Industry analyst Michael Pachter has apologized for accusing Sony of ripping off consumers by charging $249 for the upcoming PSP Go, calling it a “poor choice of words” and saying he doesn’t believe the company is doing anything evil with its pricing strategy.
Pachter had some harsh words for Sony in the Bonus Round last week, saying the $249 price point for the new PSP Go was “too much, period.” He pointed out that the Go has a lower manufacturing cost than the current (and profitable) PSP-3000 model and yet will retail for $80 more, and that while Sony is positioning it against the iPod Touch, it’s hindered by the lack of iTunes or the App Store. “They’re ripping off the consumer,” he said.
But what he meant was something a little different. “I sincerely regret the choice of words in my response to Geoff Keighley’s question in last week’s Bonus Round, where I said that Sony is ‘ripping off’ the consumer by pricing the PSP Go at $249.99,” he said in comments to IndustryGamer. “I made a poor choice of words, and I do NOT think that Sony is doing anything nefarious in choosing their pricing strategy. The company has the right to price its products at a point that they think is competitive, and has no obligation to sell products at lower than a competitive price.”
“They have been subsidizing purchases of the PS3 since launch, to the tune of 22 million sold at a loss of $100 or more apiece (on average), so if they are able to make a profit on the PSP Go, more power to them,” he continued. “They are pricing at a point that positions the PSP Go competitively with the iPod Touch, and the PSP Go arguably has much more value than the Apple product. Notwithstanding my view that the price point is too high to generate more than a few million units sold, I really think my comment was unfair.”
What I find most interesting about this is that for once, most gamers seemed to agree with Pachter’s comments. Sony has the right to price its products however it likes but if the company is serious about making inroads into the handheld market then it needs a more competitive price point. His choice of words could have been better, yes, but I think the underlying sentiment was right on the money.