Is PSP-Go a Rip-Off? | PS3Blog.net
The new PSP Go probably costs less to manufacture since the added embedded flash memory probably costs less than the UMD assembly which is removed, yet the retail price is $80 more than the PSP-3000.
Some of that profit is going to retail to compensate them for getting cut out of games sales by direct downloads as opposed to digital discs. But the rest is extra profit margin for Sony.
To me, the bigger disappointment is the lack of other hardware and OS level improvements to the Go. While the smartphone industry has been dazzling with rapid innovation, the PSP has been comparatively stagnant. On the positive side, the game are looking much better, and there is a lot more than simple $.99 ports of flash games.