It's no secret that software sales on PSP have been bleak as of late. You'd be ignorant to believe that piracy levels on the handheld are not incurring a hefty dent in overall sales. Piracy isn't the only negating factor at play here, of course, but it is certainly a major one in the PSP's case.
Sony agrees - and they are publicly admitting that rampant PSP piracy is a growing concern, one that may impale the lifespan of the handheld. SCEA marketing VP Peter Dille admits outright that "most third-parties were just about ready to jump off the cliff and pull support for the platform" prior to the introduction of PSP-2000.
Seeing download statistics for popular PSP efforts such as Resistance Retribution on high-trafficked BitTorrent sites made Dille to label the present situation as "sickening."
Further to this, he made a call out to those responsible for escalating piracy numbers. "I think gamers, if they understood if this meant that a platform would go away, can we convince gamers to pay for their content? "
For their part, Sony has of course been proactive in attempting to remedy this ongoing threat to the PSP's future. Last year, they introduced the PSP-3000, which included hardware modifications that prevented the widely used Pandora Battery hack from functioning.
It's hard to say where Sony will take anti-piracy efforts from here exactly, but it seems that a greater emphasis on digital distribution is in store for the future, as rumors have suggested. Such a direction is also evident by the forthcoming UMD-less release of Patapon 2.
Catching Up With PlayStation: Peter Dille On Sony In 2009 [Gamasutra]