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silicon on 18 September 2009
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Grimes said:

You have to look at it from the retailer's perspective. You have limited funds to purchase new product.

You can sell the PSP Go and make say a 15% margin and no accessories or games. That means you've tied up $220 to make $30.

Or you can try to sell something else, say a PS3 that makes the same 15% margin. That means you pay $255 to make $45. However you will be able to sell more games and accessories for a 30% margin. It only costs $25 more investment to buy another PS3 rather than a PSP Go and you can sell more profitable product in the future.

Which do you think is the better investment?



It's not as simple as that. If there are two stores and one sells PSP GO and the other doesn't. A consumer that wants to purchase a PSP will most likely want to see all of their options. This consumer will end up going into the store with the PSP GO in order to compare. They may end up buying the PSP 3000, and you would still be able to sell games. They could also buy the PSP GO.

In terms of making an investment some products with a good margin might not sell which would make them a bad investment.

There's a good chance that someone with a PSP GO also has another console. Being able to increase traffic in the store selling PSP cards allows people to browse for anything else the store might sell.