Fine, you disagree but realize that goodwill comes and goes like the wind in this industry.  Just look at the PS3 once it got the slim and started acting more competitively,  more developers want the PS3 now, and it has gotten some decent 360 exclusives, and i'm sure that the developers and industry in general appreciate sony taking the steps that it is to ensure that it will be more dominant by the end of this gen. 

Questions:

-why is this confusing things?  what is so confusing about buying a Sony phone marketed as a game device?  You have music phones and people just dont look at them and  go " what da heck" in some redneck drawl....How would it even be hard to use?  You'll have a game download section just like with any other phone, probably have control buttons and so forth.  Simple stuff if you play around with it.

-How has the PSP go tarnished the idea of DD for handhelds?  If the go or any other handheld were successful, wouldn't this show that DD could be done well?

how so?

there is more of an indication that is where Sony is going with the PSP than sticking it out in the dedicated handheld gaming device market.

heep what PSP's you have now just move the PSP function's to be added to now smartphone's. its not trying to compete in two market's at one because you only need one handheld at a time, Many people only want to carry one handheld device at a time.

so.

by adding playstation functionality to a smartphone..you would not need a dedicated Playstation portable device. thus since Smartphone app's are digital download anyway. Its atleast a Market that Sony could move the Playstation portable too without still trying to keep competeing directly with the Nintendo in the dedicated handheld game system market.

right now Sony sold quite a number of PSP system's but also right now it has a hard time selling PSP software.

so instead of trying to compete for shelf space which Nintendo dominates with DS software. Move the PSP to digital download only. which they seem to have anyway..less and less PSP software is selling anyway.

You can see already How UMD's carried in store shelves are already have small shelf space.

All psp's already can download PSP game's anyway! so no one is left out anyway so, there is no problem with going all digital download only.

all smartphone's already are digital download already anyway.

I think moving the PSP functionality over to smartphone's is more of an option than just putting out a PSP2

you alway's heard many gamer's : well if they just added a second analog nub, i would buy a PSP

so what if sony did do you think that people would still buy one?

At this point Sony removed the PSP umd drive after many complained I do not Like UMD's after they did it ..well the PSPGo offer's nothing more than the older PSP.

no matter what Sony does with the PSP it will alway's be priced too high because many people still compare it's price to the Nintendo offering. even if the PSP2 has over all better hardware it will still be seen is too pricey.

So if Sony does move the PSP over to the Smartphone market Atleast the prospect's would be better than just trying to keep competeing with Nintendo in the dedicated gaming handheld space.

1)There was the N-Gage, a gaming phone. It didn't do very well, showing a gaming phone may not be what people want. Also, there seems to be an inverse correlation with features and success. The PSP has more features than the DS, yet it is losing to it. The 360 and PS3 have way more features, but they too are losing to the Wii. This shows the market does not want features.

2)Yeah, but there is no successful Digital distribution console. In the real world, the only one that exist is a flop. Why even consider a DD console again?

1.  Looking at Sony's PSP phone seriously, it probably won't be similar to performance of the PSP.   I imagine that it will be about as powerful as an Iphone, which is well below that of a PSP.   But I could see performance close to the DS however.   Either way, this has a few advantages for Sony in that:

-Piracy will be nonexistant which Sony has very recently been complaining about.  DD ensures that piracy won't happen.

-DD reduces price of games.  You remove the packaging, disc, cost to transport all of these, etc and just DL it over the air. 

-A phone with added game support, esp a DD kind of game phone, costs very little more to add it to a phone because all you need will be a few buttons and some memory which is friggin cheap. 

the questiong is even though it's not number One the product still sold over 50+ million unit's.

because it's not the same market as you are looking at only as it's just competeing as a "gaming device" over just being another handheld device.

N-Gage is not a Playstation, nor is a playstation 3 a Nintendo Wii. just because already some other company made such a device does not mean you cannot make such a device and it being sold and supported better.

if that is the case Apple would never have made the Iphone, you do not know until you try.

It's more telling that Sony is even talking about that direction show's they are open to the idea to move the playstation brand into the smartphone market is I think is a pretty smart direction to take the PSP platform . Even though it's more crowded, atleast they will have a better chance in the smartphone market than in the dedicated game device area.

Oh, I don't disagree generally, support and priorities are always in flux. It's just that PSP2 is going to find much harder path to row with press, retailers, developers and publishers than PSP1 did.  PSP1 was basically the assumed market leader once it was announced with everyone expecting Sony to repeat their 32bit thumping of Nintendo, but PSP2 will find itself in a much different position now thanks to how things actually turned out.

And honestly, I'm not seeing all that much difference in developer support for PS3 post-slim, the vast majority devs are still fixated on HD multiplatfom and PS3 was getting windowed 360 exclusives from (literally) day 1.  I mean, I guess you don't have Activision execs publicly threatening to drop support or anything, but I haven't seen much actual gain in terms of software yet.  In fact I can't even think of a major 3rd party PS3 exclusive that's been announced after Slim launched?

As to your questions...

-Market confusion was one of the chief early complaints about PSP1 actually, even coming from sources such as the president of (long time Sony ally) Square Enix.  And to some degree, it could be argued those complaints had merit, especially when compared to the "games, games, games" line Nintendo pushed for DS. If PSP2 really is tied into being a phone (even optionally) and DD only, what's to say the game industry won't have issues with it being even less focused on (and as such, relevant to) the current games marketplace?

-It flopped, spectacularly.  Like Virtual Boy level flop.  That's how.   And it hasn't tarnished the notion for handhelds in general (just look at how the industry is swarming around iPhone) just for PlayStation handhelds.  If PSP2 really is DD-only, the first words out of everyone's mouth will be "lol Go".

Yes EASILY.

I would think it's more than possible because of their 10-year model. Both Microsoft and Nintendo will release new consoles probably within the next 2-3 years. So sales of the Wii and 360 will plateau off soon after that as they promote their new consoles whereas the PS3 will still be going strong.

I wouldn't care a bit if Sony finished second this gen.

What I care about is Sony to learn something from their mistakes this gen and push forward next one.
Only then consumers will be true winners.

Can anyone name a 2nd/3rd place console that had a true 10 year cycle? 10 year plans are great PR (which Microsoft has espoused too btw), and lovely in theory, but there's a difference between that and it actually happening. Companies can't keep platforms on shelves through sheer force of will alone, it's quite literally the market that decides if a console sells for 10 years or or not.