Let me ask you something.

3DS and the iPhone platform are a big deal, right? Yeha, they are. We can all agree on that, whether or not we're excited for the software prospects. We also agree that both of these platforms will be established before the PSP2 materializes.

The question is this: how will the PSP2 differentiate itself from these platforms in a positive way?

They are pioneer of 3D WITHOUT glasses in VIDEO GAMING industry.

Let me ask you something too!

Why do you think Nintendo partners with other companies for the material supply? Why do you think they are using other engineer to build their machines?

...They're... a software company? But they did engineer the 3DS themselves, because they are also a hardware company.

When SONY unveiled the PSP, the were on their best time ever. They were unbeatable thus far, Playstation brand was dominating; Nintendo on the other hand was expected to leave the market like SEGA, many predicting a failed DS and PSP dominating as well.

Even in such a situation, PSP failed. They still sold 60 million PSPs, but I think that was on the brand name alone. The had a strong headstart (in fact, in Japan, PSP was outselling DS for quite some time) and stronger third party support than Nintendo.

Think about it: everyone has seen what a beast DS was. Who in their right mind would side with Sony now? And as aforementioned, even f***ing MGS is on 3DS. This thing will dominate. And I don't mean just the handheld market.

Yes but they have deals with other developers from other companies to supply some pieces. They're not just using their resources, but the are looking for what's good others have to offer.

Who knows, they are people that work for both Sony and Nintendo, and even Apple that get paid top dollar to figure that out. Only research and surveys on a massive scale will be able to give you that answer, but all i can tell you is that the Iphone and 3Ds wont be for everybody. Some people want more media functions than both of those products can offer while others want all of the above combined with a phone built in. Sony and possible Microsoft have plenty of options available to them, point being no matter how fancy these products are they will always be competition, and Sony is very capable of delivering competition.

As a company I can see Nintendo being pissed that they lost 60 million people to the PSP this gen, and now they made the 3Ds to make sure that hopefully wont happen again, because anyone can tell you that the 3DS is going directly for that 60 million PSP market.

No, they shouldn't. 

Of course, there is no doubt that 3DS will be the beast. But PSP, even if it's not a winner on the handheld market, is a Sony's very respectable step. 60 millions consoles sold and counting, 35 million-selling games. Nice try anyway, I think! Even if Sony would quit from handheld market I will remember PSP as a good and successful console. Maybe Sony would try enter the market again, if there would be a suitable situation in the future. 

Also a PSP's mission isn't over for me cause I'll have to play Parasite Eve: The Third Birthday! :D 

P.S. Some people are already playing 3D games on PS3. Yeah, with glasses (glasses or non-glasses... in the situation with PS3 it is only depending on TV, not on a console), but they are playing. So maybe it is a Sony 3D-gaming pioneer? =) 

The problem is: would customer see that as a phone or as an handheld? Sure, Android is popoular and bigger than iPhone alone, but there are too much Andoid phones! Out of all the Android devices how many would be PSP2s? To sell better than current models you can't just rely on th brand playstation, because in the phone market there are bigger brands. What they can do is an hybrid between a phone and an handheld, but if it's perceived just as a phone it's the beginning of the end.

And anyway the main problem is there: software. they can count on Android's store but that's not an exclusive and maybe they would loose even more third party support, because there would be too much garbage for customers, the same which happened to Wii (but this time would be bigger, since Andoid library is gigantic).

Lastly, wouldn't trying to be at the same time and handheld and a smartphone a suicide? They would have two different userbases to understand and satisfy and two different kind of "enemies" to fight (three if we count piracy).

I agree with the poster earlier who suggested Sony focus on prfitability instead of marketshare with the PSP2. I think they should make sure they sell the hardware for a profit from the start. Obviously try to find ways to reduce piracy, and maybe add some more communication elements. Otherwise I think they should make an PSP2 with expected features, and maybe include some combination of touch screen/3D/motion. This approach may see a reduction in number of units sold, and it may be really dominated by the 3DS, but it could still be profitable in the way the Gamecube was profitable for Nintendo. This way they are still in the market for the future, it would be financially viable immediately, and they wouldn't be taking too big of a risk or hurt SCEs chances of being profitable overall again.

I would be interested in seeing how a PSP 2 performs based on the momentum of the PSP. In America the sales of the PSP seemed to drop off pretty quickly, but obviously it has been a strong performer in Japan for several years.  So I would think that the sytem would initially get more Japan 3rd party support than Western, whereas the PSPs initial 3rd party support seemed to be the other way around, with the GTA games being the biggest hits for the system.