Also just to add to the whole PSP vs. iPod debate.. In my experience, iPod's are generally more expensive and have larger profit margins so.. Apple are doing better anyway you look at it..
I could see this happening.. The PS3 is down year on year and Sony need a new profit driver for their gaming division.. One that can take over the slowing PS2 and the piracy riddled PSP in it's current form. If Sony start with a 0 install base again, all digital distribution, I think a number of things will happen..
1. PSP2 games will be cheaper than DS/DSi games.
2. Nintendo will get a lot more retailer support in the handheld market as retailers will want to benefit from DS/DSi software sales.
3. PSP2 will not have to contend with piracy.
4. VGChartz will be fucked trying to track the sales of software on the platform :P
