I know quite a few adults who owns a PSP but not a DS.  They have one thing in common: never own a gameboy.

funny how you fail to see that the xbox the gc and the ps2 were all marketed as video game consoles. which means they are indeed direct competitors.

on the other hand, the ds and the psp are indeed both handheld game machines which are marketed to different demographics.  hence sony's claim that they are not competing with the ds as the psp is being marketed as a multimedia handheld machine.  since both sony and nintendo are targeting different markets, it can be said that the two are not direct competitors. but due to the nature of their producs, which are both handhelds, they are still indirect competitors.

Did Sony make any money off that music and video? I'm guessing most people pirate or copy from their existing collection.

I'd imagine the profit margins are quite poor on hardware, compared to the DS and iPod. As far as making money as a hardware platform, I just don't see it being a big profit generator. And if they don't make much money off of games, video or music, where do they expect to really profit if hardware profits are small relative to the industry?

now matter how much they deny it, the ds is it's direct competitor. sony built the psp with its main focus on games everything else is added features. if the psp was in the the lead im 100% positive they would be saying the exact opposite.

you never compete with people your losing to

 not yet, i spent the ds money buying MGS4, i'll get one soon though.

Do you ever get the feeling that the people who were actually responsible for the success of the Playstation and PS2 ended up leaving Sony (or potentially forced out)?

It seems like they abandoned wat worked so that they could pursue their current direction of highly powerful entertainment centers ...

Nintendo says they aren't competing with everyone else because they're on the path of disruption.

Sony says it's not competing when it's convenient for them. Phil Harrison made those comments because he was underestimating the DS and thought the PSP would trounce it handily.

Another tidbit of Phil's: "with the DS, it's fair to say that Nintendo stepped out of the technical race and went for a feature differentiation with the touch screen, but I fear that it won't have a lasting impact beyond that of a gimmick - so the long-lasting appeal of the platform is at peril as a direct result of that."

Of course, as Nintendo and the DS decisively handed Sony and the PSP their collective asses, they're in different markets. It's the same thing with Wii vs. PS360.

grafix and sounds to matter in a gaming machine. if it didnt then there would have been no need for nintendo, sega, sony, and microsoft to develop more powerful machines which can render better graphics and output better sounds.  through out gaming history, graphics and sound has always been improved with every new game console.

you may argue that the wii is currently kicking both the x360 and ps3's asses and it is the least most powerful machine of the three. but take note, wii graphcis and sound capabilities are > gc (though i dont know by how much as i dont have a wii).

now functionality does really matter for a gaming machine if gaming is all your looking for. but if our on a budget or you have a limitiation in space, having an all in one device would be a nice addition. 

as for gaming, i say, to each his own. those who prefer the psp over the ds obviously like the psp games better and those who perfer the ds would obviously prefer ds games better.