No doubt it was a success but it's kinda surprising though that it never managed to get a game to sell over 7 million. Even the Gamecube and Xbox managed that on their tiny user bases.

Success in the hardware department, underwhelming in the software department. Nevertheless I'm sure it gave Sony a nice profit, something PS3 hasn't done.

This is how I feel about the PSP.

The software was severely lacking compare to the DS and GBA anyways. Only exceptions being the GTA games and Monster Hunter which really sold gangbusters.

didn't Kaz Hirai claim something along the lines that they aim for the PSP to 'take handheld gaming out of the ghetto'.  If anything, it's the DS that has done that, not the PSP.

Don't get me wrong, I think the PSP has been a moderate success, just one that is compared to the much larger success of the DS.  But, when one considers the things Sony had going in their favour at the start of the 7th gen handheld wise (media hype, Nintendo scrapping very successful 'Game Boy' brandname, general success of Sony consoles, 3rd party support, underwhelming DS launch), it isn't hard to say that they didn't utilise those advanges in an effective manner.

Honestly PSP is my favorite handheld. I've played on the old GB's games like RE: Gaiden, pokemons, zelda's etc. The PSP to me had the best games for a handheld (although TWEWY and Chrono Trigger port were the only things worth while on DS). Lords of Arcana, God Eater Burst, Resistance Retribution, Phantasy Star Portable 2, Tactics Ogre, Killzone Liberation, God of War : COO and GOS, among many other games just blow the competition out the water in terms of quality and gameplay and I feel that it didn't get the sales it deserved. To me PSP with exception of Go, should have gotten at the very least similar sales to DS world wide. Sony's mistake though is not including dual analog and I feel it hurt the sales (probably not a huge deal breaker). At least Japan is recognizing the PSP's superiority because it's there, people just have to stop pirating.

http://www.bookrags.com/quotes/Kazuo_Hirai

"Some have said that the PSP is our answer to the (Nintendo) Game Boy. Well, here�s how we view the world: PSP will elevate portable entertainment out of the handheld gaming ghetto and Sony is the only company that can do it. We happily accept this challenge and, dare I say it, the baton has been passed."

Don't misunderstand me, I'm not one of those people arguing that the PSP is a failure/isn't a success.  In any context the sales it has and is achieving is very respectable.  I just think that the PSP could've been a much bigger success if Sony played their cards right, it had so much going it's way and I see that this reversal in fortunes isn't entirely due to actions taken by Nintendo.  I do hold the view that announcing the PSP at E3 2003 wasn't the best idea as it allowed Nintendo to in many ways rush the original DS out ready to compete with the PSP upon launch.  I believe if Sony hadn't announced it until E3 2004, Nintendo would've been ever more wrong footed and I doubt have been able to get the DS out before the PSP.  This would have benefitted the PSP in both 3rd party support and sales IMO.

as a hardware yes, as a sofware seller, no sadly, less than 5 games in  his generation pass a million in america, while the DS have even more than consoles

While it was a great success and it has a few games on it that I loved, it still couldn't compare to its competition.

If SONY had given it an early price cut and more games they could have made it great.

I would call it a modest success.  I really hope Sony has learned a few lessons from it.  

If Kaz meant ghetto as in shitty graphics and limited features then he was right and PSP was a great success.  

No, by ghetto he meant run down area often filled with drug dealers and violent gangs...