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Analysts: Sony facing 'major pressure' to reduce PS Vita price

Despite Sony's insistence it will not lower the retail cost of the PS Vita to counter Nintendo's recent 3DS price cut announcement, some industry analysts are saying the electronics giant would do well to reconsider or possibly face a disastrous launch.

“Gamers are increasingly anticipating Sony to lower prices, especially after the 3DS cut,” said Hideki Yasuda, a Tokyo-based analyst at Ace Securities Co. in an interview with Bloomberg, adding, “Sony is under major pressure to cut the price of the Vita or risk a major failure.”

Above: Nintendo advertises the 3DS's new price in Japan

Late last month, Nintendo announced it would be slashing the price of the 3DS by 33% worldwide come August 12th, leading many to assume Sony would do the same for its upcoming handheld. Kazou Hirai, president of Sony’s Consumer and Products Services group, denied the idea, saying, “We have a very good product at a very affordable price...There’s no need to lower the price just because somebody else that happens to be in the video game industry decided they were going to.”

Despite Hirai's positive outlook, there are others beside Yasuda who aren't so sure of Sony's future. Koki Shiraishi, an analyst at Daiwa Securities Group Inc. predicts the PS Vita will sell only half that of the original PlayStation Portable in its first two years, explaining the evolution of smartphone tech has made it much more difficult for handheld systems to find success. Further, Kazuharu Miura, an analyst at SMBC Nikko Securities Inc., originally estimated PS Vita would sell 2.5 million units by March, but is now reconsidering, adding, “If strong titles aren’t there for Vita, there is a risk I might have to cut my estimates.”

Not all number crunchers are warning Sony about its launch strategy, however. As Shiro Mikoshiba, an analyst at the Tokyo-based Nomura Holdings Inc. explained: “The customers Sony is targeting with its Vita are those willing to spend a lot of money. That’s a valid strategy even if the volume’s low as long as it can sustain the higher price.”

Sony isn't a stranger to adjusting its prices, but it seems set in its ways regarding the PS Vita. After all, lowering the price now may come across as too much of a reactionary move to Nintendo. Then again, knowing the system will miss a 2011 holiday launch in North America and the UK, it's arguable the system won't be in a strong position to sell for $249 ($299 with 3G) months after everyone has already emptied their wallets.

Enough with the talking heads. Now it's your turn. Should Sony stand firm on its price, or should it heed advice from analysts and consider a cut?

Aug 9, 2011 

Source: Bloomberg 

 

PS Vita to miss 2011 launch window in US/UK, coming in early 2012
Sony confirms 2011 release of next-gen handheld is Japan-only




Nintendo slashing 3DS price tag, offering free games to keep current owners from rioting
3DS to become significant cheaper starting August 12th

 

Nintendo president issues apology letter to 3DS Ambassadors
Satoru Iwata courts early adopters with message to Nintendo fans

29 comments

  • UsernameLoser - August 11, 2011 6:09 p.m.

    Since people are still commenting on this, I will say that I do intend to buy a PSV, sell my 360 and its games, and it will be like I never wasted money. Come on, you seriously wouldn't buy a goddamn portable PS3 for about half the price the PS3 launched on?
  • EnigmaSpirit - August 11, 2011 12:44 a.m.

    Before it was officially priced I was thinking 200. For what it is 250 seems like too much for me to buy it. What really pisses me off is that when the 3ds was announced, the sony fanboys freaked out that a handheld gamesystem was at that price, but when the vita is said the same sony fanboys all go "seems fair." I am not a big fan of Sony. They kinda lost me with the ps3 and psp. If they get some really solid and creative games for the Vita I will consider picking it up after a decent price cut, but at the moment the only game that sparks an interest is Disgaea 3, and that is a port.
  • mothbanquet - August 10, 2011 5:25 p.m.

    Even though, based on its graphical prowess and potential, $250 is actually quite fair, I still hope they lower it. Because I like spending less money on stuff.
  • Tispower - August 10, 2011 3:04 p.m.

    If the original PSP is still selling well in Japan even with the rise of smartphones, it seems silly to assume the next one won't sell well with a relatively decent price.
  • mockraven - August 10, 2011 2:32 p.m.

    The big seller isn't the price but the games. 3DS is struggling due to the games. I know bringing back a lot of the old-gen games is a big deal but most of them don't appeal to me because I have them. I don't see a point in buying an expensive handheld for an upgraded version of Zelda: OoT and the exact same games as what's on the (s)nes, gb(a), etc. when I can play them right now. If PSV can come out with a good launch title, a strong line-up from the beginning, and keep it steady; they'll get customers. That said, while a lower price isn't necessarily bad, I also wonder about Sony's current marketing strategy. They've got some amazing hardware packed in that machine and the dual sticks just gets me all sorts of excited. My question is: How much below manufacturing cost are they selling PSV at? PS3 has always been sold for cheaper than the price to build one (and I think the 360 did this, too). Is PSV in the same boat and Sony already planning on losing money per handheld sold? Or do they have the buffer to do a price cut? As other commenters have stated, the price isn't unreasonable at all when you think about everything the little machine boasts.
  • ParagonT - August 10, 2011 1:58 a.m.

    You know what I find interesting? How people are actually defending the price of the Vita. It's so surreal that consumers that must pay this price, is actually going to agree for a more expensive item. The Vita does not need a price drop to be successful as we all know, but if they DID make a price drop, it would still be successful and you would get the item for less, and more people would buy it. How would a price drop not be a good idea? Why do they think it's not a good idea? Because they know you will pay for it. So I'm not sure who's the idiots here, Sony, or consumers that are the problem for high pricing. Either way, they still make the millions. Good thing I never buy hand-held's anymore.
  • Linktoreality - August 10, 2011 1:55 a.m.

    PSV could be $100 and I still wouldn't buy it.
  • spencertucksen - August 10, 2011 1:22 a.m.

    If Sony can drop it to about 200 dollars, I think that is ideal. 250 is a great deal considering it's games will be light-years ahead of the 3DS' games. But if it's 200, I think that's perfect. No need to drop the extra 30, but 199.99 FEELS cheaper to the masses because there's a 1 instead of a 2. Just drop it there, and they will demolish Nintendo.
  • Moondoggie1157 - August 10, 2011 12:44 a.m.

    Hahaha, lack of games? What a shitty argument towards the Vita. The system isn't even out yet... I'll say it again, at least Sony didn't promise an amazing list of games and fail to deliver. But hey, NES Mario baseball is amazing, definitely worth it, no? What's wrong with buying a handheld that only has one decent game (loZ) and bunch of rehashed titles from 1989? Fuck the Vita! WE HAVE PONG MUAHAHAHA anywho... $250 is a decent price, Sony shouldn't have to drop the price because the 3DS flopped. Don't bother complaining about the price unless you have a decent argument. CHECK!
  • crispychicken - August 10, 2011 12:30 a.m.

    Honestly, I think it's a fair price, but I'd still like it to be maybe around $200. Call me greedy.
  • garnsr - August 10, 2011 12:23 a.m.

    The Vita doesn't seem that different from the PSP, similar to how the 3DS just seems a little better than the DS. Neither really differentiates itself as much as a new console generation usually does, so $250 for a seemingly slight upgrade seems kind of steep to me. I hope the Vita manages to put out some killer games, but it'll probably take a new Castlevania to get me to buy either new handheld, like the previous ones got me into the previous handhelds.
  • Richardohyeah - August 9, 2011 10:26 p.m.

    If they cut the price, it'll be the finishing blow to the 3DS.
  • ItBurnsWhenIWii - August 9, 2011 10:11 p.m.

    If sony can actually launch with uncharted then the system will sell. Nintendo F'd up because there was no new zelda/mario out the door for the system. Hell even the wii launched with zelda. If the games that they said would be launch titles release it will do great and the T.V adds will make themselves. According to the august issue of PTOM the Vita will launch with Uncharted: Golden Abyss, Little Deviants, Sound Shapes, Hot Shots Golf, Reality Fighters, Hustle Kings, Wipeout 2048 and Super Stardust Delta. Thats 8 varied games and while some of them look like throw aways, a lot of them look pretty damn good. Plus this thing will launch with the ability to buy PSP and PS1 games day 1. More than enough content to have a badass advertisment.
  • Cyberninja - August 9, 2011 9:19 p.m.

    in all honesty i say the vitas biggest problem is the lack of games because almost all the games are also releasing/are on ps3 in someform like LBP and Uncharted, so vita might have a weaker launch then 3ds for people who already have a ps3, myself included. for the 3ds i can atleast say it has new games in my favorite series like KH and DOA.
  • ALinkToTheZack - August 9, 2011 8:54 p.m.

    I think the price is fair... Then again I thought the price of the 3DS was fair at $250. To be honest though, I love my 3DS and I would prefer to see the 3DS succeed because I frankly like it more than PSV. So by all means, Sony, keep the price of the PSV the same.
  • 510BrotherPanda - August 9, 2011 8:46 p.m.

    Since the PSP still does a decent job with sales in Japan, I don't see why they need to drop the PSVita's price more...Since stuff like Monster Hunter on PSP did well with just WI-Fi connectivity, the Vita should be alright in Japan. As long as the launch lineup is better than the 3DS' super-lackluster one, it should do alright everywhere else...right?
  • Pepsuber88 - August 9, 2011 8:15 p.m.

    screw those insane prices, I could buy 2 xbox 360s with those 250 bucks!
  • D0CCON - August 9, 2011 8:12 p.m.

    I think Sony could at least launch at $250 and stay there for awhile. It should reach the 3DS's price point eventually, but it shouldn't have to reach that point anywhere near as fast as the 3DS did. If they are only doing this because of the 3DS cuts, I'm wondering if they think the only reason DS outdid PSP was because of the DS's price. Price helped, but I'd say Sony should be more worried about getting a larger number of great games out the door. I'd say the DS has more fantastic, unique games of the biggest variety than any platform currently out and that's the true reason it beat PSP.
  • db1331 - August 9, 2011 8:01 p.m.

    As soon as Nintendo announced the 3DS price cut, the first thing that popped in my head was Sony would be crazy not to match it. It's not that I think the Vita is too expensive at $250-it's still a hell of a deal. Sony has always lagged miles behind Nintendo in the handheld department, and this time Nintendo has left the door WIDE OPEN. This is Sony's chance to deal a death blow to the 3DS. Right now, people are still going to buy the 3DS because it's cheaper than the Vita. If I were a bigwig at Sony, I would already have had a marketing team working on a TV spot that basically says, "This is the Vita. Check out how sexy it looks, look at these bad ass launch titles. It costs the same as a 3DS." If Sony can make even an announcement before the 3DS officially goes on sale on the 12th, it would be like walking into the 3DS' hospital room and ripping the life support plug out of the wall. They need to think big picture. Sure you will take a little hit up front selling the system for a launch, but if you sell even 100k more systems due to the price drop, think how much more you will get in software sales down the road.
  • Errrrbo - August 9, 2011 7:59 p.m.

    This is nonsense. Just because Nintendo's three-legged dog of a handheld has been failing miserably and has to quit being completely overpriced doesn't mean the PS Vita is obligated to drop its price as well. The PSP launched at $250, and has sold nearly 70 million units. Vita will do just fine.

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