PSP Go! Receives More Retailer Boycotts

Scribbled on September 23rd, 2009 by Jordan Lund
Filed in Industry News, Sony PSP

It seems the upcoming release of the PSP Go! is continuing to meet disdain and retailer resistance.

Initially, famed game industry analyst Michael Pachter called the machine “a rip-off” (before hastily retracting those statements), then a few relatively minor European retailers announced that they would not carry the device.

Now, Kotaku is reporting a much more major blow: The Australian branch of Electronics Boutique (EB Games) doesn’t appear to be carrying it either. The American EB Games website, owned by GameStop, still offers a pre-order with a release date of October 1 for the PSP Go! for $250 USD, while the Australian version of the retailers site shows only the stock PSPs listed; entering PSP GO and PSPGo into their search box reveals “No results found.”

So what is going on here?

Well, first, as I’ve written before, $250 is too expensive. Sony seems to have forgotten that when you make a machine smaller and remove features you’re supposed to drop the price, not raise it. The head of Sony Computer Entertainment Europe, Andrew House, attempted to justify the higher price tag by saying: “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.” Despite the fact that it’s NOT new hardware, has a smaller screen and a complete inability to play the hundreds of UMD based games and movies that are already in release.

This is the sticking point for retailers. Profit margins on hardware are much lower than the profit margins on software and insignificant compared to the profits on accessories. So why should they sell a machine that doesn’t benefit them? Game retailers in the US see as much as 40% of their business coming from used game sales, a category where the Go will be completely incapable of contributing.

There are a few ways Sony could fix this:

Sell boxed download codes as they did with Patapon 2. Remember the Patapon 2 experiment? Buy the game in the store, get a spiffy box, manual and a code to download the game but no UMD. Apparently that idea went nowhere fast as Patapon 2 has only sold 1/10th that off the original.
Allow retailers to sell PSN download cards, much in the same way they sell iTunes cards or World of Warcraft subscription cards.
Lower the price. Make the stock PSP with no add ons $99, the PSP that comes with a game $130 and the PSP GO the $170 that the current PSP sells for. That’s really the only way they’re going to resurrect PSP hardware and software sales.

Let us know what you think.

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