Do you think is worth to consider, in the disscussion you guys are doing, that the PSP/DS generation was when piracy got "main stream" in the portable market? And this was at a time that part of the audience wasn't been diverted to other devices.
This is moving into an area that often results in a mangled discussion. You'll get the full range of views from piracy is a net-positive, to piracy is Satan incarnate. For me, it's more of a gray area when it comes to sales.
There's no doubt that piracy boosts hardware - it opens up the system to a new base of customers that wouldn't have looked at your system otherwise. With the increased hardware sales comes greater buzz, more people showing the system to their friends/families, more people talking about the system on internet boards, etc. It has the potential of being quite helpful overall to the hardware numbers.
For the manufacturer - it really depends on how the system is being sold as to whether or not that is a good thing. If a system is currently being sold at a loss to try to play out a long-term razor blade model - piracy can be quite hurtful. The manufacturer is taking a loss on each system sold, with no hope of selling any software to those pirates. But if the hardware is being sold for a profit, it can work out quite well for the manufacturer. They make money off of the pirate that they never would have seen otherwise, and they get the increased buzz and interest in the platform that comes from the stronger hardware sales.
And then there are the peripherals. Nintendo made a fortune off of pirates with the Wii. Nintendo made a healthy profit on each Wii sold to the pirates, and then a good number of these same pirates also went out and bought several peripherals. I personally know multiple people that pirated Wii games, but still went out and bought Wii Fit boards, classic controllers, extra Wiimotes/Nunchuks, Motion+ add-ons, Zappers, etc. It was crazy - and that was all pure profit from Nintendo's perspective, and money that they never would have seen otherwise.
But then there's the software - which is far trickier to analyze. Obviously, the people with hacked systems buy far less software (although some of them do still buy some software as well). But the increased buzz and stature of the platform that comes from the piracy also leads to better sales amongst non-pirates, who do go out and buy software. So what's the balance between the two? That's a hard one to answer.
Looking at the DS, which was the poster-boy for piracy with all of the flashcarts - common sense says that it must have hurt - but the numbers tell a different story. The DS finished with an attach rate above 6. That's a remarkable attach rate for a handheld - and far better than they've ever had with any other handheld. They never got above 4.6 with anything else. So historically, there's certainly no evidence of the DS software being hurt by the rampant piracy - the actual software numbers were ridiculously strong. So in the case of the DS, the piracy may very well have been a net-positive to Nintendo. They made good profit on each piece of hardware sold, and still sold a ton of software on the system overall.
On the other end of the scale, the PSP did have a lousy attach rate - so in that case piracy may have been a net negative to Sony.
Looking at another recent example - the 360 has been rife with piracy for the better part of the generation, from flashing the drive, to JTAG/RGH exploits. 360 pirates even use their own online network to play online with each other - without needing to worry about any MS bans. But the 360 has had an absolutely wonderful attach rate right throughout the generation. And when MS sells an extra controller, or even the occasional Kinect unit to some of those pirates - MS is making money off a customer base that they never would have had otherwise.
But then you have the extra costs associated with having to beef up online security, whack-a-mole system updates, etc. So it's not nearly as black and white as some people suggest (from the business perspective of the manufacturer). But it often makes for a difficult discussion, because people have some passionate views on the matter.
Also i think it's wrong to call the 220 million an anomaly. That market had always been there and was finally tapped into. Just because a good number are fine with tablets now doesn't mean they don't exist because if smartphones and tablets didn't come we could be seeing the same number this gen
Without even looking at whether the market always existed or not - when you have 5 data points, and 4 of them are 100M or less, and 1 data point is 220M - then yeah, by definition, that outlier is an anomaly to the data set.
But did the market always exist? Was that Touch Generation crowd always ready to dive in on a system with buttons and crosses for input - or did the touch screen access play a big role in actually realizing that market? The technology to address that market just didn't exist in a cost-effective manner prior to the previous generation - so I would argue that that market actually may not have existed for dedicated gaming handhelds prior to last gen.
And now more ubiquitous devices can address that market just as well, and at cheaper price-points than are viable on a dedicated gaming device - so it is very possible that that market truly no longer exists in meaningful numbers on dedicated handhelds again.
So an entirely new market popped up for a single generation, and has now disappeared again (with respect to dedicated gaming handhelds) - I'm okay referring to that as an anomaly.
And is there an undisputed gaming king ready to jump into the existing handheld market for the first time? Or is that an unusual (and so far, has only happened once) situation? I'm okay with calling that an anomaly as well.