Analyst: PSP 2 Is Dead on Arrival, iPod on the Rise

Analyst Michael Pachter, who watches the video games hardware and software markets for Wedbush Morgan Securities, has said that the handheld market is under assault by the iPod Touch from Apple and that the impending launches of the Nintendo 3DS and the much-rumored PlayStation Portable 2 will do nothing but slow the pace of the decline.

In his Pach Attack show, hosted on Gametrailers, the analyst has stated, “We’re starting to see DS hardware sales crack. I think the ubiquity of the iPod Touch is cutting into the handheld market, I think the PSP was dead on arrival and I think the PSP2 is going to be dead on arrival.”

He added, “It looks to me like young kids are just as happy playing with an iPod Touch or a 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.”

Pachter suggested that one of the main drivers for growth for Apple made devices was the fact that most games sold for them were significantly lower priced than those that arrived on the DS family of devices from Nintendo or on the PlayStation Portable from Sony.

The Nintendo DS line up has been a huge hit for Nintendo and the device is still selling very well, most recently taking the top spot in terms of hardware sales in the United States for the month of October.

The PlayStation Portable has always lived in the shadow of the Nintendo handhelds, but it has apparently been successful enough to justify the development of a newly upgraded version that game developers have been getting time with this year.

The Nintendo 3DS could be a success because of the experience it promises to deliver, full three-dimensional gaming without the use of any specialized glasses.

The device will be released in Japan in late February, and Europe and North America are set to get it before the end of March next year.