The magazine EDGE believes that "third parties are abandoning" the Sony PSP. This comes from the remark made by Sony's worldwide studio executive Shuhei Yoshida who is quoted saying: … It's really, really disappointing and it's a lost opportunity for the third parties,” . He goes on to cite examples of successful franchises.
Anyhow, this graph (right) from the magazine would suggest that PSP developers are less prolific. Normally, the number of titles should grow year over year as developers and publishers try to leverage their expertise of the platform. I agree with the fact that there seems to be less titles (and cool ones) coming out for PSP.
This is a business problem: I've heard developers/publishers complain about piracy issues with the PSP 1000 and PSP 2000 firmware. The PSP 3000 might stem piracy a little, but who knows for how long? Sony has to reach out to convince developers that they can make money one way or another. It can be marketing help or more financial incentives (royalties) - all the "proven" recipes. Will Sony do it? Probably: now that PS3 is doing ok, the PSP's priority just went up.
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[Source: Ubergizmo]