PSP2 will be "dead on arrival"

Analyst reckons handhelds are in trouble.

Sony's next handheld will be "dead on arrival", believes industry analyst Michael Pachter.

Speaking on his weekly Game Trailers Q&A, the Wedbush Morgan chatterbox pulled out his crystal ball and claimed, "We are approaching saturation on the handheld market.

"We're starting to see DS sales crack. The ubiquity of the iPod touch is cutting into the handheld market. I think the PSP is dead on arrival, I think the PSP2 is dead on arrival.

"It looks to me like young kids are just as happy playing with an iPod Touch or a Nano," he continued.

"The 3DS will prolong the handheld market for the game manufacturers but ultimately I think handhelds are in trouble.

"What's the difference if you play Tetris on an iPod Touch or Tetris on a DS? You pay a buck on the iPod Touch and you pay 20 bucks on the the DS. Parents prefer one dollar software.

"After the 3DS has its little rush, I think handhelds will continue to decline," he concludes.

There's still no word on when Sony's supposedly doomed PSP follow-up will be hitting the shelves, or whether you'll be able to play $1 Tetris on it, but Nintendo's 3DS arrives in March next year. And don't forget, there's also that rumoured PlayStation Phone allegedly in the works too.

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