Should SONY Scrap PSP2?! (If they plan to make one)

[Bodhesatva]

My question would be: what strategy should Sony take with the PSP2? Because I see huge issues with all of them.

1) Little graphical upgrade, but 3D added. If they release this, it will run right in to the 3DS, which has more popular first party titles by a country mile (whether you personally like them), now has monster third party support, and is competitive from a graphical perspective. Worst of all, it's apparent that the 3DS will have a significant advantage by launching faster. Remember how much slack Sony got for launching the PS3 after the 360? Yeah, well, that was only ~8M units. Now multiply that by 2x or 3x, and you see how big a problem falling behind can be.

2) Huge graphical upgrade, comparable to 360/PS3. Third parties are already losing money on consoles right now -- major third parties lost nearly 800M dollars last year. 800 million dollars. Now, imagine applying this strategy to a handheld system, which Western third parties in particular have never been good at. PS3/360 graphics are barely a functional economic investment for home consoles; it's almost certainly unworkable for handhelds.

3) PSPhone. Good luck against the iPhone and Android! If there's a competitor I'd like to face even less than nintendo, it's apple. And if you try to make it a "Phone for gamers," or something, you're going to be competing against Apple and Nintendo at the exact same time. That's a nightmare -- an absolute nightmare. The two hottest, fastest growing companies in the sector.

It just seems to me that the PSP has been squeezed out of the market: Nintendo on one side, Apple ont he other.