I would believe the general stereotype is.
DS --- Children / Female / Old casual farts
PSP ---- Teen / Young Adult / Dude Bro / Emo Otakus
Humorous generalization. But the demographic breakdown for publishers and creators were probably something like that.
While I think there's still a embedded belief in that stereotype, it's also worth noting that basically all these brands have come to 3DS. Hopefully Nintendo's working with the holdouts (like Kojima) to ensure Wii U can also move past this kind of thinking. Particularly since pretty much everything seems to be going in the direction of crossgen multiplatform already, which ideally suits the system short term.
I can only infer from what I'd seen on consoles this generation. That is most of these franchises sell more in the West and appeared on 360 despite the dismal sales in Japan. It might also helps that the HD twins are close in power.
Sure, but this past gen was a bit of an anomaly in that the industry wholesale had essentially already picked their platforms irrespective of market performance. And really, the HD consoles aren't presenting that attractive a base for Japanese software in the west either. The top end AAA blockbusters can still do well enough (though maybe not relative to cost), but sales for the middle and low end Japanese games has basically bottomed out compared to PS1 or PS2.
I don't think there's any real obvious choice for Japanese studios going forward, handhelds rule at home but are declining elsewhere, consoles are the reverse but are also getting more expensive and much more top heavy, PC is essentially digital only and possibly too diversified/foreign/greenlight, mobile demands free to play rethinking to turn a profit and has inherent interface/piracy issues. I think what Japan wants/needs is another FC/SFC/PS1/PS2, and there really just isn't one.
PSP game dev costs were comparable to DS game dev costs from what I've read, and those games' assets could be mostly reused from earlier non-portable iterations of the game. Plenty of PSP games were never localized (and probably never intended to be localized), so arguably western sales don't matter so much.
I wasn't talking about low budget, Japan only or Japan oriented releases. I was talking about stuff like MGS Peace Walker, Soulcalibur BD, Kingdom Hearts BBS, etc. All stuff that matters MUCH more on foreign markets than the national one.
The theory was these sorts of franchises would skip Wii U due to western draw. I don't think that theory holds water given PSP's general irrelevance outside Japan.