Since the launch of the PSP, sales of UMD movies have gone from underwhelming to almost invisible, prompting experts to predict that the end is near.

The lackluster response to UMDs already has prompted two major movie studios to discontinue their UMD movie releases and left others contemplating following suit or, at the minimum, scaling back the number of UMD titles slated for releases.

Adding to Sony's troubles, some retailers are considering getting out of the UMD business.

Who Needs Movies?

According to news reports today, retail giant Wal-Mart is considering pulling UMDs off the shelves, or at least reducing its stock drastically.

In addition, Universal has bid farewell to the format. A high-placed executive at Universal, in an interview with Reuters, said, "It's awful. Sales are near zilch. It's another Sony bomb -- like Blu-Ray."

Paramount Pictures, likewise, is said to be on the verge of giving the format the old heave-ho. "We continue to evaluate the PSP platform for each title, and if it makes sense for business reasons and the target audience, we will release them," Brenda Ciccone, a spokesperson for Paramount Pictures, was quoted by Reuters as saying.

Image Entertainment also has turned its back on the format, while other studios, including 20th Century Fox and Buena Vista, have reduced the number of UMD titles scheduled for release.

In stark contrast to these recent moves, initial sales for the format were strong, with two productions from Sony Pictures selling more than 100,000 units within two months. But it wasn't long before sales of UMD movies sank.

At the time, industry experts said that Sony had given consumers too many choices. During the first five months following the PSP's launch in March 2005, some 239 movies and TV shows were released or scheduled for release on UMD.

Apple's debut last fall of the video iPod further cut into the PSP's appeal as a video-watching device. While videos purchased from Apple's iTunes store can be viewed either on the iPod or on a computer, UMD movies can be viewed only on the PSP.

Proprietary Technology

Part of the reason Sony is having this problem, said Mukul Krishna, an analyst at Frost & Sullivan, is the proprietary nature of the UMD technology. While most other developers are moving to open formats that offer greater interoperability, Sony's focus on developing its own technologies ties users down to a single device.

"Anyone who is going for anything proprietary is shooting themselves in the foot," Krishna opined. "Unless it is a very niche market, it makes no sense having a proprietary format."

Krishna said the word out on the street is that Sony will have to pull UMDs and develop a more open standard. PSP sales might suffer in the short term, he said, but the move would give Sony the ability to start focusing more completely on the PSP's gaming functionality.

"The fact that they have a very good portable console and are coming out with a next-generation device will address a lot of these issues," Krishna said. "But Sony has to realize that [the PSP's attraction] is really gaming. Looking at movies, especially in the UMD format, doesn't make any sense."