I agree with Odonadon 100%. Sony won't drop it right away but in the long run Nintendo will still control the handheld market. I doubt parents are goign to drop that amount of coin for little Johnny's handheld system. Plus you then have to worry about scratching
a disc.
Will the PSP be better then a portable DVD player? I doubt it. Will it me a better MP3 player the a iPod? No
Will it be a better gaming system then the GBA? We shall see.
I think making it a CD based system will hurt some sales.
I think a lot of parents that spend 150 bucks on a present for little Johnny, won't have too much problems with spending 250 either. Especially because the 250 set comes with more crap (if I'm correct). Of course little Johnnyy will have to want the PSP more than the DS.
I also think that there are a lot more people that might be interested in the PSP than little Johnnies. I'm 22 and I'd like one, and I'm definately not the only adult.
And it might not be better than a portable dvd player, but it's definately smaller, cheaper and most likely with higher quality stuff. Those portable dvd screens are very very lousy, while the psp screen is beautiful. If you just want to look at something every now and then when you're in the train or bus the psp is great. You won't have to spend 200 bucks on a seperate system you have to drag along too.
And it may not beat the ipod as an mp3 player, but once again, it's cheaper and just an extra. And if you don't have an ipod yet it's a nice extra.
I think you should keep in mind that the psp isn't targetted at the technology freak that always wants the best. Take mobile phones for comparison. They're all loaded with crap like mp3 players and cameras and they sell like crazy. Sure, there are better mp3 players and better cameras and probably better phones too, but non of them offer the comfort of having it all at once.