Natoma,
Thing is V3, Nintendo has had nearly two decades of producing game playing power friendly handhelds. This is Sony's first attempt. I would assume that 16 years of experience with this, Nintendo would have learned a thing or two.
Nintendo had been producing handhelds gaming in the form of G&W since what ? 1980 ? So they have more than two decades under their belt. True, this is Sony first handheld gaming, but its not their first portable device.
They have always said that battery life is paramount. They would not have added two if it were to present the battery life problems that the PSP is apparently going to have.
Nintendo, didn't put in backlighting in GBA screen for reason of battery life, Even for SP they went for frontlighting for the same reason. So yes, they've been cutting corner in the right places for battery life. But even Nintendo knows NDS is going to drain significantly more power with its two backlit screens compare to GBA. This is apparent by the bigger battery in NDS and lower quoted battery life for NDS.
The PSP will always have a certain level of power drain from the display and the spinning disc.
PSP display will draw more power than the 2 NDS screens, if the NDS screens has a lower brightness rating. LCDs of that size, 3" - 4" with low resolution and brightness around 200 cd/m2 will draw around 1-3 W of power.
Even if they reduce the graphic level of the games, it still won't make a difference as the CPU will still be drawing power.
And NDS CPU don't draw power somehow ? Of course PSP CPU still draws power. Its rated at 0.5W for decoding movie.
And frankly, the big thing about the PSP is that it would have graphics superior to the PS1 but less than the PS2. If they start releasing games with DS level graphics (which are damn good, dont' get me wrong) in order to conserve battery power, they lost the war before it even started.
If DS level graphics is damn good already, what's the point of superior graphics, you intend Sony to compete with NDS, it'll be pointless, for Sony wouldn't it ? Unless you have weird scale, and put 'damn good' as your lowest preferences
Anyway Sony would have lost if they target the same audience as Nintendo. Nintendo audiences generally have more time on their hand for gaming, That's why they demand longer battery life.
Nintendo have too strong of franchises, that Sony just would not able to compete or anyone else for that matter. Most of the best selling title on GB are Nintendo published. Nintendo can only lost it themself, like they did consoles. But they're better prepare this time around.
Sony would have to create its own market, but I don't think they can take market share away from Nintendo, even if they have abundance of battery life or superior technology.