UPDATED: In a communication to Joystiq, Sony of America denied the system’s demise saying “We are continuing production of PSP Go for North America.” And we wish them the best with that. Original story continues below.

Well this is it, the PSPgo is dead. The Japanese PlayStation site shows both the black and white versions of the PSPgo as “shipments ended”. The PSPgo was released in October of 2009 to almost no fanfare, and has been a slow selling, perplexing product ever since. The PSPgo didn’t play UMDs like its big brother, instead only allowing users to download games from the Playstation Store. This caused issues when companies like Square Enix would decide not to release some of its biggest titles digitally, or there was the painfully long downloading and installing process of games from the PSN Store, something I witnessed this first hand when it took over 2 hours for me to download and install Metal Gear Solid: Peace Walker.

Rumors had circulated for a while that the device was either headed for discontinuation or a deep price cut but, aside from a quick 2 day price drop to $149, the device had been priced at $199 for a while. It began its life priced at $249.

Via Andriasang

When Sony released the PSPgo in 2009 it’s biggest feature was that it didn’t play UMDs. Digital downloads of games weren’t just the future they were the now. But something funny happened on the way to the UMDless future Sony envisioned. Some publishers Square Enix being the biggest culprit didn’t play ball. Many of Square Enix’s biggest PSP titles are not available digitally. Meaning, you can’t play them on the PSPgo. Well now Sony says that if you don’t release your game physically and digitally on the same day, you don’t release games on the NGP. Take that Final Fantasy 013: Jacoruis (Phantom Shadows; Rising Beacon)*, looks like we’ll see you in stores AND online, or not at all.

*A game I just made up.

Via MCV

Any ideas as to why this might have happened? Does this say anything about the potential price-point rumor for the NGP?

Well it’s not dead yet, but the PSPgo is now officially priced at $199, just in time for today’s Ghost of Sparta embargo to break. Interesting. Anyway, it’s not even that big of a deal, many retailers were already selling it at this price. So I don’t think we’ll see a big jump in sales, but you never know. Once this news trickles to the mainstream we may see a few mom and dad’s consider this for holiday gifts.

Chillingo will be releasing a version of their ridiculously popular game, Angry Birds, as a PlayStation Mini. The official press release has the following specifics:

The PlayStation minis version of Angry Birds will feature:

• Four Exciting Worlds with over 120 levels that require logic, skill and brute force to crush the enemy!
• A Brand New World 4: “The Big Set Up”- Full of addictively fun surprises unseen before!
• A Bonus Golden Egg World that clever players can unlock!
• A New Big Brother Bird capable of massive destruction!

No specific date has been set yet, but you can count on launching some fowl this fall.

Engadget has some exciting info on a new Sony Ericsson phone that looks to be the love child of a Droid X and PSP Go. Apparently, Google and Sony have been working on a gaming phone to compete with the iPhone when it comes to phone-gaming. While there are no official pictures of the phone, the mock-up above made from leaked details clearly shows the heavy PSP influence. A trusted source has told Engadget that the slider phone will more than likely have the following features:

• ~4 inch WVGA or better display
• D-pad and elongated touch pad for control
• PSP inspired buttons including  shoulder buttons
• Android 3.0 OS
• 5 MP camera
• 1 Ghz Snapdragon CPU

Other details have yet to be finalized or confirmed. According to the source, the phone would have the horsepower to play PSX and PSP games such as God of War, Medal of Honor, and Little Big Planet, all of which are rumored to be in the works. It looks like the phone could be out as early as October, just in time for the holiday season.

It’s time to fix that.

Sony has a weapon so secret that that they don’t even realize what it is, and it could turn the tide in their favor if they just started using it: the PSP. A device seemingly as unremarkable as the library games made for it, the PSP could be Sony’s game changer. All they have to do is use it, and end this innovation stagnation.

Say hello to my little friend

1) Kill the 3000 and roll with the ‘go

While the PSPgo isn’t the next-generation PSP, it is the successor to the PSP 3000. Treat it as such, and discontinue the PSP 3000.

The problem with the PSPgo isn’t that it’s smaller or lacks a UMD drive; the problem is that it’s $80 dollars more than its tech-identical brother. When a company releases the “slim” branded model of anything, the pricing goes down, not up; that’s basic video games economics. Trying to inflate the price based on the “new gadget” thinking only works when you are selling a new gadget. Sony isn’t.

The digital-distribution revolution isn’t going to be ushered in on the back of an overpriced console. 3DO didn’t bring us the age of CD-ROM based consoles. The first Playstation did…because it was affordable. Digital distribution is the future. Sony has the chance to shape that future right now.

Selling the PSPgo at a loss (something Sony will have to do in order to keep any level of reseller adoption) and discontinuing the PSP 3000 would be good for business. Increased PSPgo sales means that more revenue flows directly through Sony and their PSN store. It also means that used sales will dry up, as digital games aren’t re-sellable, further increasing Sony’s revenue stream. Beyond even that, there is something to be said for being the spokesperson and figurehead for a revolution. Making digital-distribution a legitimate business model in the console space will label Sony as a revolutionary, and being a revolutionary is great for PR.

It kind of does some things.

2) Unify the PSN Experience

The PSPgo and the PS3 can both connect and interact with Sony’s Playstation Network. Sony is the only company with a handheld and television based console that can do that. The problem is that the PSPgo cannot interact with the PSN the same way the PS3 does, and Sony needs to change that.

Give the PSPgo a permanent connection the PSN like the PS3. When the PSPgo is on, and wifi is available, it is connected. Allow users access to friends lists, messaging, and the ability to see what people are playing. And, as cool gift to your gamers, add trophies to PSP games.

Adding trophies to PSP games serves a double purpose. It adds a cool feature for users and, more importantly, gives Sony the advantage on Microsoft in a game that Microsoft has been playing badly for years. Microsoft has yet to deliver any of their “Xbox Live Anywhere” devices to retail. Sony can patch in the ability and then nonchalantly acknowledge it, beating Microsoft to the punch.

Most importantly, unifying the experience not only legitimizes the PSN platform and eschews ideas of “afterthought,” it also fulfills the promise of the PSPgo as a true media device. Something that plays games, movies, and music. Something that allows you to call your friends on the phone. And now, something that keeps you connected to your friends through PSN.

Don't worry. I cropped out the spoiler.

3) Save File Syncing

The PS3 is a system that you primarily play from the couch or in bed. The PSP is a system that you primarily play on the go when you aren’t near the PS3. An increasing number of PSN titles are becoming cross platform. Playstation Minis and PSOne Classics are playable on both the PS3 and the PSP. While they aren’t the “top-of-the-line” titles for either system, they are still cross-compatible, an innovation that shouldn’t be overlooked. Imagine if a user could sync their save files from one device to another. While it seems like a limited use feature, one should never underestimate the potential “wow” factor of it.

You’re playing Final Fantasy 7 on the couch when you realize you have a dentist appointment. You save, exit to the XMB, sync the save file to your PSPgo, and then pick up where you left off at the dentist. When you get back home, reverse the process, and you are playing on the TV again. Simple, but with huge PR potential.

The bottom line is that innovation doesn’t have to come from new tech. This isn’t about 3-D; it’s not about motion tech. It’s simply about putting the puzzle together with the pieces you already have. Sony has more pieces than anyone else in this puzzle…they just need to put it together.

This Week’s Guests:

• Eli Hodapp from Toucharcade.com