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I don't know if you can "solve" the piracy problem, but maybe some unique hardware inside that makes it difficult for even an above average thief to steal a game would help immensely. Of course there will be assholes that decide to put a video up on youtube on how to do it, but at least the thieves would have to work to steal the games.

edit: and announcing a price drop at E3 isn't something that any of the 3 companies is likely to do.  And we were promised 12 new games at Leipzig, so expect some of them to be on the psp.