Let me see:
Software:
The PSP2 won't have the same total monopoly on certain types of core software support that the PSP did. Infact given the early advantage of the earlier launch for the 3DS and the core games coming from Japanese publishers in particular and their emphasis on 3D. By the time the PSP2 launches the 3DS will probably already have a significant library in the genres and catering for the core market Sony wants to attract with the PSP2. This issue is extended further when you consider the multiple 20M plus selling franchises than Nintendo possesses.
The wild card here is direct download and the relative pros and cons. They could potentially price software significantly lower than the 3DS depending on publisher deals. However the weakness here is consumer reluctance to download expensive software, credit cards, bandwidth and space restrictions. By being direct download only AFAIK, Sony is able to price the downloadable games competitively against the retail competitors, especially against Nintendos Flash based games which are significantly more expensive compared to current iTunes games.
The market:
By the time the PSP2 launches the 3DS will probably have at least 10M units sold and likely no matter what the PSP2 is the 3DS will extend that lead to 15-20M by the end of the 2011 calendar year. Nintendo has particularly massive mind share in the handheld space. There are many people who would consider a Nintendo handheld but would never consider a Sony handheld. This is effectively the last generation of consoles where the market leader from the previous generation launched earlier than the main competitors and gained significant support whereas the more powerful folowup consoles could not compete with the same market dynamic.
There is also a spanner in the works above. Now there are multiple hardware devices which are competing in the same or similar markets. On the one hand you have the iPad all on its lonesome on the one side of the market with the massive screen which the PSP2 cannot compete with on size or utility nor mindshare. On the lower end theres still the DS which will be priced cheaply with a massive library of games and in the middle you have various iPhone/iTouch devices which the PSP2 would have to compete with for peoples pocket space. These smart phones are getting bigger and even my HTC Trophy 7 3.8" is quite a large phone, I would hate to carry another device with me especially when its main selling points can all be done on my phone. Microsoft can probably now be considered a competitor in the mobile space as well given the fact that Windows Phone 7 has a strong emphasis on games.
Lastly in terms of price the PSP2 probably cannot get away with selling a direct download handheld with ridiculously low margins. Apple can get away with 8% or even lower but Sony probably cannot get away with anything less than 12% and probably 16% is the target number for retailers given the fact theres no initial expection for the device to be the next big thing for Christmas. Either Sony subsidises the hardware or they price the handheld at rediculous levels. This takes away money they could have spent advertising their new handheld. Consider how much Microsoft is able to advertise for Christmas and still make a profit, this is because they sell their hardware at a good profit and have already profitable services. Can Sony claim the same thing?
Tease.
