Oh come on Ymee, some of your points are really flawed. Despite what you think, price is a HUGE factor.
Only Sony is myopic enough to believe that the PSP launch price (as well as its future horrendous game droughts) would be overshadowed by the PlayStation brandname.
"didn't do jack--same with the Gamecube---a more powerful system at $100 cheaper yet it sold DEAD last"
Many, many reasons for that. Because it was cheaper, it was perceived by the ignorant public that it was a lot less powerful than the PS2 or Xbox. Nintendo did close to NOTHING to prove that wrong, so there was always that stigma. On the opposite side, MS went all out to assure the public that the 'Box was the most powerful out there, and they succeeded in just that. Next, the PS2 came out a long, long time before the GCN. It had the benefit of developers jumping on the bandwagon for a fair bit of time to develop many games before the Gamecube was even out. They did have a drought, but it really didn't matter at that point. Then the "killer apps" came and it was over. From then on, the 'Station's userbase, software library, and 3rd partry support grew and grew and grew. Had they been released at the same time and if Nintendo had done some things differently (they couldn't afford to have the drought that Sony did), the Cube would be on even footing with the PS2.
"yeah killzone 2 was a video but imagine if that was actual gameplay--I wouldn't think twice about dropping a mere $400 bones. "
I'm really sorry, but in this planet we call Earth, some of us don't have $460 US to hand out to play a single game that, even if the graphics turn out to be like that, it's gameplay is in doubt to say the least. You wouldn't think twice? Wow, you should really thank your lucky stars; not many people can afford that luxury. A "mere" 400 bucks eh?
"everyone assumed that Big N was coming with GBA2 but instead they're releasing the GBA micro . Still no word on GBA2."
I don't WANT a GBA2; the DS is perfectly fine. And what a stupid, moronic, asinine decision that would have been to release the GBA2 so close to the DS's launch. Why on earth did you think Nintendo would do that. It's still a handheld, and it needs as much work on it as the DS does. Obviously Nintendo wouldn't have been able to handle it, seeing how pre-occupied they are with the DS. And what would the people who bought the DS for $200 say?
Also, those sales numbers are wrong, if I can remember correctly, the DS most definitely DID sell out its first shipment. The "usual people" bought the PSP at launch, but then after that the sales plummeted, due in large part to price. And you say that the PSP was gaining ground fast?? Launch games like that only take a system so far...it didn't have ANY major titles coming and at a price so high, it was inevitable that the sales would go down. Only a few people pay that kind of money for a handheld system. Clearly, a price so high can only take you so far; don't tell me that the PSP isn't suffering by having a price that is ridiculous.
So yea, price is IMMENSELY important to the overall success of a system, but other factors can help overcome it (as shown in the PS2 case)