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Edit: Dang I had witten a long post that just vanished. Oh well.

My main points were that I think in order to actually outsell the 3DS the PSP2 would need a significant price advantage, a unique and easily marketable feature, to launch by the end of 2011 or 3DS will have to big of a head start, and for Sony to develop new handheld specific franchises that can sell more than 5 million units.

I don't think all of that will happen. But the PSP2 can still be profitable and a worthwhile investment. I think Sony should be more concerned about profiting off of PSP2 than gaining marketshare. I suggest selling hardware for a profit from launch, working hard on reducing piracy, and developing some new handheld friendly franchises.