- Re-invigorates the PSP image. Developer and consumer interest has definitely increased since the announcement.
- Creates a "value proposition" in the consumer's mind. Just like looking at different SKUs in the 360 lineup, consumers feel that they have "choice". (Which, as a consumer, we actually have very little, we "choose" from various options that are fed to us by the market.)
- The hardware is likely being sold for a signifigantly higher margin without the UMD drive and in consideration of the price.

This all amounts to more profits for Sony's Gaming Division (or whatever it was called after the restructuring). Too many people are giving their opinions on the device without a second thought to how a BUSINESS should be run. I expect that the PSPGo will sell to digital enthusiasts first, just like the original PS3. Sales will be decent but not stellar. This will still generate a sizable quantity of income and there is also a "budget" model of PSP available on the market too.

I think that the revenue from the PSPGo will be used to cut the price of the PS3 assuming they're still on track for their 13 million sales for this year. If everything goes as planned, this could be the year that Sony pulls out of the red in their electronics and services division.

It's very clever business, if you look at it objectively, not "OMG wadda I do wif muh UMDs and iz so expensif!" (And there will be some sort of UMD transfer option, apparently, and there is still a cheaper 3000 on the market, so both those points are moot.)

Edit: Oh, and the article talks about the success of the Iphone with it's smaller, budget price apps. There was an article on N4G not two days ago that discussed Sony approaching developers for just those sort of games. People really need to do their homework before spewing off ANOTHER random internet rant.

Edit #2: @ Below. Yeah, they weren't very specific, but Sony reps have stated that they are "actively" looking at ways for customers to get their old UMD games onto a new PSPGo. That pretty much sold me on one right there. Whether it's a voucher, or tied to your account (like Live Originals) or an actual transfer cable to PSP/ PS3 (that would link the game to your PSN account or something), they have a lot of options. I'm fairly certain it will be a "link to account" sorta deal. Won't change resells much, they will just have to test the game on a PSP at EB/ Gameshack/ whatever before taking the game, to make certain that it's not tied to any particular PSN account.

Didn't know there was a UMD transfer. That's pretty nifty.

Ya, it's totally great that they ditched the ProDuo. Now I can just throw my extra 12 gigs of storage away and buy it all over again.

/sarcasm