The PSP is a success for several reasons. One, it is making Sony money. It is also making developers money judging by all the games that will be released this year for it (58). Sure Sony would like more software sales, but where other handhelds really pushing that much software? I know the DS is a software selling beast, but what where the other systems like?
Another reason is that games can be made cheaply for it. You don't have to have a game sell a million units and up to break a profit since games cost less than a million dollars to make. Even if the developers make $10 per game sold, at 100,000 units they made their money back and then some. That is a pretty low threshold to break to turn a profit on a user base of 30+ million.
Obviously the UMD didn't become huge for music or movies, but it must turn enough of a profit for Sony to convince MTV to sign on to release some of there stuff on it. The big thing the UMD did was make a solid platform to put the games on for people to use.
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