Legal Niches

Pachter Backs Off PSP Go "Rip Off" Comments... We Don't

By gamepolitics

Wedbush-Morgan analyst Michael Pachter has publicly apologized for saying that Sony was "ripping off the consumer" by setting a $249 price point on the PSP Go. The eminently quotable Pachter made the damning comment about the new handheld last week during an E3 segment of Bonus Round.

Apparently thinking better of his words in the interim, Pachter penned an apology yesterday as he debuted a new monthly column for IndustryGamers:

I sincerely regret the choice of words... 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...

GP: Pachter is a straight shooter and, apology notwithstanding, I believe he was speaking from the heart when he made his original comment. It's not too much of a stretch to imagine that there were a few angry phone calls from Sony HQ to Pachter between the airing of the "rip off" remark and yesterday's mea culpa.

But the fact is, Pachter got it right. Why does the PSP Go, which does away with the UMD drive assembly, cost $80 more than the current PSP-3000? There's no good reason, and gamers knew that even before Pachter spoke out. From the moment it was announced at E3, the PSP Go's $249 price point went over like the proverbial lead balloon.

Nor do I think much of the PS3 justification floated by Pachter in his retraction. Sony is losing money on the PS3, certainly, but that's no excuse to try to make a few million back by skinning consumers with the PSP Go. Personally, I love my PS3. But if Sony overdid the hardware, over-estimated their market and totally screwed up the worldwide launch, that's on them.

Full post as published by GamePolitics.com on June 12, 2009 (boomark / email).