Sony's PSP hits the streets -- and the grey market

Sony Computer Entertainment's (SCEI) long-awaited PSP (PlayStation Portable) went on sale in Japan Sunday to long lines of people, many of whom had been waiting through the night to buy a unit.

At Yodobashi Camera in Tokyo's Shinjuku district, around 1,000 people were already in line at 5 a.m., forming a 200-meter queue that wound around the store and down a neighboring street. It out-stretched the line for the launch of Nintendo's DS handheld device which went on sale Dec. 2, said Jiro Nishijima, a manager at Yodobashi Camera.

He wouldn't say how many PSPs the store had taken delivery of from Sony but guessed that they wouldn't last long.

"We expect to be sold out sometime during the morning," he said.

First in line was Tsukasa Arai, who said he had been waiting since 11:30 a.m on Saturday.

"I'm interested in the PSP because it can play music," he said. "I have one of the original PlayStations and some of the very old Nintendo consoles and for me gaming is a secondary feature."

In addition to games, the PSP can also play music and video files, and Sony plans later to release audio and movies on the PDP's UMD (Universal Media Disc) disc format. The only software available initially will be gaming titles, but users can play music on the device from a Memory Stick card.

"We are still talking to digital content publishers," said Masa Chatani, corporate executive and chief technology officer of SCEI, in an interview Friday. "That will include the studios in Hollywood and labels in New York. They are all pretty much interested in publishing their content on UMD for the PSP."

The initial software line-up consists of "Minna no Golf Portable" (Sony Computer Entertainment); "Ridge Racers" (Namco); "Armored Core Formula Front" (From Software); "Lumines" (Bandai); "Vampire Chronicle: The Chaos Tower" (Capcom), and "Mahjong Fight Club" (Konami). Another batch of titles is due Dec. 16.

Chatani was watching the line outside Yodobashi Camera on Sunday morning and said he was very pleased with how the launch was going.

At 6 a.m. when sales began, Arai was rewarded for his more than 18-hour wait by being the first person in Japan to officially purchase a PSP. He was served at a counter by Akikazu Fujisawa, president of Yodobashi Camera, and Ken Kutaragi, president and CEO of SCEI.

Kutaragi had also been up early on Saturday.

"I set my alarm for 4 a.m. but I opened my eyes about an hour earlier, thinking about the PSP," Kutaragi said. He confirmed Sony's plan to ship 500,000 units in Japan before the end of the year.

At 6:15 a.m., after sales had begun, the line in front of the store had grown by another 100 to 200 people.

Two versions of the PSP are available: a basic pack with the unit, power adapter and battery, and a value pack which also includes a carrying case, Memory Stick card, headphones and wrist strap. The basic pack costs YEN 20,790 (AUD$263) including tax and the value pack costs YEN 26,040 (AUD$330).

The apparent popularity of the PSP is likely to ensure that devices will fetch a premium on the grey market until supplies increase. SCEI planned to have 200,000 units shipped in time for Sunday's launch, and to ship a further 300,000 to Japanese retailers by the end of the year.

The first hints of grey market activity could be seen almost as soon as the PSP went on sale, and helped to explain the large number of what appeared to be homeless people that had been queuing to buy a unit. Customers were each allowed to buy only one PSP Sunday, and homeless people had been enlisted to stand in line and buy machines for others.

As they left the store, several of them headed to a small group of people standing a few meters from the shop's entrance. They handed over their just-purchased PSPs with the receipt and change, and in return were paid YEN 3,000 ($38). By 6 a.m. the group had a collection of at least 20 PSPs at their feet. The identity of the group was unknown.

A similar scene played out at the nearby Bic Camera store.

PSPs are being offered online via sites such as Yahoo Auctions in Japan and eBay in the U.S. In almost all cases it is impossible to verify whether the sellers have PSP units in hand or were offering them in the expectation of being able to buy one Sunday.

The PSP is scheduled to launch in the U.S. and Europe sometime in the first three months of 2005.

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