With slow launch sales in Japan, Sony could be facing some trouble with the PSPgo. Here’s how things could improve.
The latest addition to the PlayStation Portable family, the PSPgo, hit North American retailers in October with Japanese markets following this week. While reports of the domestic release have been varied and official sales statistics have yet to be released, news out of Japan this week further compound suspicions that the handheld is off to a slow start. According to PSPgo launch sales in Japan, retailers were only able to move 28,275 units, a relatively mediocre start for a country where Sony is king. Given the PSPgo’s weak start in its native country, could Sony’s rough start in Japan be the start of a less-than-optimal lifecycle for their all-digital handheld? We’ll have to wait and see, but if things do start to go south for the PSPgo, Sony may be able to save the system from the flames with a few strategic changes.
With the pricing locked in at either the same as or higher than in-store retailers and no way to trade the titles in later, there is little incentive for gamers to want to go the digital route. Digital games on the PSN would be much more appealing if they had a price differential over hardcopy games, even a marginal one. If Sony were to knock off 5 or 10-percent off the MSRP of digitally distributed games to compensate for the lack of physical product in the user’s hand, gamers would likely warm up to the idea a lot quicker. Apple achieved incredible success with the iTunes store when they rolled out their $9.99 album pricing while the rest of the music industry was hovering at $14.99 or more for CDs, Sony could do the same for games and move a lot more PSPgo units in the process.
We can get why Sony keeps the pricing of the games on-par with hardcopy retailers, but taking away backward compatibility and trade-in capacity while jacking the MSRP up of the platform by $50? That’s just crazy. In most cases, consumers are willing to pay more in order to get more, but with the PSPgo, the prevailing opinion is that users are paying extra only to lose functionality. Sure, the PSPgo packs some new tech that boosts production costs – Bluetooth, 16GB flash drive, etc. – but neither really provide enough marketable benefit to players to merit charging more than the PSP-3000. The extra $50 may not seem like a lot to most, but it is enough to dissuade consumers who are already pinching pennies due to the state of the economy. If you also consider the perspective of parents shopping for their children, a large chunk of the consumer market, the appeal of $249.99 system as opposed to the $199.99 PSP-3000 or $169.99 Nintendo DSi, is hard to justify.
The market impact of the extra $50 on the MSRP has been recognized by many electronics retailers, and when the system launched in October, many went ahead and cut the price of the PSPgo down to $199.99 anyway. To combat the stickershock, Sony would be wise to follow suit.
Create a UMD Credit System
As one of the biggest problems the PSPgo faces, the simplest way to raise consumer interest in the handheld would be devise a way for them to either trade-in or get PSN credit for their UMDs. Sony announced that they were exploring plans to allow users to transfer their UMD titles directly to their PSPgo without having to repurchase them on the PSN, however, just before the system released announced that the plans were scrapped due to legal complications. While the issues of offering a UMD transfer solution are fairly clear – proving ownership of the UMD, piracy, etc. – it seems like a mail-in or in-store credit system would be a safe alternative.
If Sony were to offer users PSN credit for sending in their old UMDs, even a small percentage of the original value, the appeal of the system would greatly improve. If Sony were to take the concept a step further and partner with a retailer to allow users to do direct, in-store credit PSN credit systems, then that would make the process even easier. Certainly there are complications inherent to such a system, but without any form of credit or trade-in system, the PSPgo will continue to be hard sell for new and existing PSP owners.