Pachter: PSP Go price is a rip off

[Queasy]

Kotaku summary of a Gametrailer's Bonus Round interview. He later semi-retracts the rip off statement in the interview with Kotaku.

PSPgo, the newest addition to the PlayStation family, will carry a premium price of $249 USD when it launches this October. That's $80 more than the PSP-3000, a figure considered too high by some gamers?and one analyst.

That analyst is Wedbush Morgan's Michael Pachter, who commented on the most recent episode of GameTrailers' Bonus Round that "$249 is too much. Period." Pachter agreed with host Geoff Keighley that Sony is "ripping off the consumer" at that price point, claiming that the PSPgo costs less to make than the already profitable PSP-3000. Sony, on the other hand, thinks it's priced appropriately.

We talked to Pachter today to get more of his thoughts on the device and its asking price.

Michael Pachter says that Sony execs "made it clear that the PSP Go pricing strategy was intended to compete with the iPod Touch."

"I don't disagree with them that the comparison is favorable from a technology perspective, so I can't fault their logic," Pachter said."However, the iPod Touch has a ridiculously loyal fan base, tremendous brand awareness, gigantic advertising support, a touch screen, an app store, and a LOT of music."

But the PSP is not an iPod Touch, despite sharing some capabilities. Its strengths lie in its gaming functions, Pachter admits.

"The PSP Go has a better gaming architecture and better games, but lacks many of the features that the iPod Touch has," he said via e-mail. "In my view, its price should be compared to the PSP 3000, which does pretty much all the same things and is $80 cheaper."

Pachter said during his Bonus Round screen time that pricing the new PSP at a price above the Xbox 360 Arcade and at the Wii's price point was reflective of the handheld costing too much.

"I just am not going to pull punches and say that the price of the PSP Go is justified, since I don't think it will work at that level," the analyst said. "If it cost them $80 more, I would not have answered Keighley the same way. However, I think it costs the same or less to produce, so the increase in price means an increase in profit at the expense of the consumer. I think that Apple rips off consumers as well (look at THEIR profits), but wasn't asked that question."

Sony's John Koller has said over the past week that the device will carry a higher profit margin for retailers, a tactic I inferred as reflective of the higher suggested retail price. But Pachter disagreed.

"I don't think it has anything to do with retail, and truly think that Sony is right to charge what the market will bear," Pachter said. "The fact is that Sony has been subsidizing the cost of the PS3 since launch, so to say that they are 'ripping off' consumers now is not really fair, and if I could retract the statement, I would do so."

But the Wedbush Morgan analyst believes the product will sell, even at that price.

"I think that they genuinely believe that the market will support this price point, I just happen to disagree. It's hard to believe that Sony is giving much away to GameStop, perhaps they are allowing a 15% margin instead of the more typical 6 ? 10%, but most of the "profit" on the device will go into Sony's coffers."

 

[RyanPaulShaffer]

Two hundred and forty nine US dollars.

Ahhh Sony...always good for a laugh!

 

[Q]

My god that is expensive

 

[Redshirt 24]

I had no idea it'd cost that much.

Damn, Sony.

 

[erwos]

The fact that they feel compelled to launch it at that price really communicates how bad their financial situation is, and how badly they understand the market. To compete with the DSi, they need to hit its price point. To compete with the iPod Touch, they need to have a much better, touchscreen-oriented interface and some sort of decent music service. They've got neither, hence the epic fail.

I think the hardware itself is pretty sexy - just not the price point.

 

[R Nilla]

I was amused by Pachter's comments in that Bonus Round episode.

The PSP Go is almost like the DS Lite version of the PSP, so I don't understand why it costs $250. The DS Lite launched for $20 less than the DS.

You could try to compare the PSP Go to the DSi, but I think that would be a mistake because the DSi actually added features and has hardware improvements (although the GBA slot was removed). As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD. Even then, the PSP Go is still a larger increase in price percentage wise than the DSi (47% vs 31%).

 

[Queasy]

Originally posted by: R Nilla
As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD. Even then, the PSP Go is still a larger increase in price percentage wise than the DSi (47% vs 31%).

Yep, and in the video, Pachter explicitly states that the UMD assembly costs more than the the 16GB internal memory that is replacing it.

 

[R Nilla]

Originally posted by: Queasy

Originally posted by: R Nilla
As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD. Even then, the PSP Go is still a larger increase in price percentage wise than the DSi (47% vs 31%).

Yep, and in the video, Pachter explicitly states that the UMD assembly costs more than the the 16GB internal memory that is replacing it.

PSP Gouge?

 

[Kromis]

Originally posted by: R Nilla

Originally posted by: Queasy

Originally posted by: R Nilla
As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD. Even then, the PSP Go is still a larger increase in price percentage wise than the DSi (47% vs 31%).

Yep, and in the video, Pachter explicitly states that the UMD assembly costs more than the the 16GB internal memory that is replacing it.

PSP Gouge?

:laugh: :laugh: :laugh:

 

[Dumac]

Lol yeah, I don't know why the damn thing is so expensive.

 

[tw1164]

I don't know why Sony thinks the PSP Go can compete with the Ipod Touch. Sony needs to start stealing management personnel from Nintendo and Microsoft.

 

[Golgatha]

Originally posted by: Kromis

Originally posted by: R Nilla

Originally posted by: Queasy

Originally posted by: R Nilla
As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD. Even then, the PSP Go is still a larger increase in price percentage wise than the DSi (47% vs 31%).

Yep, and in the video, Pachter explicitly states that the UMD assembly costs more than the the 16GB internal memory that is replacing it.

PSP Gouge?

:laugh: :laugh: :laugh:

Especially when you consider a 16GB Memory Stick in your old PSP-x000 can give you all the niceties of the all-digital PSP Go, with a larger screen and controls. You lose a bit in portability, but you gain the ability to use UMD movies and games, which is significant since you can often get those on sale or 2nd hand.

 

[hans030390]

I wish I got payed to make obvious statements.

 

[erwos]

Originally posted by: R Nilla
As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD.

It also gained Bluetooth, which is a fairly serious improvement, provided they support it correctly (eg, tethering, A2DP, headset, PS3 controller, etc.). I'd argue that the hardware improvements made to the PSP Go are about as substantial as those made to the DSi. I'm disappointed it didn't have HDMI output, but them's the breaks.

I personally think Pachter is wrong when he says the UMD drive costs more than 16gb of flash, though.

 

[purbeast0]

Originally posted by: erwos

Originally posted by: R Nilla
As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD.

It also gained Bluetooth, which is a fairly serious improvement, provided they support it correctly (eg, tethering, A2DP, headset, PS3 controller, etc.). I'd argue that the hardware improvements made to the PSP Go are about as substantial as those made to the DSi. I'm disappointed it didn't have HDMI output, but them's the breaks.

I personally think Pachter is wrong when he says the UMD drive costs more than 16gb of flash, though.

lol

 

[Rage187]

Don't forget that you will have to buy all new accesories as 2000 or 3000 PSP accessories will work not with the PSPGouge.

 

[R Nilla]

Originally posted by: erwos

Originally posted by: R Nilla
As far as I know the PSP Go is just a smaller PSP with internal memory and no UMD.

It also gained Bluetooth, which is a fairly serious improvement, provided they support it correctly (eg, tethering, A2DP, headset, PS3 controller, etc.). I'd argue that the hardware improvements made to the PSP Go are about as substantial as those made to the DSi.

Bluetooth does not warrant $80. The potential uses are irrelevant unless they become actual--those features could be great but Sony hasn't announced tethering, PS3 controller, etc. so they add no value.

I brought up the DSi because of the inevitable comparison and also because it actually has increased technical specifications (not just onboard storage but also CPU and RAM) over the DSL. But like I stated, I don't think the DSi and PSP Go iterations are analogous.

Don't get me wrong, the PSP Go is slick but it's overpriced for what it is.

 

[DaveSimmons]

I'd expect the flash and bluetooth chip to cost to be comparable to the UMD drive. Motor, latch, read-write head vs. 2 chips.

As I said in the E3 thread:
- no cheap used games
- no cheap sale or closeout UMD games (at least initially prices will probably be full retail for digital downloads)
- no way to sell your games
- no gamefly / rentals
- smaller screen
- $80 more!

= no sale for me.

 

[RyanPaulShaffer]

So let me get this straight.

The PSPGo:

- Removes the UMD drive
- Has a smaller screen
+ Adds 16 GB of internal memory
+ Adds BlueTooth
- WTF STILL doesn't support 802.11g or WPA/WPA2?!
- Two hundred and forty nine US Dollars

The DSi:

- Removed the GBA slot
+ Has a larger screen
+ Has a faster processor
+ Has more system memory
+ Has 256 MB of internal storage
+ Adds support for 802.11g and WPA/WPA2
+ Adds a microSD slot for external storage possibilities
+ Adds the ability to play music files
+ Adds two cameras (albeit pretty crummy ones)
- One hundred and sixty nine US dollars

...

Did Kaz Hirai introduce the PSPGo? Is a copy of RIIIIIIDGE RACER included at the very least?!

Good grief, what an awful value! This is almost as silly as the SIX HUNDRED US DOLLARS E3 announcement!

 

[erwos]

Originally posted by: RyanPaulShaffer
- WTF STILL doesn't support 802.11g or WPA/WPA2?!

Um, what? My PSP works just fine on my WPA network. We also don't know for sure that more memory or a faster CPU isn't being used - you'll recall that these were additions to the PSP-3000, so it's not out of the question. Ditto for 802.11g.

I think, perhaps, that we should wait for the real specs of this thing before hammering it too hard.

 

[ric1287]

where are all the people defending Sony? There were like 5 people saying that E3 wasn't a massive fail for them, where you guys at?

Sony is running themselves into the ground with these stupid ass decisions.

 

[DaveSimmons]

I think, perhaps, that we should wait for the real specs of this thing before hammering it too hard.

"But I'm angry nowww!" - Homer at the gun shop

 

[RyanPaulShaffer]

Originally posted by: erwos

Originally posted by: RyanPaulShaffer
- WTF STILL doesn't support 802.11g or WPA/WPA2?!

Um, what? My PSP works just fine on my WPA network. We also don't know for sure that more memory or a faster CPU isn't being used - you'll recall that these were additions to the PSP-3000, so it's not out of the question. Ditto for 802.11g.

I think, perhaps, that we should wait for the real specs of this thing before hammering it too hard.

According to what I have seen, the PSPGo only supports 802.11b. None of the previous models of the PSP support 802.11g either.

Also, from what I have seen, it has the same MIPS 333 MHz processor as the PSP-3000.

Now, like you said, this might all be speculative at this point, but...I would think Sony would have made it a talking point if it improved on these features from the PSP-3000. After all, they will have to work very hard to sell the two hundred and forty nine US dollars price point to the consumers! Another selling point or two would definitely have been on their to-do list...

 

[erwos]

Originally posted by: RyanPaulShaffer
Now, like you said, this might all be speculative at this point, but...I would think Sony would have made it a talking point if it improved on these features from the PSP-3000. After all, they will have to work very hard to sell the two hundred and forty nine US dollars price point to the consumers! Another selling point or two would definitely have been on their to-do list...

Oh, I totally agree that they're dropping the ball... but Nintendo never really came out and announced the better CPU and memory in the DSi - or if they did, it was in a fairly oblique fashion.

Besides, comparing improvements is slightly bogus - you need to compare the entire package. the PSP has more RAM, a faster CPU, more on-board storage, TV-out, no camera, no touchscreens, better media playback, less (equal?) battery life, etc etc. I'm not saying the PSP Go! is a winner there, either, but it's at least a more honest comparison, and one we'll probably be seeing more of.

 

[RyanPaulShaffer]

Originally posted by: erwos

Originally posted by: RyanPaulShaffer
Now, like you said, this might all be speculative at this point, but...I would think Sony would have made it a talking point if it improved on these features from the PSP-3000. After all, they will have to work very hard to sell the two hundred and forty nine US dollars price point to the consumers! Another selling point or two would definitely have been on their to-do list...

Oh, I totally agree that they're dropping the ball... but Nintendo never really came out and announced the better CPU and memory in the DSi - or if they did, it was in a fairly oblique fashion.

Besides, comparing improvements is slightly bogus - you need to compare the entire package. the PSP has more RAM, a faster CPU, more on-board storage, TV-out, no camera, no touchscreens, better media playback, less (equal?) battery life, etc etc. I'm not saying the PSP Go! is a winner there, either, but it's at least a more honest comparison, and one we'll probably be seeing more of.

I was merely comparing the improvements that Nintendo made to the DSi over the DSLite to the improvements Sony made to the PSPGo over the PSP-3000.

My list was merely meant to show that Sony is charging a premium price for the PSPGo, but has done very little as far as improvements go to justify that price.