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Okay, I am creating this thread because I am tired of defending the PSP Go from people taking one look at the machine and saying "this shit sux". I'm not going to argue about the price, because there isn't really anything to argue about. We can all agree that it is too high for the consumer, but that wont stop all of us from getting a PSP Go, and we can still appreciate what the PSP Go is bringing with it.
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1) Yes, the screen is 0.5" smaller than the current PSP model, but it fixes all the issues with the screen in the PSP-3000.

"We watched video clips and played several games in our hands on time, and I feel comfortable in saying that the PSP Go has the best screen ever put into a portable console."

http://www.destructoid.com/e3-09-hands-on-with-the-psp-go-134707.phtml

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2) The buttons are now improved and also placed more comfortable.

"The hand feel of the unit is very close to that of the DualShock setup that Sony has used from the beginning. The d-pad and left analog nub placement sits right where your left thumb would fall, just like it does with the DualShock."

http://www.destructoid.com/e3-09-hands-on-with-the-psp-go-134707.phtml

"The fact that the buttons are a little lower on the system than the current one means that you don't have to form as much of a claw to use the shoulder buttons. There's more distance from the bulk of your hand and your index fingers with the go, which should make it more comfortable in the long run."

...

"My fingers wrapped comfortably around the edges of the device and I didn't have to cramp or arch my fingers to get a good feel on the shoulder buttons. Outside of my concerns about the physical size of the device, another big worry of mine was the positioning of the thumbstick. Again, misled by the in-hand promotional pictures, the thumbstick appeared to be bit of a reach for a player's thumb, but in reality its within a comfortable range."

http://gear.ign.com/articles/990/990882p1.html

For comparison's sake, here is a picture, courtesy of NeoGAF:

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3) No, it can't play games on UMDs, we know! But we don't worry about it, because we will be downloading all our games from the PS Store when the PSP Go releases, and with the size of PSP games, it will be a long time before we have to expand from the 16 GB internal memory. Furthermore, the Media Go software used for communication with your PSP and PC in the future, will allow you to backup games on your PC, so you wont necessarily have to expand.

""The old saying that content is king is even more true with the PSPgo launch, and we'll be meeting that challenge through the digital launch of virtually every title launching on UMD from now on, as well as converting over 300 catalog UMD titles to digital for the PSPgo launch," Koller said."

http://kotaku.com/5282032/the-great-experiment

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4) The PSP Go is smaller and lighter, meaning that it's more portable than ever before. It's pocketsized! It's not something you need to carry in a bag! And with the built in memory, you don't have to go out and purchase a memory stick to download games, because it's already in there!

"Physical features
• 50% smaller than the original PSP.
• 40% lighter than the original PSP."

http://gizmodo.com/5275966/everything-you-need-to-know-about-the-psp-go

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5) The PSP Go! has built in Bluetooth, although just how much it will be used for, we don't know yet.

"Bluetooth function: This is going to let you use your favourite wireless head phones to listen to music, play games and watch videos…."

http://blog.eu.playstation.com/2009/06/12/pspgo-your-questions-answered/

UPDATE:

Sixaxis and Dualshock 3 controllers have been confirmed to be able to connect with the PSP Go.

"According to Game Watch, the PSP Go will indeed have support for both the Sixaxis and DualShock 3 PS3 controllers. Let's face it - the PSP Go may just be a tad too small for some hands, so this option is a welcome alternative when you're at home anyway, or if you're willing to take a controller with you to play outdoors. For obvious reasons, you won't be able to use L2, L3, R2, R3, and the second analog stick if you use a controller."

http://www.qj.net/Another-look-at-the-PSP-Go-controller-connectivity-in-game-XMB/pg/49/aid/132523

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6) The battery life will be the same as on the regular PSP models. Yes, it would have been nice to have more battery life in there, but it's hard to complain when it is actually just as good as before.

"We have adopted an embedded battery to realise a smaller and lighter PSP system. The battery life is equivalent with the current models meaning approximately 3 to 6 hours for gameplays and approximately 3 to 5 hours for playing back videos."

http://blog.eu.playstation.com/2009/06/12/pspgo-your-questions-answered/

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7) The PSP Go is not for everyone, and Sony realize that not everyone are interested in a DD only handheld, which is why the 3000 is staying on the market.
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Now, we all agree that the PSP Go has a very high price, but for some of us, it's still worth it! And Sony are going to sell it at that price to get some profit from the people who are willing to buy it at that price. If you don't like it, then wait for a pricecut, and stop acting like the PSP Go will be locked at $249 for all eternity, it won't.

For Sony, the PSP Go is quite a win/win situation really. The profitmargins on it are so high, that even if it doesn't really take off, chances are that it will sell enough for it to cover the R&D costs, and Sony can lower the price to see if there still is no real interest. If there isn't any real interest, then Sony have tested the market to see if it was ready for a DD only handheld, and still made a profit from it, and this test will affect everybody in the industry, because it is a forerunner to what will inevitably be the dominant distribution of games at some point.

And remember all those games that have been announced for the PSP? Why do you think Sony could convince developers to create more games for the PSP, if they didn't have a plan to deal with piracy? The PSP Go is a part of that plan, and it's one of the reasons Sony have been able to garner so much support for the PSP lately.

And I personally hope that Sony are succesful. Not only because a handheld console lends itself so well to the DD principle, but because I think the PSP Go is a wonderful piece of machinery, which I will love to play on.

The PSP Go is not going to be a failure, no matter how you put it. It's only a matter of how much of a success it will be, and nothing more.