"Clearly there is not the intoxication or hysteria that there is with the iPod," said Janco Partners analyst Mike Hickey, who is among those betting on the PSP's success.
SCEA's President and Chief Executive Kaz Hirai told Reuters in October the company's goal is to double its install base by selling between 2.5 million and 3 million additional PSPs in North America by year end. "We're mapping to that forecast ... We're very comfortable with where we are," Sony spokeswoman Molly Smith said in a recent interview.
The PSP debuted in late March, piling up accolades from technology luminaries and consumers taken with the bright, crisp color screen on the sleek black device. As of November, Sony said it has sold more than 3 million PSPs in North America, where it retails for around $250. "The PSP is for an older audience, the content is definitely for an older market," said IDC video game analyst Schelley Olhava.
Nintendo's Nintendo DS ($130) is the PSP's closest rival, although it targets a younger and more female market. Now in its second holiday season, the DS has sold 2.7 million units in the United States as of the end of November, according to NPD Funworld. The PSP's U.S. sales were 2.5 million as of November, the market researchers said.
The PSP launched with 24 games and now has over 70 titles available for the system, a Sony spokesman said. The game getting the most buzz -- and the one analysts predicted could drive device sales -- is "Grand Theft Auto: Liberty City Stories" part of the best-selling and very controversial urban action game franchise. Still, Hickey would like to see better games -- which will likely come as developers get to know the system better.
On the movie side, analysts said it is becoming more common for films to release on DVD and on Sony's Universal Media Disc at the same time. Underscoring the "adult" market for the PSP -- as well as pornography's role in early technology adoption -- Playboy.com offers video and picture downloads for the PSP. Numerous other Internet sites also offer porn downloads.
"We're really looking at our target as urban nomads," said Sony's Smith, who added that the PSP is the first device to meld multiple digital entertainment genres -- games, movies, music, photos and the Web.
While the campaign, which cropped up in seven markets from Los Angeles to Miami, spawned charges that it undermined the credibility of street art, Smith said it reached target buyers. Some analysts said short supplies of Microsoft Corp.'s (Nasdaq:MSFT - news) new Xbox 360 video game consoles may boost sales of the PSP and other hand-held devices, but others disagreed. Olhava and other analysts, who had hoped to see a holiday price cut on the PSP, said the its price tag remains an obstacle to more rapid growth. "The market is limited because the price is so high," Olhava said.