The PSP install base is pretty much made up of pirates. A console like the DS, Wii and even the PS2 was supported by millions of casuals who wouldn't have a clue about how to pirate a game. The PSP was aimed at a more hardcore and tech savvy audience that probably has a better idea of how to take advantage of the system. It also doesn't help that the PSP is more popular in countries that usually can't afford to buy software, which means that people buy the console, but they'll never buy a game for it.
You're contradicting yourself a lot there.
PSP is more popular but sell less?
PSP are more "hardcore" than the DS? You haven't seen DS library?
You're also saying the tech savvy people are pirates. The same tech savvy people that are willing to spend large amount of money on hip-new-gears?
And by "take advantage", do you mean they make full use of the system and enable features that weren't included by Sony themselves? You're saying Sony intentionally nerf their PSP to force these tech savvy into piracy?
Sony blamed it on piracy and you ate it all up.
I never said the PSP sold more than anything, I'm saying that in Third World countries, the PSP is most likely bought to be hacked and because Sony release their consoles to a larger variety of countries than both Nintendo and Microsoft, piracy effects them more.
I'm not saying the PSP is more "hardcore" in terms of games for the system, I'm saying that the same people who are willing to pay the high price for the PSP and know how to take advantage of the system are most likely 13 to 25 year old gamers that have a basic knowledge of how to do these things.
I don't get your second point, people with the knowledge of how to mod and pirate games for a PSP aren't going to be your average buyer.
They take advantage of the system by allowing you to play pirated games, I'm pretty sure Sony ( or any other company) doesn't want that to happen.
Sony blamed it on piracy and I believed them because I've seen it happen so many times in Australia. From my experience, the PSP is bought by males between the age of 13 and 25, every single person I've seen that has bought a PSP has it modded straight away, most of them bought the PSP with the intention of modding the system. They didn't do it because the PSP had a lackluster library, they did it because they can get games for free and it was extremely easy. The DS, Wii and PS2 have been very lucky that they have reached out to a different audience, I doubt 5 to 12 year olds would have any idea what piracy is, the same could apply to the older markets that Nintendo has captured. Piracy still exists on those systems, but they still have millions of people that are willing to buy games legally.