Sony thinks we're lost little sheep
If you know anything about the PSPGo, then you also know it's one of the strangest products ever released. See, the PSPGo is basically a smaller version of the original PSP, with pretty much the same features and same hardware except no support for UMD games. Instead Sony wants you to login to their online store to purchase and download all games. But not all UMD games are available for download, so you have a smaller range to choose from. And you can only purchase from their store for full retail price, with no refunds available. With physical UMDs on the other hand, you can rent from a video store, borrow from a friend, buy second hand for peanuts, etc.
So if a consumer already has a PSP, there's absolutely no reason to get a Go, unless you just want something a tiny bit smaller. The original PSP can still login to the online store, can still play all of the new online only games, but can also play the full range of UMD games. Plus all the accessories and cables for the Go are not backwards compatible with the original, so you'd have to go out and buy duplicates of everything just because Sony wants to bleed you dry.
Maybe the PSP Go is intended for new customers then. But it costs about $100 MORE than the original PSP at retail (not to mention that the original can be picked up dirt-cheap second-hand now), and it does less.... I've never had a PSP before, and I'm not really interested in buying a 6 year old console unless I get a really good deal for it and really cheap games. My best option right now would be to get a classic PSP for which I can get cheap UMDs from gaming store bargain bins whilst still being able to connect online and download exclusive PSN content.
So if the Go is not a good option for existing customers as it makes no sense to upgrade, and if it's not a good option for new customers as it costs more to do less than the original PSP...then what is the target audience?
Sony recently released a statement saying that consumers were 'confused' by Go and that they're intending to 're-communicate' with us, presumably to tell us how great it is and why we should all be buying one...
I don't think consumers are confused. People just saw through how bad a deal the Go was and decided to keep their money in their wallets, or perhaps get an iPod Touch instead which offers much better entertainment value with it's collection of online games without even intending to be a gaming console. It's baffling that a company as big as Sony has such little understanding of consumer needs. They had the opportunity to release a killer hand-held online gaming console to dominate the iPhone, DS and the rest, but completely stuffed it up due to their greed and over-inflated prices.