Another viewpoint on the recent pricedrop from gamedaily:

If you've been waiting for a price drop before picking up Sony's PSP, you're in luck. Effective today, SCEA has slashed the price on its portable to $169.99. Lazard Capital Markets analyst Colin Sebastian believes this will have a modest effect on overall PSP sales.


In honor of the PSP's second anniversary, Sony Computer Entertainment America (SCEA) has indeed cut the price on its portable by $30. This was strongly rumored yesterday. The PSP Core Pack will now retail for $169.99 across North America. In conjunction with this price drop, SCEA also announced that it's adding both Daxter and Syphon Filter: Dark Mirror to the PSP "Greatest Hits" collection.


"We have always been passionate about making great entertainment accessible to everyone, and the new price for PSP, as well as the continued growth of the 'Greatest Hits' library, reflect our ongoing commitment to supporting and expanding the PSP community," commented Jack Tretton, president and CEO, Sony Computer Entertainment America. "We are pleased that we are able to engineer savings for the consumer at this stage of PSP's lifecycle, allowing more individuals to experience PSP for the first time. In particular, we have recently seen a steady rise in the number of teens adopting PSP as their primary handheld entertainment system, and we expect the new price will accelerate that trend."


Sony noted that through December 31, 2006, hardware shipments for PSP rose to 25 million worldwide while software shipments increased to over 90 million units. Although the PSP is trailing the Nintendo DS, Sony is confident in its portable business and hopes to see more growth in 2007 with titles from franchises like God of War, Ratchet & Clank, SOCOM: U.S. Navy SEALs, and Syphon Filter.


"Ready At Dawn couldn't be more pleased with our success bringing Daxter to the PSP platform last year, and now we have another opportunity to blow away expectations of what a developer can accomplish on a portable when Kratos hits the 'small screen' in God of War," said Didier Malenfant, co-founder and president, Ready At Dawn Studios. "PSP is an ideal platform for us to work on because we have a high level of freedom to be creative, and we can deliver gameplay experiences that rival ones you'd get from a computer entertainment system."


Colin Sebastian of Lazard Capital Markets is somewhat encouraged by the PSP price cut, noting that the lower price should give the PSP a "shot in the arm." He said, "Importantly, this is the first formal price cut on the PSP since its launch in March 2005 (core model launched in March 2006). Sony is planning to support the pricing move with a new print and online marketing campaign targeted at young adults and teens... We expect a modest step-up in PSP unit sales during an otherwise seasonally slower period for the video game industry. We note that a Wal-Mart promotion on Black Friday last year generated significant sales volume for the PSP at a discounted price of $169, providing one indication of potential consumer demand. We also believe the potential release of Gran Turismo for the PSP in 2H2007 could further boost unit sales. In terms of software, we believe hardware price cuts can positively affect game sales with an expanding installed base as well as additional foot traffic in retail stores."


Sebastian added, "It is too early to conclude whether Sony's pricing action will cause game developers to increase the pipeline of new PSP titles; however, several publishers publicly called on Sony to lower the PSP price and broaden the consumer end market. At the new $169 price, we note that the PSP is still $40 higher than Nintendo's DS." ...