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Grimes said:

I know a lot of people here are going to be excited, but the thing seems too complicated to move beyond the current PSP base. I mean, how are you supposed to play games? It could be front touch, back touch, sticks, buttons, motion or any combination. That excites the techie people, but could be very confusing to average people.There is nothing at all in this device that makes the PSP more accessible for the average person, except maybe the touchscreen, but that's somewhat lost amongst all the other controls.

You make some really good points here.

I think the price basically HAS to be prohibitive.  Can Sony really afford for this to be a loss leader when competing with, not only legacy handhelds and the new 3DS, but also smartphone gaming???  $300 .  Good God ...

Also I really don't think that console-lite games are going to appeal to anyone but the PS fanbase.  Is that enough anymore?  

The PSP is far from a failure, but to sell so much less than its weaker competitor sure made it look like one a lot of times.