The DS hitting saturation point is the main reason. It still sells the most software and that software dominance is going to continue (just look at how many games the DS gets every week in Japan).
The psp's redesign and monster hunter have contributed greatly as-well.
PSP got aload of new JRPGs recccentley didnt it, thats probably a factor
Because people are upgrading from the DS to the psp.
and that DS is basically saturated there
Everyone buying a PSP already has a DS. The DS played the gateway drug in this scenerio. People loved handheld gaming so much, thanks to the DS, that they went out and bought PSPs. Thus, the 90 percent overlap for PSP sales. Nobody buys a PSP first in Japan. Even the MH otaku.
In a way, the PSP needs to thank the DS for its good sales. Saturation finally left room for another item in that market.
Thats like saying, in a way sony needs to thank nintendo because nintendo "saturated" the market with the SNES.
Monster Hunter. That's basically it.
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^also the redesign and that DS is basically saturated