I wouldn't waste my cash on the PSP yet. I think Sony is going to be really agressive with the PSP,but I also think Nintendo is going to get more agressive with the DS. And, fortunately for us, a competitve market should drive prices down. If Sony really wants to put the final nails in Nintendo's coffin, they'll think of a way to drop the bundle to $200 or less or release a stand alone PSP for $150-200 sometime soon.
As long as demand for either or both remain consistently high, I won't expect a price drop anytime soon. As it is right now, Sony cannot keep up with demand (the launch in S. Korea has been delayed for this very reason). Sony is confident in a sell-through for every Value Pack destined for N. America, which is why the base unit won't be released until November of this year. The PSP outsold the DS in Japan by ~80% (for the week of Feb 14 - 20, 2005) and has a 72K margin in overall sales over the DS so far this year; replicating similar numbers in N. America may not be difficult. Rumours are now swirling regarding a successor to the GBA (not necessarily a direct competitor to the PSP) expected by year's end; a new product would compete for retail shelf space, as well as the hearts of consumers. But I digress....
As highly rated as DMC3 is by the media and gamers alike, chances are it will see a price drop ahead of GT4. GT4 is Sony's flagship title currently; it should be a consistent performer throughout the year, and it's possible that it will still be in the $40-50 range come December. Some people were disappointed with DMC2, and even though DMC3 is a stronger overall product, it could be a case of
once bitten, twice shy for both hardcore followers and casual gamers alike, which could affect sales, thus increasing the likelihood of an earlier price drop.
I'm an avid fan of both franchises, but right now, the PSP takes precedence in my gaming budget, i.e. I've decided to wait for PS2, Gamecube and Xbox titles to be discounted before I consider a purchase. With GT also destined for the PSP later this year, there's less of an immediate need to get GT4 now (even though it's on sale this week at CompUSA). I need the PSP while I'm travelling; your need for one may differ from mine.