A PSP2 is not out of the table. Sony could do it right now if they wanted to. But, at the moment, it probably wouldn't be reasonable. Think about. For a PSP2 to come out Sony would need to bring something new to the table, at least different from original PSP itself and no buffed up graphics and more power doesn't count. Sony already tried "download only" with PSPgo and look how thats doing. If Sony blatantly copied Nintendo's "3D" tech and put it on PSP2, it would be a dirty move but they could steal some audience. But naked eye "3D" is pretty much out of the picture for Sony for various reasons.

1. Kaz Hirai (at least I believe it was him) said naked eye 3D is not accurate

2. They would need to develop PSP2 with naked eye 3D before 3DS releases (which is unreasonable)

3. Sony is still competing with PSP

EDIT! 4. I guess Sony said they have no plans for 3D on next PSP so there you have it!

So you see, PSP is successful, but most people know that when it comes to handhelds, Nintendo doesn't play. Sony would need to be a little bit more revolutionary with the PSP and do something new. No phones or any gimmicks like that either.

You make a good point and normally i would agree with you. However the reason for this line of thinking, i believe is the MASSIVE impact the 3DS has had on people since it's been unveiled. No-one was expecting it and i feel it's kind of blown people away, myself included. I know they were only demos shown but i think the sheer quality of the 3rd party titles shown and the commitment of the developers themselves was probably the biggest surprise. The exact 3rd parties who are normally associated with Sony products.

So whilst you certainly can't deny the success of the PSP, it also seems as if Nintendo has "stolen" all the biggest 3rd parties this new handheld gen, which does appear to leave Sony in a somewhat precarious position being that we know nothing of any PSP successor.

I think full phone integration and a Wii-like upgrade cycle (same chipset upspecced, internal flash standard, new interfaces like touchscreen and acceleromers/gyro added, 2nd analog nub) would be the best route for PSP, and probably preferable to a hi-spec PSP2 right now.  They should probably also drop UMD, but if they do this they really have to massively improve PSN for consumers (lower pricepoints, all UMD content available, more PS1 games in the west).  That way Sony can profit on the platform from day one, they can reissue tons of PSP content (some upgraded for the new interfaces, like tilt for LocoRoco or touch for Patapon), they can temp back 3rd parties by improving piracy measures (killing PSP1/UMD will help this also) and they can try to feed on 3DS's heavy 3rd party support by encouraging ports.  They could even issue a new "Phoneless" SKU (PSP touch) for people who purely want to use it as a game system.  No 3D though, a similar handheld 3D solution would be seen as (1) redundantly 3DS-too and (2) at odds with their TV/PS3 3D message (glasses).  They also can't break the bank on pricing, it needs to be $199 or less at launch (probably $99 with contract would be good, $149 for standalone).

PSP2 could provide something 3ds can't, but we won't know unless it comes out. PSP2 could be the hit people beleave 3DS is(not that big a deal realy).

PSP2 could provide something 3ds can't, but we won't know unless it comes out. PSP2 could be the hit people beleave 3DS is(not that big a deal realy).