The PSP is clearly on the downside of its lifespan as sales rapidly decline (in the West at least; it’s been on fire over in Japan) and the Next Generation Portable era looms. But like all Sony platforms, the PSP may still have enough life left in it to carry on alongside its successor, especially now with an impending price cut.

Starting Sunday, February 27th, the PSP-3000 will sell for only $129.99, a $40 price drop from its current ‘Core Pack’ price point of $169.99. Moving forward, all ‘Entertainment Pack’ bundles, previously sold for $199.99, will drop to the vacant $169.99 price.

If you still haven’t jumped aboard the PSP train, now is a good time to do so. Sure, the NGP is coming, but it won’t have a UMD drive, and, coming off of the platform’s strongest year of releases yet, there is a huge catalog of games (don’t listen to the haters, the PSP has a fantastic game library!) that you won’t be able to play on any other system.

More games have also just been added to the system’s ‘Greatest Hits’ and ‘Favorites’ lines of budget re-releases. New $20 ‘Greatest Hits’ include Assassin’s Creed: Bloodlines, Dissidia: Final Fantasy, LittleBigPlanet, Metal Gear Solid: Peace Walker, Ratchet & Clank: Size Matters, Resistance: Retribution, and Toy Story 3. And on the ‘Favorites’ front, Crisis Core: Final Fantasy VII, Daxter, Monster Hunter Freedom Unite, Killzone: Liberation, SOCOM U.S. Navy SEALs: Fire Team Bravo, and Tomb Raider Anniversary are now only $9.99.

And to those who continue to trumpet the PSP as this all-time colossal failure, since launching in 2005 the PSP has sold over 23 million units in North America and over 67 million units worldwide (yes, that means it has outsold both the PS3 and Xbox 360 individually). Put in proper context outside the pointless ‘console wars’ comparisons, the PSP has been a very successful first foray into portable gaming for Sony, despite plenty of missteps and bumps in the road along the way (actually, the PSPgo was more like a Grand Canyon-sized pothole!). Did it topple the mighty Nintendo DS? No it didn’t — but who really cares?

The second wave of titles in Sony’s “Favorites” line of $10 budget PSP titles is now beginning to roll out. Seven new “Favorites” are officially joining the $10 club, including Burnout Legends, Capcom Classics Collection: Reloaded, Capcom Classics Collection: Remix, Dark Stalkers: Chaos Tower, Need for Speed: Most Wanted, Medal of Honor: Heroes and Sid Meier’s Pirates!. Browsing around, it appears that Dungeon Siege: Throne of Agony has been marked down to “Favorites” pricing as well — and I’m definitely going to pick that game up again!

Those newcomers arrive in addition to previously released hits like Patapon 2, Syphon Filter: Logan’s Shadow, LocoRoco 2, PixelJunk Monster Deluxe and Silent Hill: Origins, among many others. That makes for around 25 “Favorites” in all so far, with more to come this holiday season.

More $9.99 PSP Favorites in Time for Back-to-School [PlayStation.Blog]