The real reason: quality of software. The gap is larger than the gap between any two systems in any generation ever, and expands pretty much daily.

Whell deadtOm, if it's quality, then why does Metacritic says quality is about the same :

There are 16 86+ rated games on PSP, 19 on DS, and that's even before gran turismo, lbp, gta, mgs, which are all incoming on PSP.

Wow.  There's so much wisdom in this thread that I can't even begin to grasp it all.  Let me review what I've learned so far:

S.T.A.G.E.: The reason the PSP is not outselling the DS is because it only appeals to male and core gamers.  The PSP is like a handheld PS2.  The DS appeals to casuals.  I guess this means that the main demographic of the PS2 consists of male/core gamers.  Xbox and GC must have had all the women and casuals.  But why have the numbers switched?  Why is there a higher percentage of casuals now than in the past?  Maybe he'll save the answer for his next wise thread.  And of course, the DS's superior library and touch screen has nothing to do with why people prefer it.

Squilliam is funny.  But I already knew that.

WheelStriker: The DS and the PSP are not in direct competition.  And here I thought that the makers of both handhelds are aiming for gamers that wish to have a portable system.  Never mind the fact that they share many multi-platform titles.  Silly me.

Seece: A system has to be dumbed down for it to appeal to women.  This is the smartest person in the thread.  A simpler interface couldn't be made to draw in, say, people new to gaming?  Or new to technology in general?  Maybe old people.  No, ladies and gentlemen.  It's because women are dumber than men.  Just because you prefer men doesn't mean you have to put down women.  It's nice and all that the PSP is better to you, this isn't true for the majority.  Keep that in mind little boy.

Tony_Parker: The DS is a casual gamer console while the PSP is a hardcore gamer console.  Also, some of the people that purchase the DS have never heard of the PSP.  I feel terrible for these people that were forced to buy a DS because they didn't know of the superior produced that is the PSP.  his further explains why the PS2 was so successful.  

digitalentourage: People mostly buy the PSP to pirate it but it sells the most core games.  The Wii and the DS do not cater to gamers, but to people in a transitionary period and non-gamers.  Core games do not sell well on the Wii or DS.  Brawl is not a core game.  Mario platformers are not core games.  Sony products have ZERO casual appeal.  And the ever classic: the Wii and DS are not video game systems, but toys.  This one made me lol.  People in a transitionary period?  Wtf is this even supposed to mean.  And I still don't get how a person can play games and be a non-gamer.  One of life's mysteries I guess.  "Core games do not sell well on the Wii" was particularly funny.  But then again, Mario isn't core according to you.  And once again the PS2 (and the rest of the entire PS family) is 100% hardcore.  Lmao.  You 'hardcore' players sure do love your SpongeBob.  Last but not least, video games are TOYS.                                                                                                                                                                                                                                                                                                                                                                                                                                                So much foolishness and this was only the first page.  

Says the person who doesn't own any PSP games.

psp was never going to catch up to the DS with the gap today even if they somehow got a god to market the console. That fight has been over for a LONG time.

The psp is doing fine "hardware" wise, and in japan its software is selling amazingly well, the problem is the piracy and software sales in the west..

I do think that PSP hardware can be higher especially in the U.S, nothing a little advertising couldnt do, after all the PSP offers far more than just games.

If you GAVE ME a PSP for free, the only game I'd even take time out of my day to play would be Kingdom Hearts whenever it finally comes out.  Most of the stuff on PSP just doesn't appeal to me in the least bit, especially considering how much of it is just handheld versions of PS2 and PS3 games I had no interest in to begin with.  If you enjoy it, more power to you, but if only people who own a PSP are allowed to not like it, then the sales numbers make it pretty clear that hardly anyone dislikes PSP :P

@deadtom : if you gave me a DS for free, I'd give it to my children with Pokemon games.

QFT.

They do lol. Actually I bought one for my nephews last christmas. ^^