Sony is cutting the price of the PSP in North America to $129.99, effective February 27.
The console will also receive another 13 new titles on the Greatest Hits Favourites range, priced at $9.99.
"The PSP system set the standard for complete portable entertainment and continues to be the premiere destination for gamers on-the-go," said Tim Bender, senior vice president of sales, SCEA.
"Nearly six years after its initial launch, demand for the PSP remains strong. This new price point enables us to broaden the PSP platform to a larger group of consumers who are looking for best-in-class handheld entertainment."
The PSP has sold more than 23 million units in the US and 67.8 million worldwide, according to Sony.
Earlier this year Sony announced a successor the PSP, the NGP, due around Christmas this year. The PlayStation branded phone, the Xperia Play, is due this April.