Andrew House in the house: why the PSP Go costs that much, why PS3 price has no conflict with recession woes

Posted Jun 26, 2009 at 6:28PM by Mabie A. Listed in: Interviews, News, PSP Go Tags: Europe, MCV, SCEE, Sony, UK

New SCEE president Andrew House has taken some time out to sit with MCV UK and talk about his experiences as the new big man of the company. Central to this interview would be his explanation on why the PSP Go holds the price tag that it has, and where exactly is it based from.

This should clarify all those speculations as to why Sony went down this route, and hopefully will dispell any more impression that they're ripping people off.

According to House, the US$ 250 tag wasn't put there to make up for the lost UMD sales the retail stores will have since the handheld is going the digital route. Nor is it there to make up for research and development costs. Simply put, "those aren't the factors," he said.

When you introduce a new piece of hardware you have the opportunity to say there is a certain premium that is associated with it, and we took that into account.

As with all hardware launches you look at the business model, the cost structure, and the necessarily level of profitability, and you use that to set the wholesale price. Much as we do with any other hardware.

And speaking of "any other hardware", the PS3, which has yet to receive a price cut, is also being dubbed as overpriced by some sectors. In response to that:

The strategy there is to say that, not to harp on about it, the device has a 10 year lifecycle and that there are issues of cost and profitability. We will make that move on price when all those factors are aligned.

Would people buy more when they are cheaper? Of course. But on the other hand there is an inherent marketing challenge. In Europe I think people do see the value of the machine, the Blu-ray and network services and take that all into consideration instead of just focusing on price. But we will look at price and will address it when the time is right.

To this, some people will predictably retort: "But isn't this the perfect time for lower prices? You know, cos we're in recession."

Clearly the industry as a whole has seen some impact from the recession. I think everybody would agree we've held up tremendously well in the circumstances. On balance, we are still a good value for money entertainment form, especially in terms of dollars per hour spent.

So I don't think there is a conflict - you have to be clearly sensitive to consumers' perceptions right now. I am something of an optimist; I think there will be a turnaround within this calendar year.

New SCEE president Andrew House: Wii owners will "upgrade" to PS3

Via MCV UK

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Comments

# lol... — Freya 2009-06-26 14:37

Getting a 360 or wii is STILL way cheaper than getting a GO.

ill be happy with my old ps3 as long as they wont discontinue it.

# or.. — VashioKun 2009-06-26 14:55

Getting a normal psp+3 $30 8gb memory stick duos > $250 psp go.

Yeah they did think about the factors real good.. lol

# . — xavis75211 2009-06-26 15:11

i dont trust them, "wasn't put there to make up for the lost UMD sales" i wouldent belive them, sony seems like the type of company that will do that, there geting more greedy then before and there just trying to do thing that will make them more money

# Bull $#!+ — 0m3GA ARS3NAL 2009-06-26 16:13

I think Sony is just bull *****ting money grubbing stiffs... but I still love 'em, Sony all the way!

# opps — Freya 2009-06-26 17:14

I meant PSP**

# Must Market better... — ps3juggalo 2009-06-26 17:30

Of course we'd love if a PS3 was $50, but is it overpriced or Under-marketed? ?

Apple iPhone 3Gs = advertise it's "cool" & 'there's an App for just about everything". So if Apple can sell a $299 CELL PHONE in a recession why can't Sony sell a $399 Awesome Game system?

You know the "I'm a Mac Vs I'm a PC" ads, wouldn't it be funny to see Sony rip that off....hmm imagine...

I'm a Xbox, I'm a PS3...Xbox says hmm you cost more...PS3 raises eyebrow says "Do I? Do I really?..." then you see the PS3 using wi-fi, then the Xbox dude says I can too but takes a $100 out of his pocket, then PS3 does online gaming, Xbox says me too- then takes more money out....then PS3 watches a BluRay Xbox takes Wad of cash & buys a player...then the camera pans back to see the sleek PS3 doing it all, then you see the Xbox, with wifibox, & bluray player box stacked on top of it...Ad closes with God of War 3, Eye Pet, & Uncharted 2 ...ONLY on Playstation 3--- Booya!

# as usual — genesiscopy 2009-06-26 18:04

sony and their bad marketing policy... on the other hand, the sunk cost (loss due to UMD and RnD) needed to be considered when considering the pricing scheme...

# premium? — lunas 2009-06-26 18:05

No sony passed the premium and went strait for rediculous...

Bottom line is it is a broken psp with a 16 gig memory card

# Hah — Acteon 2009-06-26 20:30

I don't see 250 dollars as a rip off, but I DO see 230 POUNDS as a total piss-take. It's not about "premium" (the lamest possible corporate excuse for ripping people off) it's about charging a fortune for a new form factor, controlling the market (no imports) and taking those with the money for everything they've got.

I see the value in the PS3, PS2 and the PSP, but if Sony think the Go! follows the same pattern, they're seriously deluded. Pachter was spot on and I'm just sorry the Sony machine forced him into a retraction.

I like Sony products, but I hate the corporation behind it - you only have to look at the marketing of their current generation to see how shockingly inept they are.

# Ay ay ay, Mr. Fanboy! — JaXeRiR 2009-06-26 20:43

I have a 360. And I'm completely fine with it.

I do not need WiFi for it, I love Xbox Live (and know a place which sells 13 months of GOLD for 33 euros), and I couldn't really care less about Blu-Ray with my crappy 26'' SDTV.

Oh, and the Halo series, Amped series, Forza Motorsport series, GTA IV + add-ons, Project Gotham Racing series and such games are awesome.

I have nothing against the PS3, I'm sure it's a great console, and it's not that expensive anymore either, it just isn't for me.

It's just that I'm reeealllly tired of this PS3 and Xbox 360 fanboyism.

# Premium lol — Scribe 2009-06-26 22:30

An extra £100 is not a premium it's a rip off.

I prefer the concept of the GO so would be in Sony's target market, but I'll not be buying one until it costs the same as the current PSP. Aside from the 16GB memory (which is cheap these days) all the components are simpler and smaller, it should if anything be cheaper. No hardcore PSP fans that I know of will buy a GO even for their "collection".

You may as well save up for a few more weeks and buy a ps3... which at £300 I do see as good value for money but the least Sony can do is not openly admit that because I think so they're going to keep the price high.

# And — Stealth! 2009-06-26 23:30

from any unbiased point of view, that'd be fanboyish commercial. the whole "Well the 360 costs the same if not more than the PS3 if you add all the accessories on to it" is getting a little old.

Hell, I'm a PS3 owner and have no 360, but might get it in the future when i have extra cash to spend, and I seriously would not use that for a commercial ad. Cause tbh, you don't even need all the accessories for the 360 to play games, yet for the PS3 it comes automatically packaged standard so the users have to pay more to get it.

Don't get me wrong here, I love my PS3 and will continue to play the games it releases, but at the end of the day 360 is still selling better than the PS3 and is cheaper. But I do agree Sony needs a better marketing idea though. I say they should look on the forums and see what the fans, and there's some creative fans out there, would suggest for a marketing idea. It would serve them greatly.

# And what about Europe — Roopa132 2009-06-27 01:19

And what about the $250 and 250€ ? Why do we Europeans have to pay 77€ (that's $108) more than the Americans? Are they out of their *****ing mind?

$250 are 177€ not 250€ -.- Nice how we Europeans get ripped of again... fortunately I still have my old PSP 1000 and I'm not gonna buy the PSPgo

# EDIT — Roopa132 2009-06-27 01:22

Sorry I mistyped: $250 are 173%u20AC that's $102 still to much... we pay converted to USD 352 -.-

# Only on import... — Acteon 2009-06-27 02:35

I'm wondering if the PSP Go! will be region locked. If not then importing might be an option in the EU. Though knowing Sony they'll probably lock the system down pretty tightly.

# Premium! — alias_neo 2009-06-27 06:10

The way I see it, Sony products are premium products, you pay for a premium brand that you know you can trust. I have always bought Sony and have no problems with any of my equipment. They do what they should and exceptionally well. My point is, if Sony products are too expensive for you, you clearly can't afford them, and so shouldn't be buying premium products, live within your means. If you're not happy with that, sure, go out of your way and buy something you can't comfortably afford, but don't go complain about it. I don't know what it is with the people of this planet.

Do you go buy a Lamborghini because you really want one instead of a Porche, and say "Oh, but it should be cheaper so everyone can afford one." No, so neither do you with Sony products amongst others.

Lamborghini don't want just anyone driving their cars, it's a symbol of status. As with the Japs, average just won't do.

You don't have to listen to me though, educate yourself and read up a little on Japanese culture and Italian Perfectionism.

Long story short, f you can afford a PSPGo and want one, buy it, if you can't buy a different PSP or a different console brand.

# Market will bring — Stiletto 2009-06-27 09:35

It is all about what the market will bring REGARDLESS of what it costs to make/develop. IF sony could sell the GO for $500 ... they would. They did with the PSP Phat on it's first run. why? cuz they could cuz nothing on the market came close to it. And as far as the PS3 price tag goes. IT is totally worth it when you take into consideration what is inside that baby. hell xbox 360 was $500 barebone. oh..um.. the PS3 you can also pop out the hard drive and put in the biggest one you can find. I put a 500GB 7200rpm hard drive in mine. Xbox no way. not without hacking it and ripping open their HDD caddy as well. PS3 hard drives aren't locked like the 360's are. that just says a lot about a company in my book !!!

# To JaXeRiR + Stealth! — ps3juggalo 2009-06-27 09:58

I'm not a fanboy- no seriously...I'm not saying that the 360 is crap by any means. My example was purely just to show that Sony isn't marketing it correctly.

I only attempted to show that Apple has marketing genius, because everyone knows spec wise you anybody can get a BEAST of a PC (with way more processor, graphic card, HD, Ram power stat wise) then any Mac.

Apple doesn't try to be the cheapest, it doesn't even try to sell being the most powerful. It sells it's uniqueness + quality. I do admit my comment sounded TOTALLY Fanboyish...but my intentions were just to show if Sony wants to be more expensive it's got to change the marketing.

I don't own a 360 just because it aint my thing, but I do own a Wii too. Plus I've had ps2, ps1, genesis, amiga, c64, atari 2600, imac, iphone....so as you see I'm not for any particular company - I just go with what I like at the time :)

# . — DFresh 2009-06-27 11:55

interesting. i just thought people would rather go for the smarter choice, not the choice that grants them a higher status in society. in some cases you get what you pay for, but that is just not the case here. purposely purchasing the new, inferior model for the soul purpose of status is just...sad. be smarter than that. please.

# .... — Tyrant156 2009-06-27 12:43

Does the 250 just cover the system or will it be like the first PSP and come with extras.

# ... — Tyrant156 2009-06-27 13:04

Well the cell phone market is much larger than the video game market, maybe that's why Apple can get away with selling 300$ phones. I have 3 or 4 friends who own game consoles. I don't have one friend who doesn't own a cell phone.

# QFT — Serosis 2009-06-27 16:56

"Purposely purchasing the new, inferior model for the sole purpose of status is just... sad."

Why do you think people buy iPhones...

alias_neo needs to learn that there is more to life than social status and gadgetry.

# .... — spyder2314 2009-06-27 18:15

Prolly headphones, usb cord, instruction booklet, plastic wrap for instruction booklet, styrofoam, and the box. Oh yeah and the receipt.

# ... — Tyrant156 2009-06-27 19:01

No remote connector, travel sleeve and wrist strap?

# What snobbery — Acteon 2009-06-27 23:29

Jesus, get the point.

Charging extra for something that has no extra value (and is in fact cheaper to produce) just because you want to limit the market to the rich is just wrong.

Using your example, Lamboughini use premium parts and engineering, that's where the cost lies. PSP Go! uses cheaper parts and costs less to manufacture, so the "premium" label has no basis in fact, it's just Sony's way of screwing the rich first.

I can comfortably afford a Go!, but I resent being asked to pay extra for a unit that costs less to make and ties me into one source for my games (which is the most expensive way to buy them, incidentally).

But hey, if you're rich AND stupid, then knock yourself out.

# ps3juggalo — Stealth! 2009-06-27 23:41

I didn't really call you a fanboy, and I know where you was getting at, I was just saying that commercial would be very fanboyish.

I also agreed with the advertising the PS3. But Sony has had alot of trouble with that for the last year and a half. So they definitely need to use the forums and get some of these talented members to give them up marketing ideas. Since there's quite a few.

tyrant156 - The video game industry is actually the same in size if not larger than cellphone industry.

# I hate the redesigning they do on consoles — symbyosis 2009-06-28 01:08

why not make a totally new one? heh. I mean..for the first PSP I had to go get a PSP 2000 for the component out, then I realized, wow I have 2 psps and I barely use them...so why would I get 3000 and then now a go? No sense in that. for first time buyers I guess it wont be such a bad idea, but I would still tell my friends to go get a GoW PSP Bundle IF they can locate it

# duh — truk 2009-06-28 05:56

what else is a company to do? try to not make any money? if you have a problem with that, then you might want to just kill yourself cause that's what a capitalism is about. sorry only choice is death for you.

# Prime Example. — skidz 2009-06-28 06:22

Sony love people like you too! Easily manipulated, narrow minded individuals.

# answer — truk 2009-06-28 08:44

to make money. if you ran a co. you wouldn't blow millions on developing a product and not try to milk that beeyatch dry.

# They are ripping us off. — MuffinlyBliss 2009-06-29 06:26

Sony is ripping us off with this. It doesn't have that much memory, it doesn't have a UMD device, you probably can't get your videos and pictures on it, and ultimately is way overpriced for what it is offering. We're in a recession. No one is going to buy it when the PSP 3000 and the PSP Slim are so much cheaper, give better ways of using it as in Music, Pictures, and Gaming, and you can upgrade the memory.

Sorry Sony. But I think you made an ultimate fail.

# talking about fail.. — truk 2009-06-29 09:24

the psp go does everything a regular psp does except run umd. and it has 16gb of flash memory and you can still upgrade memory. check yourself before you wreck yourself.

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