This "separate market" argument is being recycled at a surprisingly high rate lately on these board.

The fact that PSP support illegal download game without mod is so well know and wide spread also decrease games sells greatly. I dont own one but all the people i know who had one play download game.

If this is not the cause than the product definally attract the a different market which is sad for Sony since software sells is their strongest point in Ps2 and Ps1.

Ya that because the DS is selling too much

Btw i dont really think this argument full work since the chances of a person only wanting a handheld is about the chance of them wanting to choose only one system from this generation. 

Calling them seperate markets is a way of sparing the PSP the acknowledgment of defeat at the hands of the DS. Expect this argument to re-emerge when the Wii creates a similar disparaging gap between it and the 360 and PS3.

Re-emerge?  I don't think it really ever left.  Microsoft has been touting it for a while now.

There is no separate market. If I want a video game system, I look at all of them, and I buy a DS. The DS just won. What's the deal?

Technically they are seperate markets now that I think about it.

The Nintendo Wii and DS are in the Video Game Market.

While the 360 and PS3 are in the PC Gaming Market.

And the PSP is in the Blackberry / Mobile Communications Market.

Just because the Wii isn't getting most of the PC games doesn't mean the PS3 and 360 are PC platforms.  Nice stretch, though.  The PSP has been a successful handheld, even with the disappointment for Sony I'm sure.

That would hold more weight if the sales difference between the PSP and DS wasn't quite so large.