When PSP Go is sent to die, which it will die, people are going to be crying and saying, “But… but… this is going to delay digital distribution! If Sony only didn’t have such a high price…”
Right here he seems to be missing a key point. Game companies want DD to take over so that they can make more revenue per game sold, not per device. They plan to cut out retailers so they get a higher % of your $59.99.
When it comes to the hardware itself, they still follow the razor/razorblade model. Sony's goal isn't to make money on hardware. They just want to sell the hardware so they can start making money on games. The issue is that retailers, who are suddenly left out in the cold when it comes to games, demand a much higher margin or else they'll refuse to sell the product. Hence the PSP Go's absurdly high markup. It's either appease retailers or not sell it at all.
Retailers aren't going to carry a product unless they make a decent profit on that product. Even then, some still refuse to carry devices like the PSP Go despite a higher mark-up simply because they fear DD in general, and will do anything to prevent it from gaining ground.
