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So if Graphics are what matters why is the DS winning agaisnst the PSP?

Piracy can only account for so much as an excuse, in the end ingenuity and innovation will always trump graphical power. It's the elements and mechanics of a game that make it eternal, not its graphics. A game's replay value, it's challenge, it's fun, it's creativity, it is things like this which make Goldeneye 007 one of the most beloved games of all time even til today despite its place in the video gaming fossil record.

Graphics are a facet of a gaming with an expiration date and only as good until the next game with better graphics come along. That's not to say graphics shouldn't progress what-so-ever, however when said graphics come at an exponetionally higher price tag with each generation it begs the question as to how much emphasis should be put on them especially when it affects how the production is balanced.