Thursday, June 25, 2009

PSP Go a Ripoff?

Here's what Joystiq had to say:

Michael Pachter retracted one of the most correct statements he's ever made: the PSP Go is a "rip off" for consumers. The PSP Go takes away the expensive-to-manufacture UMD drive and replaces it with cheap flash memory -- and yet it still costs more than the current PSP-3000. Fun fact: You can buy a standard PSP and 16GB Memory Stick Duo Pro right now for less than a PSP Go.

Sure, the new form factor looks nice, but Sony should have no manufacturing costs to pass down to the consumer. MCV asked SCEE's Andrew House if R&D or retailer markups were the reason behind PSP Go's high price. "Those aren't the factors," House admitted. "When you introduce a new piece of hardware you have the opportunity to say there is a certain premium that is associated with it, and we took that into account."

Essentially, House is admitting you can charge more for technology when it's new. It's unsurprising, but it certainly leaves a bad taste knowing Sony can easily charge less for the PSP Go. Perhaps Sony will follow the iPhone's footsteps and suddenly drop the price of the PSP weeks after early adopters pay their "premium" price.

It wouldn't be the first time this has happened, sadly.

See, here's why the PSP struggles compared to the DS.  First, how many revisions of the DS have their been?  Three.  OK, that sounds like a lot, but consider that the original DS still works fine.  It's a little bigger, sure, but not awfully so.  There's no extra features on the DS Lite that make it more essential than the original DS.  It's just a smaller version.  In fact, you could argue that there's really only been one major revision of the DS, the DSi.  In the DSi, we saw WPA encryption, cameras, a faster processor, and flash memory as well as the removal of the now-vestigial GBA slot.  As of yet, there are no DSi exclusives except for DSiWare games.  Anything you can play for the DS works on the DSi or the DS Lite.

However, the PSP has undergone four separate revisions, and the Go is the biggest of them all.  Some of the earlier revisions are fairly obsolete, with bad batteries and weird button layouts as well as weird speaker placement.  Even the supposedly game-changing Go isn't easy to hold for people with small hands.  Many also speculate that the higher sales of PSPs are only there because of how easy it is to crack.  So will the Go really help Sony?

Now, Sony's strategy has a couple of parts to it:  Launch the Go at a premium price, and then launch great games alongside it in UMD-less formats so that you HAVE to play the games on the PSP Go.  There's a major flaw here.  You have 50 million users of your system.  Sure, they can download games too, but let's say that 30 million of them will choose not to.

(30 million is an arbitrary number, but more than likely realistic.  Handhelds appeal mostly to a casual crowd.  A lot of casual players don't care about downloadable games.  Also, there are huge amounts of modded PSPs floating around worldwide.  Also remember that since 2007, we've seen about 30 million PSPs sold, but the ones before then are using old firmware or aren't getting as much use.  By point of comparison, I would say that less that 10 percent of Wii owners, or 5 million Wiis are online.  It's still a substantial number, but not as much as you'd think.  This has been a special message from the department of pulling numbers out of my butt.)

If that's the number of people who aren't going to use the internet on their PSP, you're shutting off 3/5 of your customer base.  Now, you're selling games to 20 million people instead of 50 million.  That puts you back in the same boat as you had before 2007: Not enough install base for the games that you're selling.

"But the sales for the PSP Go will be great, so they'll offset that."  Now we go back to the quote at the beginning from Joystiq.  Sony's charging more than they should.  The hardcore, who are Sony's bread and butter this generation, know that and they're okay with their PSP-3000s.  I understand that Sony has to make a profit somewhere along their line because the PS3 isn't working out for them like they'd hoped.  Still, it's tying off a large portion of your customer base just to make a little bit more money.  Is it worth it?

Will they still sell a lot of units?  Yes.  Definitely.  Will it be a resounding success?  Maybe.  Will it still put Sony in trouble down the line?  Yes.  It all smacks of robbing Peter to pay Paul, but more power to them.  I'm sure an argument can be made FOR the move as well, and I look forward to seeing some.