Analyst Warns Sony to Lower PSVita Price

One analyst says that Sony is under pressure to reduce the price of its upcoming PlayStation Vita or risk failure.

Friday Tokyo-based analyst at Ace Securities Co. Hideki Yasuda said that gamers are increasingly anticipating Sony to lower the price of the upcoming PlayStation Vita, especially once Nintendo slashes the price of its 3DS handheld later this month. Sony is reportedly "under major pressure" to cut the price or risk a major failure.

But as reported on Thursday, Sony doesn't see any need to cut the price despite Nintendo's drastic move to regain lost revenue.

"We packed so much into the device and made it very affordable," Sony Corp. Executive Vice President Kazuo Hirai told reporters at Sony's Tokyo headquarters. "There is no need to lower the price just because somebody else that happens to be in the video game business decided that they were going to lower their price."

Sony will probably never lower the Vita price until long after it's on the market. Take a look at Apple's iPod Touch as an example. Without knowing what the next-gen version will (officially) bring to the table come September, the current 8 GB model retails for $229 USD. It doesn't sport any buttons or analog sticks, nor does it have the supposed graphical prowess of the PlayStation Vita.

Yet this thin little machine, along with its iPhone cousin, is stealing market share from both Sony and Nintendo. If gamers are willing to shell out $229 for a device that only offers little tidbits of gaming, surely gamers will dump $249 into a PlayStation 3 that can fit into your pocket, touch-screen intact. This may be part of Sony's thinking, and perhaps what led Nintendo to price its 3DS unit at $249.99 as well.

Yet the economy is still struggling: consumers are fighting to establish credit and to pay the fluctuating gas prices. Bloomberg quotes one 36-year-old event planner in Tokyo who owns both the original PSP handheld and the Nintendo DS. "PS Vita’s quite expensive," he said. "I don’t think I’ll be one of those people rushing to buy it on the release date."

This very attitude may have been what caused Nintendo's 3DS lackluster sales after the initial launch: the hardcore "must have it" gamers didn't have a problem, but the general consumer didn't see the need to pay $249.99 on "an enhanced DSi with 3D functionality." It also doesn't have access to a music service, and it doesn't allow consumers to purchase and download movies and TV shows. There's no way of communicating with other parties via Skype or some other instant messaging app.

"The environment for portable game players has become more difficult because of smartphones," said Koki Shiraishi, an analyst at Daiwa Securities Group Inc. According to Bloomberg, Shiraishi estimates shipments of the PS Vita will be about half of the PlayStation Portable sold during the product’s first two years. Harding-Rolls, a London-based IHS analyst, says the company may sell 36 million PlayStation Vitas by 2015 – the PSP sold 48 million units in the same timeframe.

Thursday Sony said the new Q1 2012 launch window for the PlayStation Vita was to allow for a strong software portfolio on day one. There's a good chance Sony waited to see how the 3DS performed with its lackluster launch portfolio, and decided to alter its plans in order to avoid the same debut.

Sony may also be waiting to see what Apple has to offer come September when the company reportedly launches the iPhone 5 and 3G-capable iPod Touch.