[quote name='opportunity777']I don't understand how you can say at all they are not competing with each other, and then go back yourself after the yellow portion and say that Nintendo is trying to squash the competition.
Obviously, they are competing with each other. The target market may be different, but they are both "high-end" portable gaming machines that display 3D graphics. Even with a different target market they are still direct competitors because the markets are not exclusive.
What you said in yellow is like saying the GameCube doesn't compete with the XBOX.
Besides that the rest of your post was excellent you and you made a good point about the Value Pack and the pack-in game for the DS

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Well personally I do think they are in competition but I know a lot of people get angry with that scenario. The way I look at it is they are gaming systems primarily. Regardless of specs you play games on them. If people buy the PSP solely for an MP3 player or a video player that is just dumb because there are better options for both out there. I think most would agree.
Now you could say that the PSP is a level above because it more closely matches a PS2 where the DS matches a N64 so it is no competition. However in the portable race the systems have always had a gap in capability until now. So it is really yet to be seen if that difference in technology will affect the outcome.
Now this is my opinion:
I have a PSP and it is sleek as hell and runs like a monster. A true console experience in your hands. Being as that is it has a few things that don't make sense for a portable. The battery life sucks.....now I am not amongst the group that complains about it because like most would say I can just charge it every night. I do however feel, like I'm sure most would a better and longer battery life would be welcomed with open arms. Load times....they suck....I got rid of THUG 2 Remix because they were just too damn long. I realize that it takes awhile longer to load a Tony Hawk level into memory but I don't always have that time while playing a portable. The suspend feature is good but the battery life doesn't really support it.
The games are great and they look beautiful. However if it wasn't for Hot Shots Golf I may have already traded the system in. Well if the games are great and look beautiful why? Most of my console purchases are based on the sole fact of the what I'm missing by not having it feeling. I jumped on the PSP because well I had a shit ton of credit and I wanted Spider-Man 2. I got the PSP went Holy WOW this is sick and then beat Spider-Man 2 in a few hours. Then I looked at the other games and while they are all great in there own right there aren't any exclusive titles that made me jump. I realize Lumines and MGA are some great games but just not my flavor. Although playing games like Prince of Persia and Devil May Cry on the go would be cool, if they aren't different enough from the PS2 versions I'll be let down. I usually try and mix up my gaming so nothing gets stale but if I'm playing Devil May Cry 3 at home and Devil May Cry on my PSP its going to get old fast.
Now the DS...I know that when most people see the system they think what a weird gimmick. What is up with that 2D crap? Well just like the PSP everyone is awaiting new games. Although we know the touch screen isn't anything new the software they are creating around it is. I got the chance to play Pac-Pix last night and although it did seem kind of like a demo I can honestly say I have never played anything like it. That is what pulls me in. Maybe it is all a gimmick but if it's fun then why not? I also dig 2D gaming. I know some people are instantly turned off by it but I can't just turn away from something that has given me so many years of enjoyment. If the game is good I'll play it. That's not to say I don't enjoy 3D either. The main draw for me of the DS is it is something different.
In the end it comes down to the games. As of right now the DS has games coming that I want. I think the PSP really just needs more exclusive titles and some non-PS2 type games to get it going. They need to set their minds to portable rather than power. I'll agree it is funny that a new 2D super mario bros. game has me excited but I can always go back to Super Mario Bros. 3 and have fun playing it so maybe replay value is where its at. Maybe I'm just crazy....it doesn't matter it's all an opinion anyway.