[quote name='anonymouswhoami']Atari did rest on its laurels. The 5200 did not come out until 1982, but by then Colecovision was already out. Why would people purchase a unit that wasn't as powerful as the competition and that also couldn't play their old 2600 games, something that the Colecovision was able to do (with an adapter). The games for the 5200 were the same titles as the 2600, just upgraded in terms of graphics (Pac Man, Pitfall, River Raid, Pole Position). There was no innovation. Nintendo execs think the same way about the Gameboy. Without competition, the original Game Boy's life span was more than 12 years! There was no need to innovate because they didn't have to. I don't call adding color or trimming the size of the unit a major upgrade. In the same time span, 3 generations of consoles came and went. Instead of going back to the drawing board and coming up with innovative hardware, they give us a souped up GBA with a second screen? The price tag of the PSP will also plummet with time. Remember, the Sony Playstation was $299 at launch, the Sega Saturn $399. The PSP is not aimed at the 12 year old like the GBA, it's aimed at the 20-35 year old with disposable cash.[/quote]
You have a distorted concept of history. The chipset in the Colecovision was no more recent than that of the Atari. It was all of the shelf chips that first appeared in the 70's. Anyone could duplicate the Coleco because they had zero inhouse silicon engineering personnel. I've programmed both the Coleco/MSX and Atari 8-bit systems. There are things I could do on the Atari that would be like pulling teeth on the Coleco. In addition, those titles that appeared both on the 2600 and 5200 were in the minority. Those staples, which have appeared on almost every console ever marketed, were primarily the early releases that already existed for the Atari computers and made for a quick launch library. The 8K Pac-man got the intermissions it was lacking as a 16K 5200 cart. The eventually library consisted primarily of games that had no 2600 version or that version was so horribly inferior as to make comparison painfully lopsided.
If you don't think adding color to the GameBoy was a major upgrade, well, you're insane. The massive sales of GameBoy Color systems and massive software support attest it was much more than just a minor upgrade for Nintendo's bottom line. Likewise, the Gameboy Pocket didn't just trim the size. The screen was a major imporvement in clarity and made for a major spike in sales to those who'd found its predecessor unusable. Again the sales prove the value of the revision.
If you think the DS is merely a souped up GBA with asecond screen, you're in for a surprise. I spent time with it hands-on at E3. This is a much more powerful and highly innovative design that strives to stay close to the formula that made the GB line such a success. The test of a higher price of entry is the sole risk. The extent of that risk is minor compared to what Sony is attempting.
It's not clear to me why you're referencing the price of the Sega Saturn at launch. What has that to do with this. As for the US launch price of the PS1, so what? We're all well aware that these thing drop in cost over time but this only happens, outside of fire sales like the Dreamcast demise, when a product is a success at its original price. Sony, and most importantly third party developers, need to see some serious ROI to sustain this product long enough for advances to allow price drops. In the same time frame the DS will do the same. It is unlikely Sony will be able to close that gap. While the DS moves down into the realm of temptation purchases the PSP will go from very expensive to merely expensive. If this was a winning formula SNK would have sold a lot more consoles.
Referencing the PSP demographic is another trouble point. First, there is no proven market for portable game systems in the adult market. The GBA, despite reaching a goodly number of adult gamers, would be worthless to Nintendo if that segment were the sole purchaasers. Kids outnumber adults in the handheld sector by about 100 to 1. The need to control whiny children during long car trips is a major market in of itself. Plenty of adults who have a PS2 at home for Madden wouldn't be caught dead in public with a portable game system.
The second problem is too assume those adults who do want a portable game system will find the price reasonable even with their deeper pockets. This is not an iPOD. The iPOD is a primarily passive device. You start it on a playlist and ignore it. It is an environmental accessory rather the focus of attention. You can find numerous people going through their entire day with an iPOD strapped on since it only plays what they like and holds enough to go all day without repeating. On that basis it justifies the price. The PSP doesn't fit that equation. Yes, plenty of us here are GBA owners but the typical employed adult doesn't have enough free time away from home to make a portable game system that enticing at such a price. At the same time the price puts it out of the reach of kids and will make their parents gasp if requested to buy it.
IMHO, Sony is trying to win the market by sheer firepower directed at a target that may not exist. They aren't doing anything Nintendo couldn't do if they thought there was a market at that level. Their technology partners have more than a little experience in silicon for portable systems. Heck, with some engineering refinements taking advantage of current production process sizes it wouldn't be that hard to make a portable GameCube that sold for that price and ran the existing library. The question is, who's buying?