

    I think PSP is a good thing. The whole "I want a physical copy" problem has some validity - but the PSP is meant to be portable. I know I'd much prefer to have my portable games stored on internal memory rather than having to carry the UMDs around - especially when using memory instead of a UMD drive means faster loading times and less power consumption. This is different to having a home console like the PS3, where choosing between carrying around the physical copies or having them on a HDD is a non-issue (also, PSP games will be smaller than any home console game, thus quicker to download and easier on download caps).

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