PSP Price Drop to $99?

G

gbfitzger

CAG Veteran
Article from Forbes:
http://www.forbes.com/business/forbes/2005/1031/216.html?_requestid=479

Getting Zapped
by Dorothy Pomerantz

Videogame makers suffer every time there's a shift in platforms. Customers are holding off buying new games for the upcoming Sony PlayStation 3 and Microsoft Xbox 360, likely to debut around the holidays. So game giant ELECTRONIC ARTS (56, ERTS) is having a dreadful time. The fiscal year ended in March was subpar, and in the first quarter EA suffered a loss--something it hadn't had since fiscal year 2001, amid the changeover from PlayStation 1 to 2. The stock has slumped 19% since March, prompting at least eight shareholder lawsuits.

To Wedbush Morgan Securities analyst Michael Pachter, these circumstances present a buying opportunity. Pachter points out that this Christmas EA will have little competition for its popular Madden NFLgame. Last year Madden was up against Take-Two's Grand Theft Auto: San Andreas and Microsoft's Halo 2.

Also helping: Pachter expects Sony to drop the price of its PSP portable game system from $250 to $99. More people would then be on the prowl for PSP games, which currently account for 9% of EA's revenues.

At 45 times trailing earnings, industry leader EA is more expensive than its competitors. But EA trades at 34 times free cash flow (net operating cash flow minus capital expenditures), lower than all other videogame companies except for Activision, which trades at 23 times free cash yet whose ratio of capital spending to sales is only one-third that of EA.
 
Wow. Even I'll admit at 100 I'd pick it up.

But it won't happen. I can see 200 happening, but not 100. Isn't Sony losing money on the system already?
 
Yep, probably meant $199, since that has basically been the price all along. It's just bundled with extras that make it $250. And soon, it will be bundled with extras to make it $299!
 
Yeah, I would be all voer that for $100. Especially if someone could trade me a copy of Dynasty Warriors for the PSP from KB.

:p

Also, someone has to say it, shouldn't this be in the PSP forum?
 
If it were $99, I'd order one with Wipeout right now. But it will more than likely be $199 and I'll just hold off on it.
 
WOW! If it really drops to $99, I expect that it'll fly off the shelves. $199 does sound more like it. But if that's the case, they should really price it at $150 to compete with the DS.
 
That's one heck of a price drop...somehow I doubt it'll be comming down quite that much. They claimed at launch that they were loosing money on the things. Sony has come out and said that they're not even going to drop the PS2 down to $99 from $149....

What EA really needs is to put out good games on the PSP and not rip people off (can you say SSX on tour? or Need For Speed Underground Rivals? Why in the hell are new EA PSP games comming out at $50?).
 
See, you have to look at the flip side of this issue though. If Sony drops the MSRP even $50 less than 9 months after release it could cause some unwanted negative impact on PS3 sales. It sets a precident that could carry over, that being, Sony is willing to drop their MSRP on a system so soon after launch. This could carry over to the PS3 launch because people will just sit back and wait for a price drop.

I know that, personally, I'll be waiting on the Revolution because of how quickly the DS dropped. $20 price drop after 9 months in release is ridiculous. If that's Nintendo's new strategy then why even buy a system on release anymore?
 
Everyone is forgetting a key part of this article. This is only an analyst's prediction, an analyst, whom I might add, ISN'T EVEN RELATED TO VIDEO GAMES. He's an analyst for Wedbush Morgan Securities, last time I checked, they had nothing to do with video games.
 
$99 is a bad estimate. Even the DS won't be at that price for a while.

Somebody at Forbes is going to get fired.
 
[quote name='gbfitzger'] So game giant ELECTRONIC ARTS (56, ERTS) is having a dreadful time. The fiscal year ended in March was subpar, and in the first quarter EA suffered a loss--something it hadn't had since fiscal year 2001, amid the changeover from PlayStation 1 to 2. The stock has slumped 19% since March, prompting at least eight shareholder lawsuits.
[/QUOTE]

:applause:

I doubt the PSP would drop to $99, but Sony might find a way to sell a small portable DVD player for that price.
 
Lets say next march and a $149 price tag for the PSP along with a few killer apps will have me purchasing it. till then I will be PSPless
 
Even it it turned to $99 tomorrow, I wouldn't get it because I'm not wasting $50 for games.

Now if Sony dropped the price universally of all games to maybe $35 to $40, I'll think about it....
 
[quote name='RedvsBlue']$20 price drop after 9 months in release is ridiculous. If that's Nintendo's new strategy then why even buy a system on release anymore?[/QUOTE]$20 is worth 9 months without it?
 
[quote name='RedvsBlue']I know that, personally, I'll be waiting on the Revolution because of how quickly the DS dropped. $20 price drop after 9 months in release is ridiculous. If that's Nintendo's new strategy then why even buy a system on release anymore?[/QUOTE]
That, and a new/better bundle every other month. I'm happy I got my DS off a buddy because I know after I buy it they'll either drop the price or bundle it cheaper with Animal Crossing.
 
I thought I read at the launch that they would offer a psp only system for an estimated $175 for the holiday season....that would help boost sales, good games would help as well
 
[quote name='sj41']$20 is worth 9 months without it?[/QUOTE]


No, actually I bought mine 1 week before they announced the price drop because I would never have thought that they would drop the price so soon after the launch, especially with such big name titles in the pipeline. I would have gone for the price match but I bought it at Gamestop and was thus screwed because all they would have done is exchange it for a new system.

Now that I see that Nintendo is gonna drop prices on their systems 9 months after release, with it selling well and big hit titles on their way, I'll be waiting for the obviously inevitable price drop for the Revolution. I have a feeling that I may not be alone either.
 
Wait, that article is basically saying Sony should drop the price of it's newest system by $150 so EA can turn a profit?

???

The reason EA suffered last quarter is because all of their games cost $10 more than everyone else's.
 
i would think this would be a core system for 199 if anything, 99 is crazy. but i must admit, fir 99 bucks i would pick one up for sure, even with amount of games out
 
PSP actually has been making money since release, the value pack is what made up for the loss. As for it dropping to $99 bucks maybe I can get a good luminese battle with my roomates finally! But I highly doubt it will drop that much. That is less than the PS2 and I don't think that is logical in any sense but it will definetely spur sales if they do do that. But yea I'm with everyone here the games need to drop in price :( 50 bucks for a retail game is just yea insane, 29.99 good price hehe.
 
[quote name='RedvsBlue']See, you have to look at the flip side of this issue though. If Sony drops the MSRP even $50 less than 9 months after release it could cause some unwanted negative impact on PS3 sales. It sets a precident that could carry over, that being, Sony is willing to drop their MSRP on a system so soon after launch. This could carry over to the PS3 launch because people will just sit back and wait for a price drop.

I know that, personally, I'll be waiting on the Revolution because of how quickly the DS dropped. $20 price drop after 9 months in release is ridiculous. If that's Nintendo's new strategy then why even buy a system on release anymore?[/QUOTE]

Did I honestly just hear a complaint over 20 bucks on a system? I know this is CAg but personally I would just skip one movie and not worrry about the $20 you spent to get a machine 9 months earlier...

Or return some bottles or something.
 
[quote name='Requiem']Even it it turned to $99 tomorrow, I wouldn't get it because I'm not wasting $50 for games.

Now if Sony dropped the price universally of all games to maybe $35 to $40, I'll think about it....[/QUOTE]
You pay retail for all of your games? And $50? Do you give the store a $10 tip?
 
[quote name='Snake2715']Did I honestly just hear a complaint over 20 bucks on a system? I know this is CAg but personally I would just skip one movie and not worrry about the $20 you spent to get a machine 9 months earlier...[/QUOTE]The price drop shouldn't matter. It should be whether or not you have the money at the time. Unless you're really enjoying this generation of consoles and don't want to switch to next-gen. $20 is not very much money.
 
[quote name='sj41'] $20 is not very much money.[/QUOTE]

Jeez, and you call yourself a cheapass... $20 can get you a months worth of food.
 
tsk... tsk... tsk...


PSP at launch date + homebrew aps whenever available = PRICELESS!

apparently, not everyone knows how to harness the TRUE power of the PSP. oh well..
 
[quote name='Bezerker']Jeez, and you call yourself a cheapass... $20 can get you a months worth of food.[/QUOTE]

True, that's a lot of Instant Ramen.
 
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