Why did Monster Hunter explode on the PSP in Japan?

Because the PSP turned a co-op game into a place: four hunters, one train carriage, no internet required.

The first Monster Hunter Freedom (Portable in Japan) arrived on December 1, 2005, and moved the hunt from the television to the train. The PSP’s local ad-hoc wireless meant four players in the same carriage, classroom, or café could hunt together with no internet at all, in a country whose commutes and dense cities made that the natural way to play. Hunting became something you did next to people.

By Freedom Unite (Portable 2nd G, March 27, 2008) it was a national fixture: Capcom reported 2.5 million copies shipped in Japan alone by October 2008, on its way to becoming the best-selling game of 2008 in Japan, and Sony’s own PlayStation Blog would later marvel that one in five Japanese PSP owners was playing. The West got the games late, renamed, and largely without the social soil that made them grow.