You would have thought that SONY learned a lesson from the PS3. overprice= overkill. No matter what you stuff into your machine(or omit, as is the case with the PSP Go) it will not sell if you price it too high. If they really want it to succeed they need a much cheaper price and steam-like support for the games. Or else this thing is gonna be the next N gage.

It is a little known fact that R&D on a new machine is completely free. Getting the entire system to work cost Sony a non-trivial sum of money for certain. The advertising likely also cost a non-trivial sum of money. Not being able to recoup those costs in a reasonable amount of time would mean the system is under-performing, and probably "flopped." Not having those numbers in-front of me  it is hard to say definitively one way or the other. I find it extremely unlikely that they are satisfied with the sales. The PSPGo likely will push back any potential switch to a system that is digital distribution quite a bit. Not just for Sony, but for the gaming business as a whole.

Oh sorry Gnizmo.  You were under the impression that the PSP Go was a "new machine", or that something had to be "completely free" to be relatively risk free in an environment that garners millions in revenue in a single day?  You, um, think shrinking and rearranging some chips is pretty rough R&D work, eh?

I am certain redoing the layout of the machine, the sliding screen, and implementing the built in storage, and redesigning the battery cost nothing at all. I mean how could it? Its just a number of changes that affect the heat the machine generates, plus a new potential area for the machine to break at. Nothing you would want to send through quality assurance at all.

I like how you skip over the advertising budget though. The notion that shrinking chips is free, or redesigning the internals is cheap (electrical engineers make serious money) is strange though.

Edit: Oh, and don't forget the added ram as well. This is another heat generating part in a new form factor that has to be accounted for with the new cooling system. Rearranging parts is not nearly as simple as you would lead people to believe. Shrinking a CPU takes a non-trivial amount of time which makes it a non-trivial cost. Completely changing the innards at the same time adds to that as well.

The PSP Go wasn't advertised very heavily, to my recollection.

Seriously, think in relative terms, Gnizmo.  Of course the PSP Go cost some money to R&D the new form factor, shrink the chips, etc. Of course it cost some moderate amount of money to make a new box, and advertise it (although it was quite light, in terms of advert dollars, I would think).

In the grander scheme, its risk factor was extremely low.  Its not a new machine at all, and is far cheaper to produce than the 3000, most likely -- or at least the analysts seem to think so, and that'd be in line with every other chipset shrink like... ever.  Given its hardware and especially software revenue potential, I think you'd be hard pressed to call it a "flop", even after the first 100K sales ($25M revenue) -- which I believe it surpassed in week 1. Add a couple retail-free, CoG-free software sales to each of those units, and I think you'd be pretty lucky to find any expert who'd claim the chip-shrinking and minimal adverts cost Sony more than they made back.

Financially, I doubt the Go cost Sony a dime at this stage.  I don't think they expected it to set new sales records, especially given its high price point, either.  I wouldn't call it a major flop, a flop, or even a minimal flop, just like I wouldn't call it a major success, a success, or a minimal success, because we're not really sure what Sony's plans were for the device.  Maybe its a form factor test for the PSP-2.  Maybe its a DD test, to give their DD infrastructure a workout.  Maybe they honestly thought people wanted a smaller PSP (probably true), and were willing to pay a premium for it (I doubt they thought that, I'm pretty sure the retailers must have demanded the high pricepoint, because it went from being a console which sells secondary goods, to being a plain ole one-sale electronic device).

the psp go is indeed a flop if you consider is againts the psp 3000 but... its more of a flop because its damn 250 dollar/euro if sony cuts the price with 100euro.. i expect the psp go to sell much more( a lot in japan)

I am thinking in relative terms. I just understand how much money you have to pay engineers. They do not work for close to peanuts at small firms. A big project for Sony would mean a significantly higher salary than anything I was looking at back in the day. Simply shrinking the CPU (ala 360) would not be a huge issue, and is normal day to day stuff. The redesigned form factor requires some work though. Just trying to make sure the overall design is consumer friendly can give a significant cost. Never mind fiddling with all the internal parts to make sure nothing about the new design will screw the machine up. The new parts are what will increase the R&D.

Also of note, I am not saying the PSPGo did or did not flop. I don't have anywhere near enough access to hard numbers to claim that. I am saying it has/had the potential to flop. I would also say it is under-performing against Sony expectations, but that doesn't mean it is losing them money. Wii Music massively underperformed, but likely made Nintendo a tidy sum as an example.

Motherboards get re-engineered by companies far smaller than Sony all the time.  Heck, I can do it in my garage.  The form factor probably took some creative effort, but I think you'd be surprised at the efficiency of hardware companies at doing just that on a regular basis.  I think you're overestimating the cost here.  I don't think its going to be significant enough to warrant any sort of serious revenue to pay for it.  Designing and testing new chip designs is the real money/timesink.

You're welcome to disagree, of course, but I think its a pretty bold statement to claim that a hardware device which sells at a hefty profit, like the Wii, can't pay for its minor, like the Wii, R&D expenses, even if its only sold a half million, or even just a couple hundred thousand, units to retail.  Sony practically didn't advertise it at all, either, and I'll bet that's because they weren't willing to risk extra money on a device they knew was overpriced by retailers.

The amount of profit that makes it back to Sony is a question for me that I can't think of an answer for. A lot of the extra profit likely goes to retailers in order to convince them to stock the machine at all. This is a one-time sale for them, and they have alternate models that are supported and will bring in more revenue from game sales right as an alternative.

Like I said though, I am not claiming its a flop. I am claiming that saying it can't flop is completely wrong. There are, necessarily, non-trivial costs associated with adding hardware to a machine. There are new hardware bits in the PSPGo. A healthy number of them despite the fact that you gloss over them everytime you post. Without hard numbers we are left to speculate at what the machine even costs to make. That alone can be counter-intuitive at times (PS3 Slim being sold at a loss?). You are welcome to think there is absolutely no cost associated with employing qualified engineers to do this, but you would be dead wrong.