Last we heard, I thought Sony Europe's president was saying the PSP was likely gonna be in the $400-450 ballbark range. Now this analyst is suggesting $200-400?
Here's the worrysome part.
Quote
Sony expects to make money on the PSP, though it may take a loss when the console first goes on sale, Sony's Furusawa said.
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Sony lost money on PlayStation and PlayStation 2 immediately after the consoles went on sale, Furusawa said. Both consoles are now profitable.
The PlayStation and PS2 did sell at a noteworthy loss at the start. As costs went down, they eventually started to turn a profit (although the PS2 is notoriously overpriced right now). Was the later profit enough to offset the initial losses in the final tally? Maybe. Maybe that's what Sony's shooting for here.
A $450 "GameBoy killer" is doomed to fail horribly. But a $200 one?
But then again, taking a $200-250 loss per-unit on the hardware is one heckuva big risk. Especially since Sony's been saying they plan to have 10 million PSPs on store shelves (or preferably people's hands) by the end of their first year. Do the math on that one yourself.
And not only is that a much bigger risk than any $50 loss they've tried to maintain on their earlier consoles, but their other consoles have had game-royalty fees coming in for them. Just about everyone knows that royalty rates on handhelds are pretty slim (to try and keep the game prices below those of their superior home-console cousins). And the average handheld owner (read: GameBoy owner) in America only owns about 2.5 games, compared to 8 games for a PS2 owner.
Don't get me wrong. I still expect a horrible flaming death from the PSP (at which point I'll probably miss it, and want one). But that suggestion of "$200", combined with those quotes from an SCE spokeswoman, lead me to believe that if Sony lets it all hang out and goes for broke on this one, they will have a pretty decent chance for success. Lets call it the "Can they run through the deadly-volcano-path fast enough to survive, if they take their pants and shoes off first?" question.
Of course, their better bet for success is if they abandon the "GameBoy killer" idea and carve out their own niche somewhere (maybe eating a small PDA market or two). Like, if Nokia goes out and makes a cell-phone called an "N-Gage 2". It might be a success, but it won't have "won where the N-Gage lost", because it fought a completely different battle.