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Analyst Warns Sony to Lower PSVita Price

By - Source: Bloomberg | B 24 comments

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.

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  • 16 Hide
    redhotbd , August 5, 2011 5:57 PM
    I don't really think it's a good idea to compare gaming on a smartphone to gaming on a full-fledged handheld gaming device. For me, gaming apps on my phone are more of a way to pass time than to actually have fun. I buy a phone because it's a phone. If I buy a Vita, it'll be because it has a good price and the fact that I'll be able to have fun with it.

    iPhone vs. Vita = Apples vs. Oranges ??????
Other Comments
  • 16 Hide
    redhotbd , August 5, 2011 5:57 PM
    I don't really think it's a good idea to compare gaming on a smartphone to gaming on a full-fledged handheld gaming device. For me, gaming apps on my phone are more of a way to pass time than to actually have fun. I buy a phone because it's a phone. If I buy a Vita, it'll be because it has a good price and the fact that I'll be able to have fun with it.

    iPhone vs. Vita = Apples vs. Oranges ??????
  • 1 Hide
    gm0n3y , August 5, 2011 6:02 PM
    While the Vita does sound pretty good, I'm not sure why they think that people are going to want to pay to watch TV and movies on the device. I'm sure a few will use it on the bus/train/plane, but for the most part I can't really see this as much of a feature.
  • 1 Hide
    Anonymous , August 5, 2011 6:19 PM
    I wont be buying one. I was HUGELY DISSAPOINTED by the lack of software available for the PSP. If the vita is going to be anything like the psp was, they will have one less customer. And besides. I own a ps3 and psp, most of the games on vita are available on ps3. why would i want to pay $250 for the same games that are just portable. I wont be buying ethier the 3DS or Vita. Save your money for the next playstation console
  • 0 Hide
    warcen , August 5, 2011 6:20 PM
    i agree wy watch movies on it when you can play games. and i got a iphone3g ipod4 and a ipad2. nowone of this devices can be compared to the ps vita. the main differences is that the vita had buttons. the psp and a iphone got almost same graphic but psp got buttons so its funnier to play on and the vita got 2 analog sticks and ps3 like graphics. and you can play ps3 games on it when you conect it to the ps3 so you could sit on the bathroom and play uncharted 3.
  • 0 Hide
    warcen , August 5, 2011 6:24 PM
    and for those who wont buy it because you got a ps3 remember its not same games. some few are but you got 80% of the games that only can be played on the vita. and don forget that the ps vita os portable. and the vita wont have lack of software just watch on the videos of it and its stats
  • -2 Hide
    slabbo , August 5, 2011 6:24 PM
    "We packed so much into the device and made it very affordable"

    so what's in it that I can't get from a different device (iOS, Android, Nintendo)?
  • 1 Hide
    Anonymous , August 5, 2011 6:36 PM
    @redhotbd well he was mentioning the ipod touch
  • -2 Hide
    redhotbd , August 5, 2011 6:43 PM
    hubba@redhotbd well he was mentioning the ipod touch

    Yeah, but he also stated that quote "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"

    Like I said, unless a PS Vita is going to magically become a smartphone, it's main purpose is gaming or listening to music. Just because I bought an iPhone for $229 doesn't mean that I'll buy a handheld console plus whatever the games are priced at.

    It's like comparing playing Angry Birds to playing Shadow of the Colossus... I'm laughing just thinking about it.
  • 1 Hide
    redhotbd , August 5, 2011 7:21 PM
    @Hubba i didn't realize your point, but now i do

    Just to clarify... I'm NOT an apple fanboy by any means...
    If people want to spend $229 on an iPod Touch, then let them. But please think twice before you label them as "gamers" just because they enjoy a quick session of Pocket God.

    The fact that Apple took market shares from both Sony and Nintendo could just be the Apple hordes speaking. Besides, do you really think that Apple fans buy iPod Touches to play nothing but games on them??? If I had to guess, I would say that 85-90% of the space on their iPods are occupied by music...
  • -4 Hide
    Anonymous , August 5, 2011 7:49 PM
    they better not, Sony needs to taste some of Nintendo's failure
  • 1 Hide
    techguychris , August 5, 2011 7:56 PM
    I think the media is trying to brainwash everyone to thinking smartphones do everything PERFECT when in reality they dont. Most people use a smartphone to just text, call,browse the internet, email, and last but not least, just for the status of having a smartphone.

    A lot of people dont use very many apps.... The only good smartphone game according to the media is Angry birds.

    If anyone says many people are moving to having one device do everything, why are we buying tablets on top of laptops??

    TechGuyChris
  • -1 Hide
    dalethepcman , August 5, 2011 7:57 PM
    Quote:
    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.


    Quote:
    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


    The difference is that an ipod can play games, skype video call, open office documents and pdf's, remote desktop into a real computer, browse the web (except flash), the ps vita plays games.

    Herein lies the problem with Sony's logic:

    The ratio of gamers to everyone else is very small, they made a device only for gamers, and most of these gamers will have an iphone android ipod already.

    The developers know there are a hundred million more current smartphone users than there will ever be ds/vita users.

    Smartphone games cost from 0$ to 10$, ds/vita games will be in the $30+ range. If Sony cannot compete with a lower startup cost, then where is the value of their system?
  • 0 Hide
    itchyisvegeta , August 5, 2011 10:11 PM
    More like Apples vs Carrots.

    Anyways, show off some games that I want to play on the machine. Also confirm the rumor that the system runs Android.

    Do this, and I will pay whatever for it.
  • 1 Hide
    Anonymous , August 5, 2011 10:54 PM
    Most phone/tablet games are crap. Consumers don't buy the device initially because of the games, if they did I feel really bad on them wasting money on an expensive hardware in order to purchase many junk games. Not unless you a millionaire with money to spend, or just exposing your child to those games because they're cheap. Almost everyone has a smartphone nowadays, but it's almost like a must-have. I think it's that and don't overlook the trend thing why most buy phones/tablets. These to me are reasons I believe sales are high, not necessarily in this case of gaming. I also believe smartphones are here to stay but not tablets due to netbooks and laptops still essential. Well, gamers know where they stand cheers to real gaming and good luck to Sony.
  • 0 Hide
    verbalizer , August 5, 2011 11:54 PM
    I forgot Sony was still around... :D 
  • 0 Hide
    kinggraves , August 6, 2011 12:47 AM
    A lot of people here seem misinformed, the PSVita may come with Android and there is supposed to be a 3G model, so there's a lot of possible functions other than a dedicated game system here. Unfortunately, unless it completely dual boots, it would be unlikely they'd put a normal copy of Android on the system. An Android installation that interacts with games is an easy back door for piracy. If you thought it was easy to pirate a DS with flash carts, imagine how easy it will be when you can override security measures by rooting and downloading an APK,

    With that being said, I'm so sick of "analysts". He likely doesn't know what the system can do, yet he's able to predict it's market value? If it can function just as well as any other Android device, with the added benefit of real controls and PSP2 quality games, the price is justified. I think what we'll see though is a "custom" build that's locked out of the normal google market and forced to use the Sony market for apps. Even this is risky for Sony, since many custom markets have been overridden by custom roms allowing the normal market. Sony is sailing dangerous seas if Android is even touching their game OS.
  • 1 Hide
    phillyphries , August 6, 2011 5:34 AM
    I hope Kazuo Hirai can fix Sony's problems. Sony is a very important corporation and to lose the TV business would mean people that manufacture the parts in Japan for Sony Bravia will be out of jobs which is not a good thing. I really like that Sony's products are high quality because they are made in-house. And the release of the Vita next near will hopefully be good too.
  • 1 Hide
    razor512 , August 6, 2011 10:37 PM
    the reason why people will pay that money for a ipod touch or iphone even though it has pretty bad graphics hardware, is because the versatility of the device.

    With the iphone and ipod touch, you can surf the web, use skype, subscribe to podcast, have access to thousands of free apps, multitask, play basic games, and much more.

    While devices like the nintendo dsi and the new portable sony gaming devices, you have far less versatility, you can only run overpriced DRM loaded games, and if you are lucky, have a poorly designed slow browser that only supports the web standards from 1000BC.

    These companies hate apps being developed for their gaming devices to a point where they restrict everything. then they want to justify a $250 price tag. for that price you can get a used netbook and a used ipod touch.
  • 1 Hide
    razor512 , August 6, 2011 10:40 PM
    Most console companies make money off of game sales. If they want a truly popular portable console, sell the console at a 0% profit margin. If people see a decent console and it only cost them around $50-80, then they will quickly buy the consoles and you will make money off of them for years to come as they buy games for the console.

    If you overcharge for the console then no one will buy it and you wont make as much money off of game sales
  • 0 Hide
    redgarl , August 7, 2011 1:49 AM
    3DS, soon to be 170$
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