Wired News: PSP Hackers Go Retro

Interesting. Sony has a new system, which gets hacked very quickly, it gets to be even more popular because of it, so they issue a firmware release to stop it. Meanwhile, complaints are in that there is not enough content to convince the people (like me) holding out from buying the new handheld to stop holding out. Why you ask? Simple.

The hardware in today's technology is a throwaway. Why you buy most printers under $200, you are simply covering the cost most times to bring it to your local store. That is why all manner of three in one units (typically Lexmark units) are bundled with new computer systems. The companies do not make money on a hundred dollar printer; they make it on the consumables, the paper and the ink, that you must buy to continue using that piece of hardware.

The game console folks have the exact same margin. Start at a high price to help offset R&D and because the market will bear a higher price for anything new. Flood the market with the next "new" and start the feeding frenzy for the consumables of that item. Next, continue for the demand of new consumables to sustain the high margins. Do you really think it is fair to charge more money for a movie on the UMD discs of the PSP compared to the standard DVD? Do you think it is right to be charged $50 or more for the games to be played on this unit? Well, it is fair if you are willing to cough up for it.

All of the game consoles have been the same. The difference is that more regular technology is making its way into the console (i.e. Pentium III 733 cpus used in the X-box) so it is more attractive to use them for things other than the original intent; thus, robbing the high margin consumables from the maker. The X-box can be used as a cheap Linux firewall. At the time of release (around 2002), where could you find a computer that hooked up to a TV or display, could be carried in a laptop bag and had a high resolution graphics chip and fast subsystem? that's right, you could not, so the units were snapped up and used in new ways but the high-margin games intended for the box sat on the shelves collecting dust. I'll post another day outlining the very well established modding market in the X-box world as well.

Sony can fight to put the genie back into the bottle, but they may be better off expanding and perfect the mods themselves and then selling those secrets as their new consumables. It will save them a lot of time and trouble in the long run.

Ciao.

Wired News: PSP Hackers Go Retro