Sony tried to sell consumers and retailers the PSP Go with its download only games. Consumers didn't like the device because it didn’t allow them to play any games they had from previous PSP consoles. Retailers didn’t like the Go because there were no backend software sales to be had.
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Those two factors combined to doom the Go before it ever started. Sony has apparently learned that a download only console isn’t feasible for now. The next console form Sony is expected to be the PS4 sometime in the 2016 time frame.
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Speculation early in the PS3 days stoked by Sony execs was that the PS4 would forgo a physical optical drive and physical media altogether. Sony's Kaz Hirai has squashed those fears saying, "There's always going to be requirement for a business of our size and scope to have a physical medium. To think everything will be downloaded in two years, three years or even ten years from now is taking it a little bit to the extreme."