OP-ED: It’s Too Soon for a PlayStation Vita Price Cut
PlayStation Vita has now been available for two months in North America and Europe, and twice as long in Japan. In that time it’s failed to make any sort of significant splash as far as sales go — in Japan, where we receive weekly updates courtesy of Media Create, the system sold less than 9,000 units in each of the first two weeks this month, and it wasn’t as if it was doing gangbusters prior to that. Software has done poorly as well, rarely making the top 50 sales charts in Japan; in the U.S., only MLB 12 has been seen in the NPD’s top 10, and that is with sales of the PlayStation 3 and Vita versions being combined. All of the Vita’s games are also available through the PlayStation Store, so it is unfair to judge the performance of software purely on sales charts that only account for retail. The amount of hardware that has been moved so far, however, does feel like cause for concern.
Sony is in a less-than-desirable position right now, as outlined in a recent New York Times piece. Vita not exploding out of the gate is relatively low on the list of problems for the company, which hasn’t turned a profit in years. But with new president and CEO Kaz Hirai recently pronouncing gaming as one of the pillars upon which Sony will turn things around, bigger things have to be expected from Vita. A middling success (if it can be called that) is not enough.
Gamasutra’s Chris Morris has suggested the company consider dropping the system’s price — in the United States it retails for $249.99 and $299.99 for the Wi-Fi and 3G models, respectively. In examining the issue, he doesn’t see it as especially likely, and with good reason, in my opinion. It’s too soon for a price cut.
The most immediate question is whether Sony could even afford to slash the price of the system. While many feel it and its games are overpriced, especially with the 3DS being available for $169.99, Vita is being sold at a loss. In other words, Sony loses money on each and every one it sells. This is nothing new for Sony, as it was also true of previous platforms, including the PlayStation 3. Increasing the hit Sony takes on every piece of hardware it moves, particularly at a time where its television business in particular is struggling mightily, may not be feasible.
As Morris notes, the early days of Vita’s life seem to be mirroring what the 3DS went through last year. Sales were unnotable in the first half of 2011; it wasn’t until an $80 price cut happened and an influx of software was made available during the holiday shopping season that Nintendo turned things around. It’s difficult to say what deserves most of the credit for the shift. The system was lacking quality software, a situation which was largely resolved between the release of Super Mario 3D Land and Mario Kart 7 (and Monster Hunter 3G in Japan). At $250, the price was likely too high, especially for a system with nothing that looked as good as a $7 iOS game (Infinity Blade II) playable on multiple platforms with one purchase. And the holiday shopping season is traditionally where videogame hardware sees a big boost. All three played some role in the turnaround; I don’t think anyone would try to argue it was the price cut alone that was responsible.
Vita had the benefit of a much stronger launch lineup than 3DS. Whereas the best offerings for 3DS were Ghost Recon: Shadow Wars and Super Street Fighter IV (the eShop was unavailable until months after launch), Vita had Uncharted: Golden Abyss, Lumines: Electronic Symphony, Wipeout 2048, and Tales From Space: Mutant Blobs Attack to offer gamers. Uncharted was clearly the headliner, and that largely remains true even today, which explains why the system hasn’t made it big in Japan. Since then there hasn’t been a great deal to speak of in terms of original games; Unit 13 is fun but deeply flawed, and it won’t be until the end of May and June that Resistance: Burning Skies and Gravity Rush hit in the United States. A constant flow of software is sure to help the Vita’s case, and in Japan a single Monster Hunter title could turn things around in a hurry.
There is also the possibility that Vita’s lackluster start is due in part to the lull the entire industry is currently going through. Total industry sales in the U.S. in March were down 25 percent as compared with the same period last year; hardware was down 35 percent. That’s continued a recent trend of sales being down worldwide. If and when that comes to an end, Vita may benefit from that. Allowing time to pass will almost certainly help to boost Vita sales, both because more software will be available and because we’ll be approaching the holiday shopping season, the significance of which should not be underestimated.
The impact of a price cut also goes beyond the sales of PlayStation Vita. If it comes too soon, early adopters may feel shafted. And while that’s a risk you run by purchasing any new piece of technology, that truth doesn’t mean gamers will be any less resentful. Nintendo dealt with this by offering 20 free games (10 NES, 10 GBA) to anyone who purchased a 3DS prior to the price cut going into effect in August. Regardless of whether that was enough to satiate early adopters’ frustrations, cutting a new system’s price so soon could cause consumers some hesitation when that company launches its next piece of hardware. Whatever the Wii U’s price ends up being, there will inevitably be those questioning whether or not a slow start will result in its price being slashed soon after. Sony is no doubt aware of this, just as Nintendo was when making its decision regarding the 3DS.
“With regard to the influence on the Wii U, what we have to take most seriously is that the price markdown could damage the trust of the consumers who bought the Nintendo 3DS just after the launch. I feel greatly accountable for it,” Nintendo president Satoru Iwata said last summer. “Our decision of the price markdown this time has a side effect that, at the launch of the Wii U, people may feel that the price might drop in the near future if they wait. Nevertheless, we have decided to cut down the price of the Nintendo 3DS as we consider it as a necessary decision now. What we will be able to do to recover the consumers’ trust before the launch of the Wii U is very important to us.”
Although it has yet to be announced, there are no shortage of rumors about the PlayStation 3′s successor. Just last month it was reported that the PlayStation 4 could be out toward the end of 2013. That would not be a long time for consumers to forget about how the Vita’s slow start led to a price cut. After the PS3 had trouble initially selling at its exorbitant price tag, Sony would rather not give people any reason to wait on a purchase.
On the other hand, a Vita price cut might convince those who are waiting for its price to drop to buy one to go ahead and do just that, though I think the potential of this is not worth the possible benefits considering all of the negatives laid out above.
The software will come in time; there’s little Sony can do to speed that along without sacrificing quality. That doesn’t mean there is absolutely nothing it can do to make a Vita purchase more attractive. Those pricey proprietary memory cards could use with a price cut of their own; as one is all but necessary with the purchase of a system, they automatically increase that $250 (or $300) price by somewhere between $20 and $100. And the recent launch of an open beta for the PlayStation Suite SDK is a good start in trying to convince independent developers to create software for the system; from here it would be wise to do all it can to support such development. For all of the praise heaped upon Lumines and Uncharted, it is Mutant Blobs Attack, a small downloadable game, that many feel is Vita’s best game to date. Encouraging developers to bring more projects of its size to the platform will be important to the Vita’s long-term health. In this age of digital distribution, not everything has to be a $40-plus retail title, and the combination of offering cheaper games and cheaper memory cards could make Vita more attractive to consumers without Sony having to touch the price of the system itself so soon after launch.