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Retail

ShopTo: PSPgo is "almost dead before it has arrived"

Thu 17 Sep 2009 2:49pm GMT / 10:49am EDT / 7:49am PDT
RetailHardware

Retailers refuse to stock console, while others fail to invest marketing effort into release

Sony Computer Entertainment

Sony Computer Entertainment is a Japanese videogame company specialising in a variety of areas in the...

playstation.com

ShopTo has empathised with European retailers boycotting PSPgo, and reckons the format "is almost dead before it has arrived".

Analyst Michael Pachter, on the other hand, thinks they're all being "foolish", and calls the entire situation "ridiculous".

"It's just silly for a retailer to say that they won't sell a big ticket gaming device because they can't sell the games. Consumer electronics stores sell refrigerators and not food, everyone sells iPods and not the music for them; this position is just ridiculous," Michael Pachter, analyst for investor Wedbush Morgan Securities, told Eurogamer.

"I think that it's foolish for a retailer to be selective about what they carry, unless they truly don't believe it will sell well."

A much better course of action, he argued, would be to buy limited stock and then re-order if appropriate. "Refusing to carry them subjects them to the risk that Sony will bypass them for Gran Turismo or Uncharted, in which case they lose," he said.

The ball began rolling when Dutch outlet Nedgame publicly opposed the PSPgo for being too expensive and for not featuring a UMD drive, thus providing no opportunity to sell games. And controlling all sales via PSN gives Sony a "monopoly" on software sales, argued the shop.

Media Markt, a German retail chain that spans Europe, took up a similar position, with Spanish and Italian (and no doubt other regions) outlets prohibited from selling the device.

ShopTo will not follow suit, but agrees with the sentiment. "We do have it listed on the site, but we are not concentrating any big marketing behind it," boss Igor Cipolletta told Eurogamer.

"Sony has decided to cut publishers and retailers for the software of the PSPgo and deal direct with developers, giving them a 70 per cent margin for any items sold on Sony PSN. I believe if they had lowered that to 50 or 60 per cent, and given the opportunity to online retailers, it would have enjoyed greater success and retailers would attempt to promote the console to the market."

Cipolletta, however, feels the damage may have already been done, and the format - which launches here on 1st October for GBP 224.99 (EUR 249.99) - will be a flop.

"I have the feeling that as a format it is almost dead before it has arrived, and it relies far too heavily on a customer base that is prepared to pay more for download content than the equivalent disc based product, and I suspect this market will soon dry up based on the technical limitations of the hardware," Cipolletta shared.

But, Pachter added, while retailers wield "some power" now, their foot-stamping won't be entertained for long.

"As far as the argument that 'it's about time' retailers received their comeuppance: I think that will occur soon enough anyway, as the large hard drives in the PS3 and 360 (and the larger ones coming) will encourage a greater number of downloads in the future," he offered.

"Retailers have to face the fact that games will be increasingly offered over Xbox Live and PlayStation Network, and cope with the outcome. "To draw a line in the sand," Pachter said, "is wrong."

Sony has currently not responded comment on the matter.

7 Comments

I tell you what: Retailers found the ELDORADO...Second Hand Games! (same as piracy IMP)..that's why they do not want to stock PSP go!

Stop second hand games...only retailer earns on them, not publisher not us developers.

Posted:5 years ago

#1

Chris Rowe Producer, Capcom Vancouver

7 0 0.0
I'm not really sure what went wrong at Sony with this generation of consoles, but they don't seem to of learnt anything from the PS3's chequered history and continue to appear out of touch with what people want or are willing to buy.

£225 for the PSP Go seems utterly ridiculous when you can get a PS3 Slim or a 250GB Xbox 360 Elite with Forza for £25 more. If you factor in the reportedly poor battery life, the uncomfortably positioned analogue stick, their flagship launch title 'Gran Turismo' reviewing in the 70's at Metacritic and the exclusion of wireless multiplayer and DLC for the 'mini' games and it really doesn’t look that hot a prospect for both retailers and consumers.

Posted:5 years ago

#2

robert troughton UK General Manager, Epic Games

222 96 0.4
I've no idea about whether or not the PSP Go is actually a good product - but I would like to see something LIKE this succeed at some point soon. Retailers don't care about the developers and publishers - the second hand market has caused unimaginable problems for the industry - so why should developers and publishers care about retailers?

If every single retailer in the UK refused to stock PSP Go, people would just buy it online. It would cause not just a software revolution but a hardware one, too.

Screw the retailers, I say - let's see more of the profits lining the pockets of the developers instead.

Posted:5 years ago

#3
Apart from the ridiculous price of PSPGo (maybe they are learning to price for profit, rather than sales) - it comes down to margins. If the retail price has a good margin baked in for the retailer - there is no reason a retailer would not stock it.
(in Australia, PSPGo has been priced at $450 - a DS is $200, DSi/PSP $300, Wii $350 & PS3 $500 - its at least $100 too much)

However, most handheld/console hardware typically has little, if any margin - meaning retailers sell hardware for no profit, and sell the games for the profit.

I do see the PSPGo really struggling - its essentially a crippled PSP, that costs more - and doesn't play all the cheap UMD titles available at retail. More a product for the existing PSP fan/owner, than anything else.

Posted:5 years ago

#4
Concerning the psp go's price, i am wondering how many potential customers will prefer to save themselves 100 gbp and invest in an apple ipod touch 8gb model instead?

Posted:5 years ago

#5

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,271 2,440 1.1
Way to go, Pachter. Of all the public analysts it is fitting that you would make such a blatantly incomparable analogy.

Console hardware profit margins are minimal for retailers and I doubt the profit margins for refrigerators are of equal proportions.


Most retailers aren't too thrilled to reduce their shelf space for profit enabling products to make room for a product that yields them such minute profits in return.

Posted:5 years ago

#6

Tameem Antoniades Creative Director & Co-founder, Ninja Theory Ltd

196 164 0.8
Whether PSPGo is going to be successful or not is not the story. No platform holder is going to trust the retail channel from this point onwards. I expect things will progress towards the direct-download model a lot more urgently.

Posted:5 years ago

#7

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