It's mainly a Japan thing.
In Japan, there are far fewer games that truely appeal to the J-portable gamer. You get old rehashes of Final Fantasy games, Tales of #1003567, hapless other junky games, ad nauseum. There is very little J-support in the way of MEANINGFUL games.
However, having said that, when real games come out, they do well: look at MHP2. That game is a friggin' beast. Despite the poor tier ratios, and rather tepid sales (compared to the DS), it's done real well.
In the US, we have good Madden, Killzone, GTA and a few other games, that cater to the US/Eur fanbase. No games = no sales.
I know it's clich'e but "wait until FF:Crisis Core" to really judge their sales. FF:CC should do great (500k+), which should be considered a succuess.
Really, the main reason is Sony really doesn't give a crap about luring devs to the PSP, and creating Nintendo-like first party IPs on the PSP. There are no truely unique titles on the PSP. Nintendo gave the DS Touch-Gen titles - something totally new, fresh and innovative, JUST for the DS's strengths. What has Sony done that's really been meaningful in the way of strong support?
IMO, if Sony just woke up, and decided to put Lair, Heavenly Sword, LBP-class, or other similar-big new IPs on the PSP, and actually cared, it'd sell far better. PSP's sell when there are big name games out. Unfortuntaely, when 80% or more of your 1st party IPs are just ports, or existing IPs, it just doesn't cut it - look at the GBA. It got canned real quick when Nintendo started caring about unique titles on the DS, and not the same old crap. There is no "NSMB" or "Nintendogs". Just "GT5" and "GOW:PSP"...The same old (abliet big) IPs. NSMB was a totally unique DS title that was a return to 2d - and a true sequal to SM All Stars.
Sony could easily make the PSP far more competitive, but they aren't really trying. And it absolutely sucks since the PSP is a great, great divice. But for now, it's a media player 1st, and a gaming system 2nd.
Back from the dead, I'm afraid.
