Or rather, I don't think SCEA/SCEE get it, given the software they put out on the platform, and I have a feeling it is part of the reason the PSP has struggled to find success in the Western market.  They focus on trying to bring the ps2 experience to PSP as opposed to making games more tailored to the handheld experience.  It has resulted in a platform that lacks its own identity, instead playing second fiddle to its much more successful older brother.

It's an issue I've long had with the PSP.  Too many of its games are either ps2 games shoehorned onto PSP or straight up ports.  I'd describe them as console-lite games, as they are essentially smaller and weaker versions of their ps2 counterparts, with little redeeming value to be found in their transition to a handheld.  They're usually done by B teams as well, studios who have had little to no involvement with the original franchise.

A perfect example of this is God of War: Chains of Olympus.  It is basically God of War II, only it's shorter and has a much weaker story, worse graphics, and a gimped control scheme given the PSP's control configuration.

And God of War is hardly the only one.  Jak & Daxter: The Lost Frontier, Ratchet & Clank: Size Matters, MotorStorm: Arctic Edge, and the numerous Socom games are all basically ps2 games, only they're weaker all around.  What's worse is that most of them ended up getting ported to ps2 eventually!  That hardly gives you an incentive to pick up the console.  Why get a PSP for a crappier ps2 experience, especially when most of those games will hit the ps2 anyway?

Then you have games like ModNation Racers, an incredibly toned down version of the ps3 title released on the exact same day.  Who would honestly buy the PSP version over the ps3 version?

SCEA/SCEE have really only put serious effort into three titles designed properly for the handheld experience:

• Killzone: Liberation - Guerrilla Games approached the Killzone IP from a completely different perspective when working with the PSP, making an isometric shooter instead of an FPS.  They traded a control scheme that simply wouldn't work well on PSP (unlike other devs -_-) in exchange for something much better, making the gameplay experience quite different from its console counterparts and quite fun and cool for a handheld title.  This is what happens when you have the original developer attempting to expand their IP by bringing it to new platforms, as opposed to some other team simply trying to replicate it.  This is the best example to be found of what Sony's Western arms should be doing on PSP.  The only problem is the game is hard as balls!

• Daxter - Ready at Dawn was founded by some ex-Naughty Dog devs that worked on the original Jak & Daxter, and they created a fun spin-off from the franchise surrounding Daxter and his new business doing work for various people around town.  It was a unique take on the franchise, and it was fun all around.  Of course, platformers in general translate well to the handheld scene, so I suppose Ready at Dawn had an advantage here. 

• LittleBigPlanet - Developed by Sony's Cambridge Studio in conjunction with Media Molecule, this is a fun 2D platformer with a unique set of levels designed by some of Sony's best, and it even lets you trade levels you create with other people via wi-fi.  However, even this game suffers from a bit of "console-lite" syndrome, given it doesn't support multiplayer, one of the biggest draws of LBP PS3, and it doesn't offer much else in exchange for the removal of that and other features.  That being said, the game is a whole lotta fun, and it's probably the only good 2D platformer on the system.

So yeah, three titles.  That's about it. I guess I'd also give a nod to the Wipeout titles, given they were developed by Sony Liverpool, and they really work well on PSP.

On the other hand, the guys at SCEJ have provided a wealth of original content for the platform in addition to successfully bringing older franchises to the handheld space.  Sony's Japan Studio alone have come up with numerous new IPs like LocoRoco, Patapon, and Patchwork Heroes.

Here's a rough list of great games SCEJ have brought to the platform:

• LocoRoco
• Patapon
• Patchwork Heroes
• PoPoLoCrois
• Hold Invasion of Privacy, Badman!  What Did I Do to Deserve This?
• Jeanne D'Arc
• Ape Quest (fun take on Ape Escape)
• Gran Turismo (actually lambasted by western reviewers for the changes made for the handheld version)

The only "console-lite" games to be found from SCEJ are maybe the Hot Shots games and Ape Escape: On the Loose, a remake of the original Ape Escape.  Everything else was designed for and works quite well with the PSP experience, and I feel this is a principle reason behind the PSP's relative success in Japan compared to its performance in the West.

This disparity between SCE's western and eastern support of the platform is only magnified by third parties.  In the west, the only notable third party releases are titles like GTA: Liberty City Stories and Midnight Club, both of which are quite similar to their console counterparts, while in Japan you see games like Monster Hunter and Dissidia: Final Fantasy at the forefront of attention, the former of which utilizes the PSP's ad-hoc multiplayer to standout, and the latter of which is some crazy mix of SRPG and 2D fighter, certainly unlike anything we've seen from the franchise before.

Western reviews are also adding to the problem, given that they praise titles like Chains of Olympus (which has the highest metacritic of any PSP game -_-), while shunning any unique takes on existing properties.  For example, Gran Turismo PSP replaced the traditional GT Career Mode with challenges and events, favoring a bite sized gameplay experience that's a better fit for handhelds.  Combine this with the fact you can transfer any cars you unlock to GT5, and it becomes an excellent compliment to the console GTs.  You can play for short bursts in the car, then transfer your progress to your ps3 later.  Reviewers by and large lambasted the game for this, however, decrying its lack of a career mode, and for the most part just complaining they didn't release GT4 on PSP.

SCEA at least have been very successful on the PSN front, and their attitude in fostering unique content (Flower, the PixelJunk games) seen there could've been quite helpful in making the PSP a better value proposition in the West, but instead they focused their efforts on getting studios like High Impact Games and Slant Six to milk Jak, Ratchet, and Socom.

Do you think this has had a large impact on the PSP's positioning in the West?

Fuuu that's long.  I probably could've made it much more succint, but screw it.  I'm going to sleep lol.

There's a lot of merit to that list of points, particularly the observation that many of the big PSP games are essentially scaled down versions of PS2 games (or PS3 games).

I'd like to say that there are definite key differences between Japanese and Northern American demographics with respect to preferences of portable vs. console gaming, but that still wouldn't explain the phenomenal success of the DS in NA.

Best I can tell, the DS is something just about any child who has an interest in games will own (I see a lot of kids with them in public places), in addition to being something an average adult can just pick up for Brain Age, or any number of the non-traditional adult oriented apps (cooking apps, exercise guides, crossword puzzles, sudoku, etc.). Plenty of games from Nintendo's core IPs for traditional gamers as well, in addition to big third party support.

The PSP on the other hand seems more like a media player device that has a decent library of core audience based games, which has lesser appeal to a broader audience. It's less of a children's toy, yet doesn't hold a terrible amount of appeal to the typical working adult who isn't an avid gamer and already owns an iPod.

Personally, it took me years before I finally bought one and it was ultimately to play the stack of PSP games I'd collected over the years that weren't available on any other system. If they had been, I'm going to have to say I probably would have skipped the PSP altogether, even as a core gamer.

What you say is essentially what a large number of people have said about the platform. Its a common conversational thread which you see when the PSPs sales are being discussed. I suspect that many people simply either didn't buy the machine to play games or if they did they put the PSP into a drawer somewhere once they discovered the PSP was unsuitable to carry with you very easily and playing the same games at home with access to a console and TV doesn't make very much sense really.

I must agree. Coincidentally, my favourite games on  the PSP are exactly LocoRoco 1, 2 and Daxter, in that order. Go figure right?

Edit: I have yet to buy Patchwork Heroes, but I absolutely fell in love with its demo. It's so silly and fun! Typical SCEJ. :)

I think this was a problem as well because most of the psp's games are just scaled down counterparts of their home console brethern. If i've played god of war why would I want to pay for it again to play on the psp?

I think it is a problem for the sales, but personally I quite like that. I don't use my PSP for short journeys, I use it for when I go away for long times so I like having a larger scale game to the more portable game.

In fact, my favourite PSP games are actually Final Fantasy VII and IX which I am playing now. Having said that PSP designed games are generally slightly better, but SCEE and SCEA's efforts have still been very good

Screw SCEA and SCEE and their graphic whore games , SCEJ is what actually matters

Isn't that God of War PSP game one of the best selling PSP games?

I can only speak as a non-psp owner: as there is no single "must-have" game for me, the price puts me off much more than the library.

In fact, I'm not sure I have ever even seriously looked into what the library for the system is, as when I see the price, my first thought is: "price needs to come down".

I wonder though, do you think what you've noted has more of an affect on the people who already OWN a PSP (i.e. they doon't buy much software for it)?