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UK Retailers drop price of PSP Go

Other sites are hinting that this is because of unexpectedly low and disappointing sales.

But, that almost definitely isn’t the case because it doesn’t appear that Sony is involved with the price drop, but rather retailers are independently lowering the price that they charge consumers. This cuts into their own per-unit-profit for the trade off of drawing sales volume away from competing retailers selling the exact same PSP Go.

Because the PSP Go conducts all game sales via Sony’s online store and leaves traditional retailers completely out of the picture for new and used games, Sony set an unusually high margin or markup between the price that the retailers buy units from Sony and Sony’s official “suggested retail” consumer selling price.

In some countries, retailers have the legal freedom to completely ignore the “suggested selling price” and adjust their selling price to maximize the trade off between profit-per-unit vs. sales volume. In other markets, Sony has more legal leverage to control the consumer selling price that the middle-men retailers sell Sony’s hardware at.

So, US pricing remains very close to the high-margin MSRP, while UK pricing quickly dropped. My interpretation is that this is due to differences in laws and regulations rather than differences in sales performance. I’d expect that UK retailers have more freedom over their own selling price of Sony’s device than the US retailers do in this scenario.