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Forums - Sony Discussion - The PSP Go was a MAJOR flop. We need to talk about it.

well, it boosted regular psp sales and provides maybe 300k$ of profit a week in Japan (figuring in 100$ profit from each one.
Over total sales, they've made 10M from the go, according to this estimate.



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Regardless of PSP GO's profit margin, the product itself must be losing tons of money. From a manufacturing's perspective, Sony has committed to manufacture a certain number of PSP GO for this year based on their sales forecast. Thus, a huge amount of money would have already been invested in the production lines to meet their forecast. Moreover, assuming that PSP GO is OEMed, Sony would also have committed to purchase a number of PSP GO per month or per quarter from the manufacturer, and probably all those extra PSP GO are now sitting in their warehouse at this moment. Unless of course, Sony forecasted the product to sell as poorly as it is now.

Even if Sony manufacture PSP Go themselves (which would be unlikely), they would have already bought the longer lead time components. Unfortunately, the more expensive components, such as LCD and casing, cannot be used in regular PSP production.

My guess is that many people here are not familiar with product development and manufacturing, and thus do not understand the risk involved in making hardware. It is one of the reasons why Nintendo are so conservative in their forecasts. It is always fine to underestimate the demand; however, overestimating demand as in the case of PSP Go is really bad for business. Just look at dreamcast as another example.



Procrastinato said:
Gnizmo said:
Procrastinato said:

Oh sorry Gnizmo.  You were under the impression that the PSP Go was a "new machine"?  You, um, think shrinking and rearranging some chips is pretty rough R&D work, eh?

I guess you speak for yourself, as usual.

I am certain redoing the layout of the machine, the sliding screen, and implementing the built in storage, and redesigning the battery cost nothing at all. I mean how could it? Its just a number of changes that affect the heat the machine generates, plus a new potential area for the machine to break at. Nothing you would want to send through quality assurance at all.

I like how you skip over the advertising budget though. The notion that shrinking chips is free, or redesigning the internals is cheap (electrical engineers make serious money) is strange though.

The PSP Go wasn't advertised very heavily, to my recollection.

Seriously, think in relative terms, Gnizmo.  Of course the PSP Go cost some money to R&D the new form factor, shrink the chips, etc. Of course it cost some moderate amount of money to make a new box, and advertise it (although it was quite light, in terms of advert dollars, I would think).

In the grander scheme, its risk factor was extremely low.  Its not a new machine at all, and is far cheaper to produce than the 3000, most likely -- or at least the analysts seem to think so, and that'd be in line with every other chipset shrink like... ever.  Given its hardware and especially software revenue potential, I think you'd be hard pressed to call it a "flop", even after the first 100K sales ($25M revenue) -- which I believe it surpassed in week 1. Add a couple retail-free, CoG-free software sales to each of those units, and I think you'd be pretty lucky to find any expert who'd claim the chip-shrinking and minimal adverts cost Sony more than they made back.

Financially, I doubt the Go cost Sony a dime at this stage.  I don't think they expected it to set new sales records, especially given its high price point, either.  I wouldn't call it a major flop, a flop, or even a minimal flop, just like I wouldn't call it a major success, a success, or a minimal success, because we're not really sure what Sony's plans were for the device.  Maybe its a form factor test for the PSP-2.  Maybe its a DD test, to give their DD infrastructure a workout.  Maybe they honestly thought people wanted a smaller PSP (probably true), and were willing to pay a premium for it (I doubt they thought that, I'm pretty sure the retailers must have demanded the high pricepoint, because it went from being a console which sells secondary goods, to being a plain ole one-sale electronic device).

 

It's sold only 64.4k so far...



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AlkamistStar said:

It's sold only 64.4k so far...

Source?  I recall several reports here on VGC that it sold more than that in the first week, to the tune of 30K in Japan alone.

Also, Sony sells to retail, not to consumers.  The number shipped (i.e. sold to retail) is likely far, far greater than that number.

 



 

Procrastinato said:
Gnizmo said:
Procrastinato said:

It was impossible for the PSP-Go to flop. It doesn't take much money to reduce a chipset, honestly. That's probably all it cost Sony, really. Digital downloads spurred by the device make like 2x normal revenue, since cost-of-goods and retail cuts are missing from the equation, and we don't even see those numbers reported here on VGC -- just "100K FF7 sold in first month" and random other quips. For all we know, the PSP-Go has an unbelievable attach rate, and each of those software units rakes in a load more money than a UMD unit does.

I'm sure Sony hoped it would be the next big thing, but the retail demand for a high price stunted that somewhat, I think.

Honestly I think that calling something a "flop" requires some risk involved. I don't really think there was much risk associated with the Go.

It is a little known fact that R&D on a new machine is completely free. Getting the entire system to work cost Sony a non-trivial sum of money for certain. The advertising likely also cost a non-trivial sum of money. Not being able to recoup those costs in a reasonable amount of time would mean the system is under-performing, and probably "flopped." Not having those numbers in-front of me  it is hard to say definitively one way or the other. I find it extremely unlikely that they are satisfied with the sales. The PSPGo likely will push back any potential switch to a system that is digital distribution quite a bit. Not just for Sony, but for the gaming business as a whole.

Oh sorry Gnizmo.  You were under the impression that the PSP Go was a "new machine", or that something had to be "completely free" to be relatively risk free in an environment that garners millions in revenue in a single day?  You, um, think shrinking and rearranging some chips is pretty rough R&D work, eh?

Clueless. Completely clueless.



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RolStoppable said:
Procrastinato said:
AlkamistStar said:

It's sold only 64.4k so far...

Source?  I recall several reports here on VGC that it sold more than that in the first week, to the tune of 30K in Japan alone.

Also, Sony sells to retail, not to consumers.  The number shipped (i.e. sold to retail) is likely far, far greater than that number.

The source is Media Create, so Japanese sales. It's currently being outsold by the 360 over there and that's pretty telling how successful the PSP Go is.

So... its sold 65K... in Japan ...thusfar, and that's the basis for the "flop" argument.  I missed that interesting qualification, in AlkamistStar's statement, I'm afraid.

Also... 360 sales in Japan aren't exactly an indicator of anything, anywhere else.  I don't think your assumption that PSP Go sales in Japan are going to be an indicator elsewhere is a reasonably founded assumption either -- your use of 360 performance in Japan, in your argument, is a great, and ironic, example.



 

@Procrastinato: Considering how hot items handhelds are in Japan and how DS redesigns light up the charts there, the PSP Go has done badly.

And yes, the number of units shipped is likely the figure Sony is using.



Ei Kiinasti.

Eikä Japanisti.

Vaan pannaan jalalla koreasti.

 

Nintendo games sell only on Nintendo system.

Procrastinato said:
RolStoppable said:
Procrastinato said:
AlkamistStar said:

It's sold only 64.4k so far...

Source?  I recall several reports here on VGC that it sold more than that in the first week, to the tune of 30K in Japan alone.

Also, Sony sells to retail, not to consumers.  The number shipped (i.e. sold to retail) is likely far, far greater than that number.

The source is Media Create, so Japanese sales. It's currently being outsold by the 360 over there and that's pretty telling how successful the PSP Go is.

So... its sold 65K... in Japan ...thusfar, and that's the basis for the "flop" argument.  I missed that interesting qualification, in AlkamistStar's statement, I'm afraid.

Also... 360 sales in Japan aren't exactly an indicator of anything, anywhere else.  I don't think your assumption that PSP Go sales in Japan are going to be an indicator elsewhere is a reasonably founded assumption either -- your use of 360 performance in Japan, in your argument, is a great, and ironic, example.

Just by your responses you sound sour, lol. Give it a rest. The source was in the OP, if you bothered to read. Also, the reason bdbdbd gave is a great point. Everyone knows the Japanese people LOVE the next new thing, especially handheld gaming. From Gameboy, to Neo-geo, to DS, to PSP...but the PSP Go...a product from Sony of all companies...nothing (at least nothing to speak of). Yes, i personally consider a new handheld with Sony's brand slapped on it sold at 64.4k in Japan in close to 2 months a flop.



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I don't know about you guys but I laughed my ass off reading the title haha.



65k is awful, maybe it can do LTD what DSLL did in its first 4 days. Nearly half of that 65k is from the first week. It's barely selling anymore and we are in the holidays right now. Retailers are gonna stop stocking it pretty soon at this rate. People are focusing on Japan because we have no numbers for Europe or US, NPD didn't even release numbers as far as i know. This is coming from someone who is planning on buying a PSP go really soon, it's just the reality of the situation.



currently playing: Skyward Sword, Mario Sunshine, Xenoblade Chronicles X