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If the DS shows that hardware power doesn't matter that much, I can't see why Sony would ever up the specs of the PSP that much with a new unit.  If they do, it'll most certainly be able to play current downloadable games, obviously, so it'll be more of an evolution even though it may be a step up in hardware.

I guess if Nintendo puts out a handheld more powerful than the PSPGo, it may force Sony's hand, though they could wait a year before coming back with a clearly superior unit at a comparable price.