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I think they can cut the price. PSP makes up for it. At $169, the PSP-3000 is already raking in some good money, and at $250, the PSPGo will just get them Wii level profit (based on that platform alone, because they'll be selling it at a much higher cost than production).

PS3 only costs $440 to make (according to the latest analyst). So if they cut the price to $300 as the entry price, they lose $140 on each system, but...PSP profit could level it out. This is all hypothetical, of course