Sony plans to lure iPhone developers to the PSPgo, a revised version of its PlayStation Portable handheld gaming platform, and copy Apple’s low App Store prices to create demand for the relatively expensive new hardware, according to a gaming industry report.

The article, published by PocketGamer, indicates that Sony plans to deliver a library of online PSPgo games for download through its PlayStation Network at prices of 1, 2 and 5 Euros, similar to Apple’s iPhone apps, as a way to create interest in the new PSPgo hardware, which is expected to cost $250 or £230.

The original PSP, unveiled in 2004, was similarly priced at $250 in the US and attempted to sell both games and movies on Sony’s proprietary UMD optical media for around $25-$40. Sony later enabled the purchase of online games for around $20 each.

The UMD format never really took off for movies, and sales of the PSP have languished behind the more popular Nintendo DS. Since 2004, Sony has sold around 50 million PSPs while Nintendo has created a DS installed base of over 107 million over a similar period.

More recently, the PSP has seen new competition from the iPhone and iPod touch, which offer gaming as a secondary feature to web browsing, email, media playback features, and on the iPhone, serving as a mobile phone. In just over two years, Apple has developed an installed base of 45 million devices, 100,000 registered developers, and 65,000 apps according to COO Tim Cook in the company’s Q3 2009 conference call.

By matching the price of iPhone apps, Sony hopes to stay in the game. The company faces some real challenges in making that happen, including enticing developers away from the already proven iPhone market to sell to a new installed base of PSPgo users.