After much speculation and long-held predictions, major retailers EB Games and GameStop have officially begun offering the PSP Core package for $169.99 -- a thirty dollar drop from its original launch price.
The PSP Entertainment Pack, bundled with a 1 gig memory stick, ATV Offroad Fury
, and a Lords of Dogtown UMD movie is also expected to get a similar cut to $199 from $249.
As recently as this year's GDC, Lazard's Colin Sebastian was predicting an imminent price cut
for the PSP, saying "Sony could be preparing to bolster the PSP handheld market with a shift in marketing towards a younger demographic, possibly including a hardware price cut later this year," he said, adding that "a combination of a lower hardware price and stronger software release lineup is necessary for meaningful expansion of the PSP market."
In his most recent notes, Sebastian adds that the "lower price should give the PSP a shot in the arm," adding that the cut will be supported with "a new print and online marketing campaign targeted at young adults and teens."
"It is too early to conclude whether Sony’s pricing action will cause game developers to increase the pipeline of new PSP titles," he concludes, "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."
The price cut is a "positive on the margin for video game publishers," says Sebastian, "as PSP software sales do not account for a significant portion of publisher or industry sell-through at this point."
In the official release from Sony, which also announced that PSP titles Daxter
and Syphon Filter: Dark Mirror
would be joining the Greatest Hits line at $19.99, SCEA president Jack Tretton said, "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.
He added, "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."