Hardware has for a while been profitable for the PSP.  They haven't gotten anywhere near the 149 or 99 price point yet. I think that would do a lot to drive PSP sales.  Not to mention that they might be putting their software on one of the largest up and coming digital marketplaces extending their userbase for software which is what the psp needs. Just because it isn't doing DS like numbers doesn't mean it isn't profitable or a bad idea.  God forbid they try to leverage their content over an up coming darling of a digital network as opposed to go into a hardware race they can't afford.

a real PSP phone would be only reason to jump from maemo to android.

I didn't say they would stop selling the PSP3000. Therefore profitability is not the prime concern. Its marketshare and sales trends that dictate the release of a new console. They want to drive up business, not continue to watch it drop.

At this point the consumer market has declared the DS the handheld preferred choice and Sony knows Nintendo is putting out a completely different model with a big new feature (at least one). Therefore they will not sit on their assess and continue to lose more market share. There will be a PSP2 announced this year. May not be called 'PSP2' but there will be a dramatic hardware change that would be considered a new handheld console.

If it's a phone, e-reader device or tablet i'm sure at least the people around here will scarcely consider it a gaming console given their skepticism of other manufacturers declaring they have a game console.  Besides isn't Sony Playstation supposed to be merged with Google tv or something of that nature? 

becoming a part of google android platform does extend their marketshare.

That depends on how they market it. If it carries all the features of a PSP and has 3G/network capabilities and takes digital plus some form of media based content, I don't see how if could not be considered a handheld console.

By giving it good phone qualities with maybe Android OS, you automatically dramtically increase its desireability. Plus, it then could be tied to a lower price point due to carriers giving kick backs. (i.e. Apple sells the iPhone to AT&T for a lot more than AT&T sells it to the consumer as AT&T makes the money back due to contracts.)

E3 can't come any sooner !

A little interesting Info

as you know :

Tim Schaaf is the head of " Sony’s first head of software development"

http://www.sony.com/SCA/press/051222.shtml

a little history about Tim:

Sony software czar's big challenge

January 30, 2006 10:15 AM PST

Sony's new software czar, Tim Schaaff, knows a little something about handling companies in turmoil.

http://news.cnet.com/Sony-software-czars-big-challenge/2100-1041_3-6032801.html

now notice this:

look who Tim report's directly too!

Interestingly enough, the PlayStation Network development team now reports to Tim Schaaf, an ex-Apple veteran who is now Sony’s first head of software development, and is also part of Hirai’s new division.

now look at this Quote:

from:

Sony's Google Gambit It is latching onto the search giant's open-source Android and other offerings as it plays catch-up with competitors

"The company says it also may let Google and others create applications for its PlayStation 3 game console. "Open technologies are very important to consumers," Schaaff said in an interview last year. "Obviously we don't have a monopoly on innovation.

I think Android OS would infact be a unification software platform!

a very good one In my opinion.

^joeorc: Very  likely. I think all Sony products will be Android based (except PCs), plus older ones will have updates available (like PS3 and PSP).  It will help them to create synergy between their products, something they are talking about lately.

yea i think after reading the recent new's about Google TV and Sony fully in support of the Android OS:

this I think say's it all:

Interestingly enough, the PlayStation Network development team now reports to Tim Schaaf, an ex-Apple veteran who is now Sony’s first head of software development, and is also part of Hirai’s new division.

Tim is a very big supporter of the Android OS from what i can tell, and I can see why

example:

Xperia X10 Quickly Becomes NTT DoCoMo’s Top-Selling Smartphone

by Kevin Krause on May 14th, 2010

http://phandroid.com/2010/05/14/xperia-x10-quickly-becomes-ntt-docomos-top-selling-smartphone/

update:

o'l holy hell...:P

snicker's..lol

why would they release a new psp when kingdom hearts is coming out fo the psp this year. Also MGS just came out for psp and god of war is also coming out soon.

Anyways i hope this is some kind of app store or something.

If it is a device it better not be $250