PlayStation Vita — Sony’s Conduit to Building a New Mobile Ecosystem

Gaming is just one aspect of Sony's latest product

By Anthony John Agnello, Consumer and Technology Writer

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On Tuesday, Apple (NASDAQ:AAPL) is expected to unveil its latest line of devices, including the iPhone 5 and a cheaper version of the iPhone 4. The company’s competitors continue to fight Apple on its own terms, releasing smartphone after smartphone and hoping one connects with consumers on the same level. Sony (NYSE:SNE), on the other hand, is trying something else with its PlayStation Vita — a device that looks like an old-fashioned portable video game machine at first blush but might turn out to be much, much more.

Sony Computer Entertainment director of hardware marketing John Koller detailed for InvestorPlace his company’s plans to carve out a new ecosystem in the mobile space.

“We firmly believe that PlayStation Vita will supersede the mobile market when launched, and have grand ambitions for a product that is really at the forefront of innovation,” he said. “The mobile market in the U.S. offers consumers extremely light gaming options. We developed PlayStation Vita after observing a significant addressable market that demands rich, deep handheld gaming.”

In terms of purely addressing the video game market, the Vita certainly has the partners to perform well. When the device releases in the U.S. next spring (Vita releases in Japan in December), it will be backed by entries in multimillion-copy-selling franchises like Activision Blizzard‘s (NASDAQ:ATVI) Call of Duty and Time Warner-owned (NYSE:TWX) Warner Bros. Interactive’s Mortal Kombat.

Given that video games are the most-used apps on smartphones — iPhone users play games for about 15 hours per month on average — Sony is smart to try to win untapped revenue in the mobile market with a high-end, $250 device Apple’s current technology can’t match.

The Vita is just one component of a larger mobile strategy Sony is unfurling, though. The reason Sony and Apple are direct competitors even though their marquee mobile devices are so different is that they are attempting to create whole new ecosystems of products and services to drive sales. Apple’s devices have been hugely successful in large part because of the iTunes and App Store digital storefronts and the entertainment options sold through both. While Sony has opened plenty of digital services in the past, such as the Qriocity subscription music service, its efforts have been disjointed. The Vita and PlayStation Suite look to change that.

“Starting this November, content developers can create content for PlayStation Certified devices, hardware certified through the PS Suite license program, as well as for PS Vita,” Koller said. This means games and apps created with the Vita in mind will be available on Google (NASDAQ:GOOG) Android smartphones and tablets, as well as Sony’s own products, such as the PlayStation 3.

“The ability to access the wide variety of applications available on PS Vita and PS3 is a huge incentive for consumers who also have PS Suite-enabled phones or the S1 tablet (Sony’s recently released iPad competitor),” Koller said. “The rigorous certification process ensures quality experiences only possible on PlayStation.”

Koller might have emphasized Sony’s own products, but it will be Sony’s infiltration of other mobile devices that will give it a real fighting chance against Apple. Consumers already have proven their willingness to spend on multiple portable devices. Even though the iPhone and iPad perform many of the same functions, people have purchased both in the millions. Sony’s Vita is comparatively affordable, and purely as a good-looking video game device, it should find an audience, but Sony’s real success will be in creating that viable digital marketplace, selling its digital wares across multiple products.

Sony’s sheer size has made its stock unpredictable in recent years. One division’s success, like the company’s film studio division, can be completely overshadowed by the failures of another segment, like television production. The Vita and PlayStation mobile initiative at the company represents an impressive cohesion across multiple segments that bodes well for the company in 2012 and beyond. Apple shouldn’t be quaking in its boots, but the technology industry shouldn’t be surprised by a resurgent Sony.

As of this writing, Anthony John Agnello did not own a position in any of the aforementioned stocks. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, https://investorplace.com/2011/10/sony-playstation-vita-apple-iphone-ps-suite/.

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