PSP a drain on Sony

News - Handheld will not be profitable straight away

Like Nintendo's tricky-to-manufacture and sell and sell DS handheld, so Sony's ambitious PSP - which has driven up handheld gaming benchmarks massively before even going on sale - is expected to hit Sony's profitability as the firm counts costs upon the new console's debut. Early-stage development and component manufacturing expenses are to blame, and will result in no profits from the device in its early life-cycle. Countering this however, Sony does expect the PSP to enjoy an impressive ten year lifespan, which will no doubt see the system driven well into profit if Sony's calculations and estimates prove correct.

"If you're saying 'Day one. Are you going to be profitable on the hardware?' then probably not," US CE at Sony Computer Entertainment Kaz Hirai conceded during an E3 interview. "Hopefully, this will have a 10-year life cycle, at which point I'll look back and say 'Yes, definitely profitable.'"

The financial hit both Nintendo and Sony are prepared to take initially on their respective devices demonstrates amply the importance of the market they will be competing in to both firms; as mobile phones and music players have become de rigeur, so Sony and Nintendo are banking upon bleeding-edge gaming systems become an integral part of today's portable culture.