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EricHiggin said:

The $250 is more so based on using mostly existing PS4 internal hardware. A PS5 Ryzen based unit would likely be more expensive, but not necessarily all that much more. A PS4 SS around 2019 should only cost $199 max, and the portable would only need a screen and battery on top of that, so $250 should easily be doable for the entire handheld and dock. $300 worst case scenario if they were to launch it with a more than reasonable amount of storage.

Getting the same performance in a much smaller formfactor costs a lot. Miniturization is expensive.

See laptop prices compared to desktop PCs with similar performance... or ultrabook prices compared to bigger and heavier laptops with similar performance. Or the GPD Win 2 compared to a notebook with similar performance.