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If only Sony would listen to Michael Pachter, then everything would be better for their handheld. Insisting that Sony has already lost the competition to Nintendo's DS, he proposes that they should actually take a page out of the DS book.

"I am completely baffled by Sony's PSP strategy. They owned the portable entertainment with Walkman, and sat back and watched as Nintendo dominated games and Apple dominated music.

They never quite got it right with an MP3 player and their initial effort in games was a bit too pricey and sophisticated for the majority of the portable gaming market - kids under 13. They have a new ad campaign with a kid as a spokesperson, so I suppose we should wait and see if it works."

Asked what he thinks could have been the problem for Sony and the PSP, he answered that it's the pricing. "[B]ut if the 3DS comes out at US$ 249, the US$ 169 PSP might seem like a bargain. If Sony were really smart, they'd emulate the 3DS and put a 3D screen on the PSP2."
Source- industrygamers