The Japanese electronics giant is cutting the PSP price by $30 to $169.99. Sony said that its move is meant to increase demand from young users; the AP reported that a Sony spokesman said the number of teens who are using the PSP as their primary handheld entertainment system has been increasing and that it wants to help that trend along by making the price more affordable to such youngsters.
Of course, this strategy underlines the heated competition among the players in this market. When it comes to handheld entertainment, Sony's major competitor is Nintendo, which makes the Game Boy and Nintendo DS handheld gadgets; NPD said in February, the DS outsold the PSP by more than two to one. Furthermore, Nintendo has upped its profile with the very successful launch of its Wii console, which many say has been roping in non-hardcore gamers, unlike those who gravitate toward Sony's PlayStation 3 and Microsoft's
After all, at $250, the Wii is much cheaper than Sony's and Microsoft's high-end consoles. I wonder if part of the decision to cut the PSP's price is because, at $200, some potential buyers (or parents) might be tempted to simply fork over an extra $50 to get a Wii. True, you can't lug a Wii around town, but then again, the Wii has garnered a lot of positive attention here lately. (Note that even with the reduced price, the PSP is still more expensive than the more comparable Nintendo DS handheld.)
Plus, when it comes to mobile gaming and entertainment, there are many options for frittering away time, and I'd say teens generally have at least some of these at their disposal. Apple's
At any rate, it's an interesting move, as Sony attempts to shore up the PSP. It's also noteworthy given the fact that last quarter, Sony's tepid earnings were negatively hit by the high costs of launching the PlayStation 3. There's some irony in reporting a low-key quarter when you're in the midst of launching a long-awaited next-generation console. Sony's popular PlayStation product line is definitely an important brand, but it seems that this time around, PlayStation faces much more formidable competitive forces than it has in the past.
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Alyce Lomax does not own shares of any of the companies mentioned.