More on PSP With HDD

Following last week's report from Piper Jaffray that predicted Sony would deliver a hard drive enabled PSP next year, GameSpot talks further with Piper Jaffray analyst Anthony Gikas about his forecast.

On why he believes Sony will release a PSP with a HDD, Gikas said, "If it really is going to be a multi-dimensional entertainment device, it's going to need a hard drive so you can store greater amounts of data in it."

He predicts this move will give Sony pricing flexibility such as "selling the base PSP for $199 and the new model for the original price point of $250." Gikas added, "They're not making much money on these hardware devices to begin with, and to the extent that [systems] go historically from $300 to $200 to $150 to $99 to $79, you're just losing more and more money as the cycle progresses. I think you're going to see smaller upgrades to these hardware devices as we move into this next cycle and that'll give the hardware guys an opportunity to re-price and keep those price points higher."

Adding another $90-100 for a hard drive to the bill of materials cost will only exacerbate the losses. Of course, if they can start delivering a steady stream of compelling content for the PSP then who cares, right?