PSP World

Will Pachter's Complaining Cause Sony to Rethink $249 Price?

For such a small piece of electronics gear, the PSP Go is expensive. Even though other technology gadgets also tend to increase in price as they decrease in size, many Sony fans were hit with sticker shock during the recent E3 press conference at which the eventual price of the machine was announced. Sony has taken away the clunky UMD mechanical drive and replaced it with a whopping 16GB of flash memory, responsible for most of the price increase. Other specifications such as Bluetooth connectivity and Memory Card Micro support have contributed to the higher price as well.

We originally commented on the price announcement, arguing that it was far too high to attract current PSP owners in need of an upgrade. We felt that a sub-$200 price point would be more reasonable and would have a higher chance of success with more casual gamers.

Wedbush Morgan Analyst Michael Pachter agrees with our assessment. On a recent television appearance, Pachter criticized Sony for offering a device that was more expensive than Apple's competing iPhone. Not only that, but he believes that the PSP Go will ultimately be cheaper to manufacture for Sony due to its smaller form factor:

"The $169 PSP-3000 is a profitable device. The disc assembly, for a UMD, costs more than 16 gigs of flash does. So this new device doesn't cost them as much as the PSP-3000 and they jack the price up by 80 dollars? They're ripping off the consumer ... they're making a lot more money on the PSP Go than the PSP-3000."

Pachter is probably underestimating the cost of the smaller electronics and 16GB of flash memory that fit inside the PSP Go. Nevertheless, he makes a good point that most consumers will see little reasons to upgrade beyond the much more reasonable PSP-3000 model.

The new PSP Go might be too expensive at $249 USD.

[Source: Joystiq]