The games were developed overseas (India I think?). I would send them bug reports in Mantis and overnight they would send a new build. Sometimes they would even fix the bugs. I would burn the builds on to EEPROMs and verify them the next day. The EEPROMS had a little round window so they could be erased in a UV box before programming.
Fisher Price used a video codec from Actimagine to fit video clips onto the game cartridges. That's how I learned about Virtualdub. I remember editing clips from a show called Winx.
The big competition was the Leapster LeapPad and they were trouncing us.
One fun thing the engineers did periodically was a toy teardown to see how competitors saved on cost. Cost was critical. They told me how Walmart basically dictates toy cost because they controlled the shelf space.
Also one of my favorite PalmOS games! It is worth noting that this game has been open sourced under a new name, Hostile Takeover.
For the Pixter Color in 2003 I found a price of $80 US at release. The specs aren't directly comparable (less RAM and I bet less battery life too). But still! That's less than half the cost of a black-and-white Palm m105 around the same time.
I wonder how cheap PDAs might have been if mass market forces had been applied to them. Handheld computers didn't really get the cost reduce it like a mass market kid's toy treatment until the smartphone era.