The PSP Go doesn't cost more for any other reason other than that Sony thinks that new hardware should be priced according to "a certain premium," whatever that means.
When Michael Pachter called the PSP Go a "rip-off," he was being a little bit over the top, but I think we all agreed with what he was basically saying. At $80 more than the current PSP model, the thing isn't exactly cheap. So why the dramatic price difference? When MCV suggested it might be to protect retail margins (since there won't be retail game sales with the digital-only Go) or to recoup research costs, Sony denied both reasons.
"Those aren't the factors," Andrew House, president of Sony Computer Entertainment Europe, said. "When you introduce a new piece of hardware you have the opportunity to say there is a certain premium that is associated with it, and we took that into account."
Now I don't have a MBA or anything, so forgive me if I'm getting mixed up here, but to me that sounds like there's no reason for making the thing more expensive other than the fact that new stuff is supposed to be more expensive, since they have that "premium" value. I see the business logic there - if something didn't cost more, it wouldn't seem like something newer or better than what's already out there.
"As with all hardware launches you look at the business model, the cost structure, and the necessary level of profitability, and you use that to set the wholesale price," House said. "Much as we do with any other hardware."
When Pachter apologized for his "rip-off" remark, he said that if Sony can "make a profit on the PSP Go, more power to them." I can't say I disagree - Sony should feel free to do whatever they have to in order to get themselves into the land of actually making money, but I can't help but feel that even if they did do their homework and are pricing the machine strategically, that it's still a bit much. I'm not sure gamers will perceive of the "certain premium" associated with the Go as clearly as Sony does.