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Analyst proclaims Sony PSP Go! a “rip-off”

Posted by: Dan at 6/12/2009 2:14 PM
Michael Pachter, noted video game analyst with securities firm Wedbush Morgan, has stated in an interview with Geoff Keighley (during GameTrailers.com Bonus Round Episode 30 starting around the 3:50 mark) that Sony is basically “ripping off” its customers by charging an $80 premium for the PSP Go! vs the current PSP-3000. His reasoning is that 16GB of flash memory is cheaper than the entire optical assembly required for the ill-conceived UMD, meaning it is cheaper to produce the Go! and that the price will quickly come down after the first couple million are sold. Unfortunately, after his statements on Bonus Round, Pachter backpedaled faster than John during a game of Team Fortress with this apology during an interview with IndustryGamers.com:

“As long as you're giving me a forum, may I please beg your indulgence for a statement? 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. I made a poor choice of words, and I do NOT think that Sony is doing anything nefarious in choosing their pricing strategy….” (See the entire apology after the jump)

While I think that Pachter could have chosen his words a little more carefully during the interview with GameTrailers (although Keighley actually said “ripping them off” first), he was actually dead on with the accusation that the price point for the PSP Go! is way too high. It’s unfortunate that he felt compelled (for whatever reason) to fall on his sword instead of standing up for what he truly believes.

So what is everyone’s opinion on the PSP Go! price tag? Is $249 too much?


Michael Pachter's Full Apology from IndustryGamers.com:

“As long as you're giving me a forum, may I please beg your indulgence for a statement? 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. 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. 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, and would appreciate your allowing me to clear the air on IndustryGamers.com.”