How Much For That NGP (PSP2) in the Window?

Games retailer GameStop seems to enjoy frightening passerby. The company yesterday listed Sony's just announced NGP, or "Next Generation Portable" (nee PSP2) for $1,000. "Actual price to be determined," read the product title, pre-orders accepted.

GameStop's not known for throwing up inaccurate pre-pricing. They were spot-on with Kinect, and even when they're off, it's not by half a grand (or more). So folks were understandably agitated. In fact the viewer response was apparently considerable (and presumably negative) enough to get GameStop's attention, and by yesterday afternoon, the page was gone.

The good news: Sony's confirmed the price of its next generation handheld won't be $1,000, or really anywhere near that number. In fact Sony Computer Entertainment president Shu Yoshida admits the device "won't be $599," by which he means it'll be less than $600. Sony's final word on the matter, for now, is that the NGP will be "affordable."

Handheld 3DO

But what if "affordable" to Sony means $450? $400? Even $350 sounds steep compared to Nintendo's $250 3DS or Apple's $230 iPod Touch (8GB), but then Sony's developed a reputation for pricing products out of the market. The original 20GB PlayStation 3 cost an impulse-throttling $500 at launch, and the 60GB version an absurd $600. Make what you will of that price strategy's impact on Sony's third-place U.S. console sales position.

The company's most recent games handheld, the PSP Go, debuted for $250, $80 more than the slightly larger but feature-superior PSP 3000. The Go's since dropped to $200, but still costs $30 more, and the company's admitted sales have been well below expectations.

Getting the NGP's price right is crucial. Cool as the NGP sounds, it's just a handheld 3DO if the pricing's wrong. When Trip Hawkins' CD-based system emerged alongside the Super Nintendo and Sega Genesis in 1993, the 32-bit RISC-based technology was breathtaking...as was its $700 price tag.

The Price is Right?

Market analysts seem to believe Sony plans to make good on suggestions it'll price the NGP comparable to competing handhelds (see: the $250 3DS). Lazard Capital Markets' Colin Sebastian thinks it'll debut for $300, while EEDAR's Jesse Divnich pegs it at between $300 and $350.

Wedbush Morgan analyst Michael Pacther thinks the "break even" price given component estimates should be $249 (€249, £199). If Sony's looking for margin, he says it could cost $50 to $100 more.

"If it is more than $299, I think they have a problem," adds Pachter.

I think that's right. $250 lets Sony compete with Nintendo, $300 keeps them in the game (though at risk of losing the Nintendo crowd, with its six or seven month head start), and anything more start turning the system into a "PSP Going Nowhere," whatever its technological merits.

The good news: We hear Sony's planning multiple versions of the handheld, including a WiFi-only (without 3G) option. Expect multiple SKUs and price entry points, perhaps a WiFi-only model for $250 and a 3G alternative for $300.

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