Analyst: PSP 2 will be ‘dead on arrival’, game handhelds in trouble

PSP 2 is coming … soon, but according to at least one analyst, it may as well not bother showing up. Speaking on his show Pach-Attack!, Wedbush Morgan’s Michael Pachter has predicted the console will be “dead on arrival”. He also claimed the gaming handheld market is “in trouble” and “reaching saturation point.”

The reason, predictably, is Apple.

As the iPhone and iPod Touch continue to birth hundreds of cheap (and occasionally very good quality) games, fewer people are shelling out $25 for a PSP or Nintendo DS cartridge, preferring to spend 99 cents on an iPhone or or iPod Touch app. Indeed, Sony seems to have foreseen this problem, and has reacted with the PlayStation Phone. As Pachter points out:

“We’re starting to see DS hardware sales crack, I think the big woody of the iPod Touch is cutting into the handheld market, I think the PSP is dead on arrival and I think the PSP2 is going to be dead on arrival.

“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.”

If, like me, you work in an office full of people obsessed with Flight Control and Angry Birds, it’s difficult to disagree.

[GameTrailers, via VG247]