There really aren't any good games for it... So far, all I've seen are FF7: Crisis Core and Patapon which are both great. Everything else pretty much sucks.

Back on topic, I think there's a huge factor that hasn't been mentioned, PS3. Sony losing billions on PS3 certainly affected PSP's price (no price drops) and marketing money. It seems to me Sony are content with making profit off PSP's hardware, and have no further ambitions. Which is a shame, but there you go.

If it wasn't for Capcom and Square Enix, PSP would be nowhere near current figures. In fact if you look at the future line-up, you can see that Square Enix take PSP far more seriously than Sony themselves.

The competition. It's tough to deny that the DS has become the handheld for RPG's. Not to mention the avalanche of casual games to keep the ever-growing casual audience engaged for years to come. In NA, the DS has got star power (Carrie Underwood, Liv Tyler) backing it up while PSP TV adverts are scarce. There are several games on the PSP that blur the line between "hardcore" and "casual," but none like Mario Kart DS or Animal Crossing. Games like Lumines and Loco Roco are great, but have failed to impact the market like Nintendogs or Brain Training.

Just a few points just thrown together...

As a H/W point of view the DS is easier just to pick up and play, where as (which you already stated) the PSP has so many capabilities that it probably scares off a few people who just want to play games on it.

PSP is selling much better then I expected. PSP does not appeal to me that is why I am never going to buy it.

Sorry, but that's just ballacks. PSP has a superb liberary for most tastes.

Who knows, maybe a Gran Turismo PSP might help.

I'm almost positive it would. And what Quartz said is true as well, if someone who is unfamiliar with the PSP picks it up while it's on the application menu, they're more likely to put it down than to scroll around and figure out how to start the game. The DS has one screen and it clearly says the name of the game and even has a little picture if I'm not mistaken..

there r some good games on psp like gangs of london and the psp just never realy stood a chance because Sony were not known fo hanhelds and their opponents were

Piracy slaughters psp software sales. I know honestly that if I had one, it'll be pirated unfortunately lol.