Sony made sure it cut production and shipment to Japan and the UK prior to the launch of the PSP in the US. Guess it didn’t really need to:

LOS ANGELES (Reuters) - Sony Corp.’s new handheld video game unit, the PlayStation Portable, is selling well but is far from sold out at stores nationwide, an analyst said on Thursday.
One week after the $249 PSP package was launched in the United States, American Technology Research found that only 50 of 150 stores surveyed nationally in the last two days were sold out. Another 15 stores had three or fewer units left.

Sony pushed hard to have as many as 1 million units available for the U.S. launch, postponing the device’s European debut indefinitely so it could have enough hardware to meet that U.S. goal. Supplies have been thin in Japan as well, where the PSP debuted in a frenzy late last year.

The PSP, which also plays movies and music in addition to games, is Sony’s first entry into handheld gaming, a market controlled since 1989 by Nintendo Co. Ltd. . Nintendo’s established Game Boy Advance SP sells for $79, and its new dual-screened DS sells for $149.

Analyst P.J. McNealy said the specialty gaming retailers have already sold through two waves of hardware, but “big-box” retailers like Target Corp. and Wal-Mart Stores Inc. got more units than expected at launch and have inventory remaining.

McNealy estimated the PSP sold as many as 575,000 units in its first week, with up to 300,000 left in the inventory channel.

That’s nowhere near the blockbuster they thought it would be, as they were expecting 1,000,000 in the first couple of days. Interesting. Of course, there is an easy explanation for why they aren’t whizzing off the shelves as hoped:

1. Price: $249
2. Game Selection: Not terrific. A few goodies, but a lot of filler.
3. Dead Pixels: Sorry, but for $249 I want a perfect screen. Sony is only replacing units with 2 or more dead pixels. That’s simply unacceptable. Nintendo replaced every single DS sold to customers with even one dead pixel. That’s how it’s done.
4. Lukewarm reviews: Well, lukewarm from everyone except fanboys who love everything Sony puts its name on.
5. Multimedia: Either the Memory Stick or nothing. The UMD format (a new format created specifically for the PSP) is not writeable. And there isn’t a single other device on the market that uses it. Universal Media Disk. Where’s the Universal part? Now granted, it’s not like any other system uses open media, but they aren’t $249 either.
6. Game Price: $50 for a portable game? My ass. Next!
7. Size: As sleek as it is compared to what I thought it would be, it still isn’t pocketable in any fashion.
8. Battery: 2 hours? Are you kidding?

There’s your reasons. Pay attention Sony. The video game discussion boards are humming. You should be listening.

Source: Reuters