---

When people start talking of a future without retail games, the topic of how retailers will react always makes an appearance.

Retailers of media haven't been doing so well, first losing the revenue from album sales thanks to iTunes and online music sales, and as other forms of media transition to digital formats, the continued demise of physical media will further hurt retailers.

The global recession just compounds the issue.

With music sales dominated by digital downloads, the next logical step is games. And with the PSP Go, Sony's taken another step toward a digital future by eliminating the PSP's UMD drive -- removing the need to purchase anything besides the console from a physical store.

But for this system to work, a certain amount of cooperation from retail is necessary. The console still needs to be sold in a store, after all. In recent weeks various retailers, such as EB Games Australia and the Dutch retailer Nedgame, have indicated that they won't stock the new handheld. 

The reasons for this are twofold. They believe that the PSP Go's price is simply too high; they may fear low sales and decreased profits. Yet the more significant issue is that the Go removes retailers from the sale of games. Every piece of Go software is purchased online and downloaded directly to the handheld.

But are these good enough reasons for a boycott of the system? (The Bitmob staff has their own reasons for not buying into the Go.) Have these retailers shot themselves in the foot with this move, or are they simply reacting to market demands that to them make the console seem more of a PSP No-Go?

At first glance, retailers' first argument for the boycott -- that the Go costs too much -- doesn't seem valid. When Sony announced the Go at this year's E3, it made a point of saying that it would sell at the same recommended retail price as the original PSP upon its release. Retailers didn't have a problem with stocking the original, so why do they have a problem now? (Other than the worldwide recession.)

Even if retailers deem the price to be too high to make the console a runaway success, this is still a Sony product launch. A large marketing push, plenty of advertising, and word of mouth should ensure that the handheld will be popular. Retailers could believe that demand for the console is low and use this as an excuse to not stock many units, rather than ordering none. Smaller profits are surely better than none at all.

Perhaps the most interesting issue surrounding this boycott is digital distribution. Refusing to sell a product because it won't lead to the sale of more products would be a ludicrous proposition in any other industry; you don't see kitchen-appliance stores boycotting refrigerators because they won't be able to sell the customer food, nor do you see furniture stores refusing to sell wardrobes because they don't sell clothes. If you're making a profit on the original item, why must it lead to the sale of other products?

If you look more closely at the situation, however, a large amount of evidence suggests that Nedgame and co. may be justified in their position. Although the price may be the same, this new iteration of the handheld enters a market that's very different from the one it originally faced. The DS has turned into an unstoppable force in the handheld market. The iPhone is a valid gaming platform. And the state of the world economy means that far less people are willing to shell out for a premium-priced product.

The Go's price becomes more of an issue when you consider that a pretty similar console in the form of the PSP-3000 is for sale just down the aisle for much less -- and with an almost identical feature set. The 3000 can still download games; it just lacks the massive internal storage of the Go, which players can easily remedy with the purchase of a memory stick.

Maybe this is a bad assumption to make, but I don't think many readers of this blog are going to buy this new console. As a result, less-informed consumers may bear the brunt of the Go's price. This could hurt Sony a great deal.

It might be that the console, with its lack of new features aside from an aesthetic redesign, may yet be the orchestrator of its own demise. Maybe retailers haven't affected its success at all; maybe they've just looked at the console and decided it's a no-go after all.

We'll just have to wait for sales figures to come out before we'll know whether they were right.