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Leynos said:

Even tho somethings like Move never lived up to potential. I have to say the worst is UMD. In theory, I understand the concept, but they allowed you to use Sony memory sticks and supported video formats from the moment you started using the PSP. So out of the gate, PSP UMDs were useless. Not to mention, this is a device in your pocket. People don't bring a bunch of movies with them on the Go, and if it's between a game and a movie, carrying a PSP is going to be a game. It was a case of just because you can, does not mean you should. Sony was still in that era of trying to force new physical media formats and failing. Blu-ray is the only one they ever succeeded at. PSP should have used cards like DS. 

With regards to games, UMD at least made sense for the "home console on the go" angle Sony wanted to achieve at the time. It offered high storage capacity for a relatively low price in 2005.

The reason the DS managed to pull through in the end with its card format though was because by 2005, compression codecs and tools were becoming cheaper and more readily available to developers. Add the fact that the DS cards generally had higher capacities than N64 Cartridges at lower prices and any storage advantage the PSP may have had ultimately never really mattered that much in the end. Flash memory was rapidly crashing in price throughout the late 2000s, rendering UMD ultimately pointless after a while, which is why PS Vita ditched the format entirely.