Sony Admits Having Large Profit Margin On PSPgo

With its internal memory that can carry up to 17 to 18 games at once, as well as its ability to download new games and content online, PSPgo is a sweet deal except for its price.

Some analysts speculated that the $250 price tag is meant to appease retail giants or recoup research and development costs, but SCEE President Andrew House explained that "those aren't the factors."

"When you introduce a new piece of hardware you have the opportunity to say there is a certain premium that is associated with it, and we took that into account. As with all hardware launches you look at the business model, the cost structure, and the necessarily level of profitability, and you use that to set the wholesale price."

"On balance we are still a good value for money entertainment form, especially in terms of dollars per hour spent. You have to be clearly sensitive to consumers' perceptions right now. I am something of an optimist; I think there will be a turnaround within this calendar year."

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