PSP Not A Sellout Hit

MilenCent writes "We're starting to see our first mainstream media reports on the PSP's (lack of) sales performance, from the Seattle Times: "But while Sony is touting the rollout as a success -- and many retailers did sell their entire stock -- the event might not have been the complete blockbuster that was expected." In summary, the article says that more systems were sold than not, that dedicated gaming stores were more likely to sell out than department stores like Target, and that the biggest reason gamers didn't pick it up is likely its price -- which wasn't helped by some retailers' sale condition that customers also purchase games, which could raise the price to nearly $350. Will demand pick up once the unit is out there and seen by people, or will it take a price cut before the system sells satisfactorily?"

Comments

Not surprising...

[ivan256]

They bundles a ~$180 piece of equipment with a crappy carying case and a tiny memory stick and added $70 to the price. There's at least 30 of them in the case at the local WalMart here, but most people I know are waiting for the non "Value" Pack version to come out.

Re:Not surprising...

[LordNimon]

I agree. Amazon.com's game bundle, for instance, comes with five games: Wipeout Pure, Twisted Metal, NBA, Ape Escape, and World Soccer Tour. This is the only way you can buy a PSP from Amazon.com. The problem is that I can't imagine any single person wanting all five of those games.

Re:Not surprising...

[ivan256]

The WalMart in Hudson MA has a full case of PSPs and there's a big sign on the window: "Due to extreme demand, PSP sales are limited to one per customer."

The guy I talked to said they've only sold 10-12 so far, out of their initial shipment.

Re:Not surprising...

[justforaday]

I was in my local Target last Friday afternoon and overheard two of the clerks talking. Out of the 100 they received, they had sold 3.

cost?

[negative3]

I think the PSP is very cool, but damn is it expensive! Think about it: $250 for the thing, $50 for a game. That's how much a PS2 costs! I can't see paying prices on par consoles even if it is the greatest handheld gaming platform ever.

Yes, I wanted a PSP

[rocjoe71]

Sure I wanted a PSP, but there was so much hype about the waiting lists and how hard it was going to be to get one leading up to March 24th that I didn't bother looking because I figured I wasn't going to get one if I did.

On the bright side, lower than expected sales usually leads to price cuts so I'm glad the big hype machine failed.

Sell Out

[Botia]

I find it funny that there are complaints about supply when they sell out and worries about systems failing when they don't sell out. How does a gaming system manufacturer win?

$249 is too much

[vasqzr]

I'll save another $50 and buy an Xbox 3 this Christmas.

$249 is a lot of money to some people.

bad ideas for launch

[Tumbleweed]

In order of biggest problem to least, IMO:

1) LCD quality control & dead pixel policy. Horrid.

2) Only selling the 'value' pack. Worst. Idea. EVER. There is already a great selection of third-party add-ons which make the 'value' pack absurd.

3) High price of games. $40-50 per game. Ouch.

4) No demo units in stores. You want to sell a $250 machine? Have demo units.

5) Some stores selling only bundles. Out of the 5 stores I went to opening day, only 1 was doing that in the Seattle area (KB Toys).

6) High price of UMD movies (when they arrive). Silly; they shouldn't try selling UMD movies to the public; this should really be targeted at rental places, especially airport locations.

All these problems aside, most of this can get better, if not much better. Quality control will increase over time, and they're already addressing the dead pixel policy. Hopefully they'll come out with the base edition, sans 'value' soon. $50 in third-party add-ons goes a long way.

The biggest hope I have is that they'll either change their business model, or make a PSP-like PDA platform with a modular bay where the UMD drive is. I live in breathless anticipation.

This is surprising?

[turbopunk]

I completely agree with this. I was surprised when i went around town doing my normal errands the day after release and saw 15 at best buy, 50 at walmart, etc etc etc. I mean, i'm in a pretty hefty geek town.

GameStop and EBGames both told me "Pre-order, or you're not getting one until the 22nd century." If that was the case, then I must still be dreaming.

Truth be told, I think the DS sold out for the reason everyone thought it would. It was different. It came froma company that traditionally gets things right the first time.

The PSP is nothing "new" and comes from a company with a bad track record of first releases. I'm pretty sure most people, myself included, said they'll wait for the bugs to get run out of the first run before investing.

Re:This is surprising?

[Eil]

Not only that, but it seems to be the status quo now where a new system's success is measured not by if it sells out in major outlets, but rather how quickly. Even the very day of the PSP launch, the mass media was producing stories saying that by noon, many retailers still had plenty of systems left? Excuse me? Still?

If these units where anything other than a video game system that sold out, most folks would stop to ask themselves why a particular retail chain didn't do their market demand research before placing such a miniscule order. They'd also ask how a company could spend millions or billions preparing for a product launch and then somehow simply forget a few zeros when they told the manufacturer how many to produce.

I tell you why the PSP didn't sell well. People are sick of the artificial scarcity tactic. The last five video game systems to be released all carried the same spiel and nobody's buying it anymore. They know full well that two or three weeks from now, you'll be able to waltz into any Walmart and grab one out of the dozens in stock.

Re:Games

[tepp]

I'm a PS fan, but these are not the games I'd buy.

I'm a female gamer, and I prefer games with stories, games with plots and twists. I loath straight out racing games and "sports" games. I don't like fighter games either - too much boring button mashing. I like games that make me think, games that rely on figuring out solutions rather than memorizing "super combos" or memorizing a track.

Plus, the price of the system is a bit high for merely a portable system!

That being said, I would've bought it had it only had Katamari Damacy on it! The ability to roll stuff up while on the bus, or at work.... mmmm. Rolling.

Other PS games I would've paid for - and bought it for - any Final Fantasy game, including FF strategies and other older ones... any Silent Hill game... any Grand Theft Auto, or Prince of Persia (1 or 2).

A season for all things

[superultra]

A main reason why I think the PSP hasn't done as well as expected is that it's the wrong timing. Summer is _the_ season for portable game machines, because parents buy them for kids when they go on trips. At the EB where I worked, we would have to put the gameboy section at the front of the store come every May.

But the PSP doesn't really hit that crowd. The target audience, 18-40 males, doesn't have a summer off (or is driving when they do). The PSP might perform better come winter and Christmas, particularly if they drop the price $50.

Maybe the market they target doesn't have the time

[eamonman]

I like Sony. Have for years. I even got to see and play with an import one back in November. However, I don't have the time for the PSP. Sony talks about opportunity gaming, where you play something because you have time in between things to stop and play with {X}.

But you know what? I don't have that kind of time. I can't play my PSP when I'm stuck in traffic (I tried to with my new cell phone, but that was rather risky). I can't play my PSP at work (well, I could try). I can't play my PSP playing basketball, or golf or whatever. And I suspect that other 18-39 year olds that have jobs may not either. And by putting it at a price point so high that you really have to have a lot of 'opportunity' times to play. Unless they market this to kids, but somehow those commercials don't look kiddy to me.

I do have time when I get home however. But then, why would I pay money to look at a small little screen when I can just watch DVD's on any of my TVs. Or play my PS2.

They should really try to market to kids. Hell, when you have no job and people are driving you to places you don't really want to go to, there's opportunity-time galore.

Problem of perception

[igrp]

You raise some very interesting points.

3) High price of games. $40-50 per game. Ouch.
Personally, I think that is going to be Sony's biggest problem down the road.

If you think about, $40-50 isn't really that much money for a game you'll get countless hours of enjoyment out of. Well, at least if you're a working adult, it isn't. That's especially true if you compare it to a night out a the movies or a decent meal for two. Both of those will cost you around, or upwards of $50. That is not how it works in the real world though.

Few people think rationally about a product's price tag. And people perceive $50 to be a lot of money (and rightfully so). Dropping fifty bucks on an item you need is okay, wasting fifty bucks on an item you know you or somebody else will enjoy (say a Christmas present or - to stay on topic - even a video game that allows you and your buddies to kick back, watch a football game and play before and after) - sure. Selling the idea of spending $50 on an item you're only using to amuse yourself for a short period of time is a whole lot harder because it doesn't quite feel right.

If games were, say, $30 a piece, it would feel more like picking up a CD on your way home after work. Something most people wouldn't feel guilty about at all - after all, you're rewarding yourself and it's "just $15". And whilst $30 is certainly more than most people would pay for a CD, it doesn't feel wrong for a portable video game because most average middle-class Americans still perceive $30 is "inexpensive", whereas $50 is still an investment of sorts (think about it: don't think twice before you hand someone a $50 bill whereas handing someone a $10 just feels natural).

Add financial constraints to the mix ("gotta pay the bills"), and $50 just doesn't like your getting your money's worth. Sure, a lot of hardcore gamers won't mind plucking down $50 for a game. But that's not necessarily Sony's target audience -- if they want to be profitable, they need to target a broader demographic. And a $50 a pop, people will think twice about buying your product. These days, very few people make $50 impulse buy decisions...

Re:Problem of perception

[petsounds]

If you think about, $40-50 isn't really that much money for a game you'll get countless hours of enjoyment out of.

Well that's exactly where the problem lies. You see, in general the publishers and game studios aren't being *honest* with customers about the quality of their respective titles. If they were, there would be much more granularity in the pricing structure of games. But as it is, they market every game as if it's a AAA title (even though internally they know very well which ones suck and which are mediocre), and so they have a fixed price point for every game. This leads to a situation where consumers have to wade through endless amounts of marketing BS to find the truth about a game. If they were willing to sell a mediocre console game at $25, people would be much more willing to buy it. But they aren't willing to be honest. ESPN was honest with their sports games. And then EA bought them out to shut them up.

To speak more to your point though, I believe publishers vastly underestimate how complicated consumers are in their game purchase decisions. I think for a lot of us, the "worth" of a game is determined by a mix of longevity, fun factor, and style. If this is some action game that we can blow through in 8 hours, do not expect us to throw down $50 for it. I have to give Namco props here for releasing Katamari Damarcy for $20. I think this exactly proves my point. If you nail the price point correctly, people will buy it in droves, whereas it might otherwise languish on the shelves and in three years be talked about by game journalists as a cult classic that got overlooked.

I think in the end a flexible pricing structure would serve to benefit both the publishers and the consumers. Lying to your customer base by saying every game is amazing and worth $50 only serves to piss people off, and after so much marketing shrill (and don't think I'm not also pointing the finger at you for this, IGN et al), people start to just tune you out completely. I think that is exactly what is happening with the PSP. Sony got greedy and thought people would buy a portable system as if it was a third Playstation console. But Nintendo has already set a different price expectation for consumers, and that will be very difficult to overcome.

So to borrow a note from Jon Stewart: publishers, stop hurting the game industry. Just stop. We know that next-gen games cost more to produce, but charging more money isn't necessarily the answer.

Re:For $350...

[Palshife]

I could decide against buying a car because I could buy a banana and have plenty left over.