The PlayStation and PlayStation 2 were some of the biggest success stories in the video game industry. Not only were they among the first game systems to sell over 100 million units worldwide, but their use of multimedia and Sony completely rewriting the book on third party relations knocked the former home console king, Nintendo, off the throne. Nintendo was still sticking with expensive media and archaic licensing policies with the Nintendo 64 and launch of the Nintendo GameCube, which caused developers and publisher who once backed their consoles like Capcom and SquareSoft, to shift their focus to PlayStation.

Sony wanted to carry its success with the PlayStation brand into a new market, the handheld market. The one sector of the video game industry that Nintendo had effectively ruled with an iron fist for most of the 90s and early 2000s. The PlayStation Portable (PSP) was announced in 2003, and was fully revealed and released one year later in Japan in 2004. Nintendo responded with the Nintendo DS the same year. On paper, it seemed like Nintendo didn't learn anything from the last two home console defeats. Once again using a more expensive proprietary game format that couldn't hold as much as the PSP's optical UMD discs.

Yet against all odds, the DS was a hit... a massive hit. The second best selling game system of all time at 152 million units kind of hit, within a 3 million striking distance of the PS2 kind of hit. While the PSP was a decent success in its own right at 80 million, Sony's plan to dethrone Nintendo in the handheld space didn't pan out the same way as it did in home consoles.

So why wasn't Sony able to repeat its dominance in the console market with the handheld scene, even when Nintendo had inferior hardware technically? Well it was a combination of Nintendo utilizing its tried and true formula for handheld success (Cheap, easy to develop for hardware with a decent battery life, quality exclusive games, and an affordable price), the innovative features of the DS with it's touch screen and mic. But also, I think Nintendo had a better understanding of the stakes this time. A big reason Sony gained a place in the gaming industry was because they took advantage of Nintendo's hubris by aggressively courting third parties with more favorable licensing agreements very early in the console's life. Meanwhile Nintendo just arrogantly assumed developers will come to N64 on the strength of the Nintendo brand alone, and made little to no effort to improve those relations before launch. That, combined with CDs and the 1-2 year headstart Sony had gave them the advantage with 3rd parties.

But Nintendo avoided that mistake with DS, and shopped system around to publishers and developers as early as they could to get ahead of Sony (just look at the third parties already pledged support to the DS at its E3 04 reveal). The DS was also way easier to develop for than the N64 (which was made hard to develop for on purpose mind you), and while the Game Cards may have been a bit more expensive to produce and held less than UMDs, they were still nowhere near as bad N64 cartridges. Plus, the rise of cheap, readily available compression tools and flash memory coming down in price meant the storage differences ultimately never mattered that much in the end. Plus the lack of a disc drive allowed the system to stay relatively durable with low heat consumption and a good battery life compared to the PSP.

So while the PSP's power and media format helped it gain some important exclusives not possible on Nintendo's handheld (Monster Hunter most notably), Sony also didn't have the same monopoly on third parties that they did with the PS1 and PS2 with just as many companies supporting the DS as well. In fact the DS and PSP gen is perhaps one of the only times we ever saw Sony and Nintendo actually be competitive with each other in terms of third party relations.

In a way, it was as DS had the better format for handheld gaming and the disc format was the wrong format for that. A disc drive in a portable console is s shit idea. Not to mention memory sticks lol. DS was also cheaper and appealed to a wider net with the gimmick and IPs like Pokemon. Nintendogs. Brain Age. Mario Kart and such. PSP came across as poorer versions of PS2 games you probably already had in the early years.

Wow.  Yeah, nothing else to say.  Nailed it.  I couldn't get into the PSP because it was a ps2 lite.  The DS had unique offerings compared to home consoles.

Well stated.

It took a while at first but Nintendo marketed the hell of the DS (especially with DS Lite and Wii) and they really made it clear that anyone could play it. When did anyone before that try to sell gaming to grandparents or what we now call boomers? I don't think it had been done before but Nintendo really made the uniqueness of the DS stand out and made quality games that appealed to different people, I remember Brain Training used to be huge and many 3rd party games came out that used the dual screens and stylus. It wasn't very powerful for the time but still appealed to traditional gamers as well as Nintendo's 1st party was always strong on handheld titles. Pokemon was still huge at the time of DS too, those games are getting very expensive now. The DS (unlike the 3DS at launch) was also very affordable, I remember it cost £99.99 for many years, imagine getting a system at this price now! Also in a way the success of the Wii made the DS even more successful.

I grew up on the PSP and it pretty much got me back into gaming as a teenager but the games as awesome as they were smaller versions of what were on the PS2, they were fewer new IPs on PSP than DS, many PSP games were designed to be played for hours at a time rather the bitesized DS games. I hate to say it but the DS was the better system, much stronger battery life and more portable, UMDs were cool for the time but not ideal for a handheld. But given Nintendo's dominance in handhelds basically since the original Game Boy, the PSP still was a valiant effort. The PSP sold more than the 3DS.

Leynos nailed it.

Also, Sony never understood the portable market quite as well as Nintendo did. They approached the PSP in the same way they approached their home consoles; make it powerful, load it up with multimedia features, rely on third parties to sell it.

Nintendo understood that a low price point and accessible pick-up-and-play software are more important to a handheld than power or being able to watch movies.

It's not that PSP was a bad system, it was just less appealing as a handheld to the casual consumer.

Straight to the point.

Bottom line: PSX beat N64 because Sony beat Nintendo in the lateral advancement game. Sony, now the top console maker, then created their own game - the iterative power advancement game using much the same setup. But in handhelds, Sony skipped the lateral advancement step, and that step was taken by Nintendo - Sony lost because the PSP seemed like a more powerful Gamegear (already a losing strategy), but the DS and its touchscreens, rubbed off feeling fresh and more advanced, and with the SD Lite in 2006, looked the part with its sleek design.

Here is a more expanded explanation on that:

The N64 was when Nintendo temporarily forgot who they were. While Nintendo did revolutionize 3D and interface, they also began chasing power with the N64 and were no longer using the cheapest tech. While the PlayStation was a more expensive machine, the N64 had significantly more expensive software media. More or less, PlayStation (the PSX at least) beat Nintendo at their own game - using older technology in a better way - The PSX controller advanced on the SNES design by adding a couple more triggers, and later Sony ripped off the N64 analogs around the FF8/MGS era, and created the most used gaming controller in history - a cross between SNES and N64 controllers with Sony’s own advancements. After the PSX beat the N64 at Nintendo’s game, the PS2 beat Gamecube at Sony’s new game - iteration and power - “beat” is an understatement, PlayStation 2 flattened the Gamecube into a kindergarten doormat after Nintendo’s lousy strategy.
It’s no mystery - GameCube didn’t come off as a Nintendo hit, it came off as a kiddy version and competitor to the PS2.

Luckily, Nintendo learned, and made the Wii. And, instead of coming off as a PS-like machine, Nintendo had something feeling fresh and advanced, without the need of the ultimate power. This was Nintendo relearning what they stopped doing. But the relearning was first put into practice earlier than the Wii, on the handheld side…

Gameboy, but it had a background: the NES was a major hit because it was a lot more affordable than the competition at the same time as bringing in more intuitive/less esoteric (for lack of a better term) controls using technology that was considered older, but also much easier to manufacture despite its new uses(mainly thanks to interface) - and it actually goes even earlier than this with Nintendo’s arcade contributions, but we’re already getting drawn out 😎. Gameboy did the same thing, perhaps more effectively because no one was doing handheld consoles at the time, but the little devices with the cheap built in games were becoming very popular… and you know how the story goes - Nintendo sees an untapped market, and Nintendo tapped that like Scarface (“this town is like one great big…”). Gameboy did it better with withered tech.

The PSP might have done a lot better against the GBA because it would have come across as a more advanced and appealing device. But Nintendo went back to their roots with the DS, and nullified that notion of a more advanced Sony handheld. First, Sony had the “discman” brand, and everyone knows how that turned out - many bought them, and many ended up with skipping scratched CDs, and then MP3 players replaced them overnight in the autumn of 2001, capitalizing on a new demand created by Napster 2 years prior. Power wasn’t everything in the tech race anymore, Nintendo moved back into the lateral advancement space, and beat Sony. Unlike home consoles, the power advancement game wasn’t as appealing as the lateral advancement game.

PSP was in many ways Nintendo Switch without Nintendo games. Think of "ok but how good would br Switch without Nintendo own games?" The answer is PSP, it was mostly for players who wanted good games in portable format

DS was significantly cheaper even for developers. This was the generation where Japanese devs were struggling to catch western devs, so DS offered an opportunity to keep in the market since they couldn't develop for PS3 and Wii was... well Wii. Not everybody knew or were interested to learn how to work with crappy motion controls

This was enough to provide DS enough games. Nintendo even had the foresight on adding a dual screen to prevent their games could not be ported to PSP, it was a brilliant move that secured a more dry third part support to Playstation

Sony developers didn't know a thing about creating good portable games (or any good game for that matter but I digress). If they could at least release 3 or 4 good IPs in the same way Nintendo does I'm sure PSP could have pulled something in the 100 million and even removed for market share from Nintendo, but it's Sony we are talking about lol

While I think I can agree with some of your points, there are big ones that aren't even close to the mark.

1. Nintendo was already making good games in portable format, that's why handhelds were so popular. The goal of the PSP was to bring higher fidelity graphics to handheld, as history has shown from the 1980s to present: that very often works against having great games (I'd say the brief golden age of pre-rendered games like the DKC, FF7, and RE2 type games was probably the only time where this seemed to be the exception). It was Nintendo that advanced the gameplay possibilities by adding a touch screen. Nintendo was more successful.

2. The PSP was not only a Switch without Nintendo branding, it wasn't even the same type of console as the Switch. Switch is a hybrid with both a home console and handheld mode - it can double as a Wii-type home console, or SNES/NES style. PSP was an old fashioned handheld without even the advancements of the DS (let alone the Switch); it was more in line with the Gamegear and GBA with higher power.

3. The majority of devs made games for both the Wii and the DS, not one or the other. Nor was the Wii crappy, if it were, it wouldn't have sold 100m units and 1 billion pieces of retail software. It advanced in a better way for the 2006 market than the PS3 did. Granted, the gyroscopic Wii Motion+ had issues (I wasn't a big fan), but the earlier accelerometer and IR motion controls were great, and resulted in some of the most popular games of all time - killer app level (something neither PSP nor PS3 had with what Sony was doing that gen). In any case, I agree with you on the gyro controls of the Wii Motion+ era

On the gyro vs accelerometer games - look at what motion games Nintendo fans were playing and even still buying in 2017, almost a half a decade after the Wii - it wasn't the gyro games, but the accelerometer and IR games. The IR versions of games are still considered great to this day; IMO, they still work better than the Switch gyro-aiming. Although, I think the tech is mostly there now, particularly with some VR controllers - perhaps we'll see it in Switch 2.

Because handhelds and dedicated home consoles were different markets. It's why sales were never directly compared... until recent times (for some inexplicable reason).