I do not think PSP piracy is not anything new. I look at the matter this way: You can buy a PSP for yourself, right? Once it is yours, you can do anything with it, you can put it on the microwave and cook it (as seen here), you can take a hammer and drive a big nail to the center of the screen, you can use it to play games, you can do whatever to it, because it is yours, right? So, placing Custom Firmware (CFW) on their own PSP is O.k. for anyone who wishes to do so.
Does PSP piracy hurt Sony, and game developers? I do believe it hurts game developers, but considering how much money these companies make, it is really insignificant (considering it is really the minority of people, who have hacked PSPs, not all know about CFW). Its like taking a penny out of dollar. Now Sony on the other hand, should not even complain, since many gamers buy their PSP for the main goal to install CFW on them. It just makes it hot that way, and so PSP sells like crazy. Just like ice cream on a hot summer day! If anything Sony should just make CFW legal if they were smart. That way I think Sony would really control the handheld market, and beat Nintendo DSi by a long shot.
Peter Dille, a Sony representative, recently said that the problem of downloading PSP games is growing and it's quite sickening. These are his exact words: "It's not good for us, but it's not good for the development community. We can look at data from BitTorrent sites from the day Resistance: Retribution goes on sale and see how many copies are being downloaded illegally, and it's frankly sickening"
Article source: Gamasutra...read more about it here!