Nintendo doesn't have to do anything for the DS really beyond creating amazing games and making sure it doesn't cannibalize too many sales for other 3rd party games.    Nintendo is already drowning in royalty money from the sales of 3rd party software, they just have to keep releasing new Nintendo games to keep core fans and stockholders happy.

I think PSP's gotten a not so positive light as not too friendly portable gaming system, ie. portable mutlmedia system that can play games. The new price will help spur sales for core gamers who always wanted to play PSP games and portable multimedia enthusiasts, but unfortunately not so much the casual market who are really vital for PSP.

The PSP has been slowly but surely selling in decent numbers....okay compared to the DS it is night and day, but if you consider the PSP has been virtually double the price of the DS since it's release and only now is getting closer to the same price level...the PSP has done well.

The pricecut will probably help with the sales of PSP over the next few months through the summer until the big games get released.

Dec 05 - Mar 06: 1.2m, 208k, 202k, 203k

Apr 06 - July 06: 195k, 194k, 234k, 170k

Aug 06 - Nov 06: 155k, 170k, 138k, 437k

Dec 06 - Mar 07: 1m, 256k, 189k, ????

As you can see, the sales from early this year are not too dissimilar to last year...although are slightly down.  Although I reckon with the release of more better games, and a more affortable price level, we could see an increase in sales over the next 3-4 months....I think we'll see an increase of around 10-15% in sales over the forthcoming months. 

Judging after amazon the price drop has been well received ,the PSP is again between the 15-20 more sold articles from its 35-45 place prior to that .THe PS3 is also selling well in amazon by the way ,when they have stock it is always in the top 15-20 .

According to Kotaku PSP sale went up.

"In the the first two days following the PSP's price drop there was a 300 percent increase in the number of the portables sold."

http://kotaku.com/gaming/feature/feature-the-year-of-the-psp-250775.php&cid=0&ei=GiocRsf1EZL-sgHWnMzVCA

Good.

EDIT: BTW how can I make a "nice" link instead of this...

It won't have any effect on the DS but it WILL increase sales I believe.

Still a touch pricey but a lot more affordable now for those who have been holding out.

The library I've heard has improved too so the price drop is right on time.

John Lucas 

That kind of sales increase is expected whenever a system has a price drop; people who have been waiting for a price reduction say "This is as cheap as it is going to get for awhile I might as well buy it now" and you see a massive sales spike. In the following weeks we will see the PSP return to similar (but somewhat higher) sales to what they were before.

I knew that you will be  one of the first non-impressed

I have a feeling that if DS sales show a hint of slowing, Nintendo can and will drop the price to $99. Heck they could probably drop the price to $79 and still make money. The fact of the matter is at this point the PSP can't win a price war against the DS. The PSP can do well but Sony shouldn't push Nintendo too hard lest they kiss any hope of profitability goodbye.

 There is no way ninty is gettin out of the handheld market, what is wrong with you?

 No it just means that they see that the DS is fine without them focusing everything on it on it, its achieved that base where it will keep rolling on with mostly third party support and some first party support, it means that Wii needs more focus because it doesn't have that base yet, duh