The cost difference due to storage size is negligible. I'm sure it costs just as much for them to produce the 1GB flash chip as it does the 8GB chip. You see substantial differences in retail because of greed mainly, and because companies want you to believe that say an 8GB SD card is more valuable than a 4GB SD card (okay, the 32GB and 64GB cards do actually cost more to make for the time being, but that cost drops every day). A lot of 360 games don't hit the ~6GB size limit (about 1GB is reserved for the video partition/system updates included on disc) for several reasons though - one would be that they have pre-set compression routines for FMVs, etc, so they don't increase bitrates or anything like that just for the sake of filling up the disc. Also keep in mind the 3DS has 2 screens (like the DS of course), and the top screen is 800x240 (400x240 for each eye), and the PSP's screen is 480x272, IIRC (and I do), so FMVs will be twice as big as they are on PSP, arguably. I can't see any reason why the (much needed) storage increase could be considered a bad thing.