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The success of the PSP is a lot like the Gamecube. The Gamecube didn't lose money but many consider it a 'failure' simply because it got walloped by the PS2.

In terms of profit, I think the DS is absolutely destroying the PSP. Not only do I think Nintendo is making more on average per per hardware sold, but they are also making more profit on each software sold because they produce more first party titles. I'd guess that a first party title nets double the profit as a third party title.

So it's like a quadruple whammy win for DS.

1) Higher profit for each hardware
2) Higher profit for each software
3) Much more hardware sold
4) Much more software sold