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Personally, I think PSP failed because it didn't differentiate itself from the PS2 enough.

It's basically a ps2, with crappier graphics, small screen to play on, smaller speakers. But it failed because it's supposed to be a portable device, not a PS1.5 (which is what it really is). It's screen is far too big and it's too heavy (rectified with the slim, but too little too late imo).

Also, unlike Nintendo, who has always had a healthy lineup of pickup and play titles VS lengthy, highly involved titles, PSP games have always been known for the latter OR they were sport games (which are pick up and play).

Personally, like the xbox 1, I don't think the PSP is really a failure, it's just its competitors were just so much better.