Download only WAS the problem, PC users might be very happy with steam, but real customers and especially handheld owners wan't physical media..

Those PC gamers aren't real customers anyway, who cares? Same as all those Iphone gamers, fake, all of them!

Well its still possible that they will make it a combination of both DD and physical media,  it would actually be a smart idea.  Include both a physical media drive and flash memory

They already do that on the PSP and DSi. Of course thats going to continue, what's not going to continue is download only systems.

But, I still feel the biggest reason it flopped was price. Had it been priced right, it would have sold more and devs would potentially have invested more into games.

hopefully they learned that ppl want their physical format and download only for awhile yet, i will always want my physical format for games.

I refuse to believe that this device failed because it was download only. Honestly, I can't see why people would want a non-download portable. I mean, weren't the two biggest complaints about the PSP its size and battery life? Because they effect the portability of the device? A download-only platform would mean longer battery life, smaller form factor AND it would mean that you could carry your entire library in your pocket, thus making the platform more portable.

No, the PSPGo failed for a plethora of reasons that aren't because it's download only:

 - It's ugly
 - It's expensive
 - It had poor support
 - The PSP3000 is still around, which exaggerated the price of the Go, and is the reason for the poor support.
 - Lack of advertising campaign, etc. I wouldn't have known about the Go (even to this day), if I wasn't a forumite.

The last two, btw, were symptoms of this being an experiment.

You don't know if it failed.

and consumers are right to say no to it.

It wouldn't be an issue if they introduced both capabilities, it took years for PC games to get where it is today with DD. The current PSP3000 is just fine the way it is, you have the option to buy a hard copy, or a download copy, if the game is avaliable for download, limiting the distribution to only one form is never a good thing, consumers want options, more options is what draw people in, not less.

if anything, they need to give up their memory stick shit, umd, and bluray for portable and go with a media that requires much less power with amazing transfer and seek speeds, like SDHC media, you can go up to 2 terabytes on that thing at a very small size at good speeds and still keep the cost at a very good level.