It's not just development costs of porting to PSV, it's having to deal with taxing retail. The reason PSP started going DD was not because Sony were ready to go head to head with retail, it's because retail literally didn't give a fuck about the PSP, they didn't want it in there beyond major titles.
PSV SKUs of PS360 games are going to bomb, and no one is going to make them. Exclusives and 'HD' versions of 3DS games will make up most of the library. However Sony still need install base for that to happen.
Meisadragon said:
Well, they were under immense pressure, and a price cut is a really good way of building momentum for the hardware. Also sometimes, a late price fails to do that. They did completely opposite of the phrase "Too little, too late." Yes, the slider pad accessory and the large price cut reeks of desperation, but the thing is, they really cannot afford to take the 3DS situation lightly. They're taking a loss on the 3DS now, which really shows to what extent they can go.
They did make some mistakes with the 3DS, and I'm not denying that, though.
I think more than anything, they fucked up by admitting failure. If it was Western company, that wouldn't have happened. They'd have told you stoned faced they knew early numbers would be weak because of the library.
Another thing they did was plant the idea that the PSV is great value. Which was really stupid. If they'd have launched at $220, dropped to $200 with Mario Kart for Xmas, I think they'd have done far better. Maybe I'm wrong, we'll never know. But I think it's been very poorly managed.
Even with that, I'm not saying I knew they were going to fuck up. I thought the 3DS would do great straight away, I thought people would love the 3D screen and PSV was doomed without one. Turns out no one cares about 3D.