Since it was announced at E3, the Sony PSP Go and its pricing in particular has created a lot of buzz on the web. If you missed it, PSP Go is not so different from the PSP, except that it basically fixes the portability problem and relies on digital files downloads for game acquisition.
As for the pricing, it’s never low enough obviously, but at least we can take a look at Sony’s possible motives for a $250 price. Many would throw a comment like “it’s dumb not to price it like the DS”. Maybe it is, or maybe doing so would be financial suicide, which is indeed, dumb too.
Sony is currently dipping a toe to see how much the market can bear. The PSP Go is more expensive to make than a DS to make, but despite this, it is a better deal to Sony than UMD-equipped PSP. We suspect that the Go’s simpler design (no mechanical drive + smaller) will result in better gross margins, which is what Sony needs desperately right now. Sony’s end goal is to make money (duh) and sheer market share (at any price) is not the answer to everything, although we don’t dispute the benefits of being the market share leader. Today, it is about improving the gross margins so that Sony can survive and fight tomorrow. When MGS Peace Walker and Gran Turismo for PSP hit, we’ll see how much console they’ll sell. That’s probably Sony’s plan.
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