I agree with the conclusion that Nintendo doesn't have too much to worry about here. However, I believe the gap may be closer than your conclusion, and if I may, I have a slightly different take on this matter:

To the first point, from what I can tell, the relative size will be equivalent to that of the DS rather than the micro. both are a pretty good size relative to the hand, which I think is what is most important.

I agree that downloading is going to be a big stumbling block. However, I see two counter-points that are worth considering. First, the systems has to be able to surpass the physical limitations of memory capacity as well as the psychological limit of download wait time. Both have their limits. However, if the Go games can be kept relatively small, then it may be possible to surpass both limits.... The Apple App Store works well enough if only because program sizes are fairly small. It may be kind of a long shot, but if Sony can pull off the same, they'll be fine.

The other consideration is that they are not technically limited to the download strategy. If they want, they can go back to selling physical copies of games in the form of small capacity memory sticks. This might seem a bit awkward at first until one realizes that that's exactly what we've been doing all along with the DS. Except that the DS was designed with such an interface in mind. Whether this is a viable workaround, and whether Sony decides to take this approach remains to be seen. Still, the option is out there, especially for larger, more cumbersom games.

Otherwise, I agree that I don't see the download model taking off anytime soon....

I've owned a micro as well, and to tell you the truth, I did like it. I believe that it could have succeeded because it was easily pocketable, whereas the other are not.

I believe that the real reason why it failed was because, by then, Nintendo had already moved on to the next generation DS, which was capable of both GBA games as well as DS games. The micro, while a technologicall marvel in hardware engineering, was woefully stuck in the past.

This is a big deal because it also illustrates an important history lesson: That great hardware engineering alone is not enough to succeed in the gaming industry. Much more importantly, it has to be driven by great games. And this lesson in history comes to bear prominently on the PSP Go, and it also shines a glaring light on what I think is the Go's most distinctive disadvantage: Games.

Most of the PSP games right now are on UMD. And yet, the Go does not have UMD capability. While that may be the right design decision to make, it also currently puts the Go's gaming library back to square one.

The solution? From what I've heard so far, Sony wants to sell both models side by side, but I think if they're smart, they would provide some kind of solution where owners of UMD games can somehow exchange it for a conversion, download, or memory stick equivalent of the same game to play on the Go. But I don't see this happening yet, and even if they do, it's still a technical stumbling block that could dissuade all but the more dedicated fans of the system.

I completely agree with the fourth and final point. The price is going to limit this one to the special gifts and adult gamer arena. And to succeed there, they're going to need killer games available for the Go. No Games, No Go. It'll be like the PS3 all over again.

While I'm no particular fan of Sony gaming right now, I think there is still hope for the Go. However, the path is a treacherous one indeed.

If Sony PSP no longer existed, would it matter?

http://www.mattermeter.com/matter/Opera+Web+Browser