Are gaming handhelds too expensive?

In the wake of the PS3 Slim price-cut landslide of news, one small wound still lingers, and has now gotten worse: the PSP Go is still $249.

Now that the PS3 Slim is $299, and the Xbox 360 Elite is well on its way to the same price, the ceiling for console gaming is finally coming down. This isn't a surprise; it happens every gaming generation. But, considering the components of multipurpose systems like the Xbox 360 and PlayStation 3, this generation of consoles has hovered at higher prices than consoles of the past. Now, however, all three home consoles are within $50 of each other. The next sensible step would be for the Wii to take a price cut as well, and it most likely will happen this holiday season in some form (be it a real cut or a new bundle with Wii MotionPlus and Wii Sports Resort, for instance).

However, while consoles have been seeing price drops, handheld game systems have been seeing an odd recent trend--price increases. The PSP Go, which was seen as Sony's handheld comeback, actually costs more than a regular PSP, despite having fewer features. At $250, it's not just the cost of the original PSP; it's also only 50 dollars less than a PS3. The Nintendo DS Lite, which costs $129, received a revamp in the form of the improved camera-equipped DSi, which can also download more affordable games...at an increased price of $170.

Handheld game systems aren't just taking hits in terms of system costs, either. While DS cartridges and UMDs at $19.99 and $29.99 a pop once seemed like affordable alternatives to 50- and 60-dollar console boxed games, downloadable games on PSN, Xbox Live Arcade, and WiiWare are routinely being released for $15 and less.

As our own Jeff Bakalar reflected, handheld game systems are dinosaurs, in a sense. They hearken back to a time in the early '90s when there were no smartphones or cell phones at all, no MP3 players, no portable video outside of a Sony Watchman. A handheld like the Game Boy afforded portable entertainment that nothing else could. Now, DSis and PSPs have to compete with iPhones, iPod Touches, a flurry of other handhelds, and even the occasional Zune. Many of these can also play games now, forcing Nintendo and Sony to include features like cameras, MP3 playback, and video downloads to justify the cost of purchase.

Maybe we're calling this flatline too early here at the CNET emergency room, but are dedicated handheld game consoles on their way to extinction? We hope not. Hopefully they'll eventually be cheaper, play downloadable, affordable games from a nearly infinite back-catalog library, and be portable jukeboxes of retro gaming. We'd appreciate that, and we'd also appreciate if those systems got a little cheaper, too.

We will credit Sony for its new "snackable" mini game releases that will be on their way to the PSP's online store, as well as the DSi's more affordable $5 Art Style titles. But this trend needs to continue, and quickly--especially since high-quality titles for the iPhone, like Real Racing, cost $10 or less.

Would you like to see handheld systems lower their costs even more? Do you even use handhelds, or has the iPhone already conquered that territory for you? As time goes on, our phones are becoming our handheld game systems of choice here at the office, and this trend doesn't look like it's going anywhere. Should Sony and Nintendo turn their systems into smartphones as well, or simply admit the challenge and price-drop accordingly?

All we know for sure is one thing: $250 for a PSP Go has become even more absurd than before.