Pachter: “Handhelds are in trouble” from Apple threat, PSP2 is “going to be dead on arrival”


Wedbush Morgan Securities analyst Michael Pachter has revealed his thoughts that the handheld market is “in trouble,” and that when Sony do release their PSP2 it “is going to be dead on arrival.”

Having been queried regarding his thoughts as to whether console manufacturers would focus their efforts on the handheld market, seeing as current-generation systems are seemingly not set to be replaced anytime soon, Pachter responded:

“We’re not even close to saturated on the video game consoles, and we are way approaching saturation on the handheld market. We’re starting to see DS hardware sales crack, I think the big woody of the iPod Touch is cutting into the handheld market and I think the PSP is dead on arrival [and that the] PSP2 is going to be dead on arrival.”

He continues, “It looks to me like young kids are just as happy playing with an iPod Touch or Nano. The Touch is cool, it plays games, plays music, they’re going to put a camera in it and you’re going to get all kinds of cool stuff.”

However, surely both critic and consumer reaction to Nintendo’s upcoming 3DS handheld is a positive sign for the market? Not to Pachter, who still feels that “ultimately” the handheld systems are in trouble and that once the 3DS sales rush has passed we’ll still be in the same situation.

“The 3DS will prolong the handheld market for the game manufacturers, but ultimately I think handhelds are in trouble,” Pachter adds. “I really think as the iPod Touch gets more and more powerful, you’re going to see a lot of free games over there. What’s the difference if you can play Tetris on the iPod Touch or on the DS? Well, you pay $1 on the iPod Touch, you pay $20 on the DS. Parents prefer $1 or free software, I think the iPod Touch is going to sell really well. So, after the 3DS has had its little rush I think the handhelds will continue to decline.”

[Thanks Gametrailers]

Comments 7
  1. My personal opinion with Ipod touch is that it is great for cheap flash mini games. It’s true that kids love these games, but it is also true that they grow tired of them rather quickly.

    I believe that the Ipod touch is not ready for Hadukens or Combos in fighting games just yet. FPS is also another area were I cant see the Ipod taking over.

    Now if your they type of gamer (like my 5/yo niece) who likes to dress cute dolls, babysit and play racing games with no acceleration buttons/controls. Then the Ipod touch was made for you

  2. i agree with pachter on the psp2 but he’s dead wrong when it comes to the 3ds. the pokemon games are the main system sellers for nintendos handhelds that attractive every age group, as well with mario games and other nintendo games. until apple can persuade nintendo into going multiplatform with its games, nintendo will always be a dominate force in the handheld market even if it doesn’t outsell the ipod touch

  3. i swear i almost burst out laughing when i read the title, but reading his argument i see where he’s coming from… but he’s seriously deluded if he thinks that he’s going to make so much as a chip in nintendo handheld sales. When the 3ds comes out, and it’s sales go down, they’ll come out with a new one that’ll decrease it’s predecessors price and have everyone who didn’t buy it, go out and get it. Besides, you can get just as good flash games online, for free. But it might bring down some psp2 sales, but I doubt it, since it’ll probably have amazing capabilities better than any of the other one’s, who knows, they might jam 3d in there.

  4. I think Pachter is right Nintendo and Sony are in big trouble and only have themselves to blame.The PSP was a powerfull device but because of Sony’s backward business practices never opened it up for external developers to develop Apps for it and this is the same for Nintendo and and their DS. The PSP has the biggest screen in terms of physical size but yet fails to utilize it beyond gaming.

    The Ipod does practically everything except calling that one would want from a handheld device yet Sony is Failing to fix that useless annoying browser that crashes everytime you open a website with more than two images.The PSP cannot even do basic functions like open notepad files, which is one of the most basic things any worthy handheld should be able to do.

    I’m starting this thread on

  5. I think your absolutely right about the micro managing of small apps and software takingthe cake over the handheld market. but knowing that the psp2 has phone functionality doesn’t eliminate it from the micro managed market. plus the fact that its going to have the whole gamepad? that blows my mind. They also announced that theres a chance that you’d be able to continue your ps3 games onto your psp2 system. thus making your money count with your games…(being compatible on 2 systems) at the same quality on both. For me… having capable devices is genious. unlike every device that has to come out for every generation of ipod. a new generation every year? makes me feel obsolete when it comes to the “newest” one. i can at least rely on my psp lasting a good 10 years.

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