Now to be clear, a software drought is never a good thing for any system. However, in the case of the PSP, I think there is a positive that will come out of this situation. A proverbial "diamond in the rough."

IMO, one of the problems the PSP has always faced is the perception that the library is a sea of over-priced garbage. This really shouldn't be a surprise considering all the sub-par ports and just downright awful games that were thrown on the formats. In the early days especially, publishers would release gimped games like Prince of Persia onto the system and charge consumers $50 for it. This left a horrible taste in people's mouth and probably spurred on the piracy movement.

This publisher approach toward the PSP causes two problems: A) the sea of crap makes consumers wary of buying games b/c they have been burned in the past and B) the huge volume bad games overshadow the few good ones. This also means consumer dollars are spread across a greater range of games. This is the same sort of beef many devs have raised with Xbox Live Arcade.

All consoles have had to deal with this same sort of issue, but rather than invalidating my argument, I think it goes to show that the PSP has more issues beyond this one (such as the huge piracy rate and the fact that people don't necessarily buy a PSP for games).

All of these reasons contribute to why the PSP software market is so fickle. IMO the drought we're seeing now is a market correction that's weeding out the crap. What we'll see now is overall software sales continue to spiral down, but we'll see quality games sell better than we would've thought. In other words the lack of games will concentrate gamers' attention to the few very good titles that are coming out, which will result in good sales. In turn we'll see some developers come back to the system, but they'll come armed with a new approach that's more suitable for the system.

I hope so.

LocoRoco 2, Patapon 2, Resistance: Retribution, Stardust Portable, Kingdom Hearts: Birth by Sleep is a great start for 2009 but there still needs to be more.

Sony kind of mishandled the releases this year as well. Crisis Core: Final Fantasy VII, God of War: Chains of Olympus, Wipeout Pulse, Patapon, Hot Shots Golf: Open Tee 2, Secret Agent Clank and more all in the first half of 2008 - Now there is no real exclusive for the rest of the year.

Honestly, how many successful third party games have we seen on the PSP in 2008? Or even 2007?

Atleast the PSP has a great catalogue of previous games to choose from?

A Positive Aspect of the PSP Game Drought. .. .. ..no more shovelware?

Have any other systems had improved software because of poor sales?

Well for 2007 and some 2008, Square Enix with Crisis Core, Capcom with Monster Hunter, Konami with Pro Evolution, EA with Madden and FIFA - but what 3rd party has PSP really been given in 2008 besides Final Fantasy? Even 2007 wasn't that strong.

And to be fair,  the majority of PSP sales from "Others" are missing.

Games based on summer blockbusters tend to sell well on psp (for example, iron man and transformers.)

Crisis Core, GTA, Monster Hunter, Metal Gear: Portable Ops are the blockbusters. Stuff like Lumines and FF Tactics have done well. Some of those aren't from 2008 or 2007, though.

I think part of the reason why 3rd party stuff hasn't done well has been b/c they've either been releasing crap or the few good titles like Crush have been too expensive or too overshadowed by their own garbage. If Crush were being released this fall at a Patapon-like price of $20, it would've sold in solid numbers. Even though new games have come down from the $50 standard to the $40 standard, I still think it's too high especially for new or obscure IPs. This is part of the "market correction" I wrote about. The only $40 games we'll see are established franchises, while all others will be $30 or below.

Has any other system had such bad software sales and such good hardware sales? The PSP defies historical conventions, Negative Nancy :P

Plus, I never said software was going to get better. I said we'll see less bad games, which will focus consumer attention more toward the few good games that are coming out. This in turn will mean those few games will have a better shot at selling well, which could attract a few more devs to bring games to the system.

Most likely those devs won't be able to get support from western publishers b/c their games have done so badly. But you could see more indy devs pitching ideas to Sony. The other possibility is that we see more Japanese games b/c of the PSP's resurgence in Japan. What those Japanese publishers will have to realize, however, is that they're not going to see good sales over here at $40/game.