Perceived Velocity is an attempt to quantify how fast a pitch appears to a hitter, by factoring the Velocity of the pitch and the release point of the pitcher. It takes Velocity one step further -- because a 95 mph fastball will reach a hitter faster if the pitcher releases the ball seven feet in front of the rubber instead of six.
To attain Perceived Velocity, the average Major League "Extension" must first be obtained. Any pitcher who releases the ball from behind the average Extension will have a lower Perceived Velocity than actual Velocity. On the other hand, if a pitcher releases the ball from in front of the average Extension, he'll have a higher Perceived Velocity than actual Velocity.
Perceived Velocity can be a good way to assess pitchers who seem to be sneakily good against hitters. A pitcher throwing a fastball at 93 mph generally shouldn't be blowing hitters away, but if that fastball has a Perceived Velocity of 96, then it makes more sense why hitters might be late on it.
Of course, there is much more to pitching than Velocity and Perceived Velocity. And -- with offspeed pitches especially -- Perceived Velocity isn't always an indicator of a pitcher's success.
As you'd expect, taller pitchers with longer wingspans tend to have higher Perceived Velocities, because their release points tend to be much closer to home plate.
In A Call
"The pitch was clocked at 94 mph but it looked like X mph to the hitter"