You can change the price very easily. But, would you risk millions of dollars on the same idea if you thought the problem was something else?

Also, not sure why people bring up Apple very much. I have yet to see any data that supports that Apple products and games on their devices inpacts the software and hardware sales of the DS and PSP. I would love to see those.

Sony can go 2 ways, as many have mentioned making a PSP phone is not a bad idea, get the Android OS and add PSN connectivity and it's good to go.  The other thing they can do is take a different approach from Nintendo, which is oddly Sony's approach and go Nintendo's old approach and push the hell out of coop, push it so much you'd think it was X-Box live.  Put proper PSN support in the PSP2, let people on the PS3 know if you're playing a PSP game, and if you have the same PSP game, why not pop it in and coop.  Add p2p infastructure for said coop so I don't have to be besides someone to play.  Trophy support for PSP games, and even a second analogue nub and this can go a long way, get third parties on board the way Nintendo did and I think Sony might be able to create an equilibrium which in a way they have now with games between the DS and PSP.  If they can't create this equilibrium then the PSP phone might be the only way to go.

Sony made the best handheld ever IMO,and they should NOT scrap any plans for a future itteration. All they need is a quality hardware, quality software, lack of piracy, great online connectivity, games, games, games ( and lets be honest their 1st party is stronger then ever, and there are plenty 3rd party devs whom would jump on it) and a lower then expected ( from Sony ) price... if they stick to this, there is no reason why Sony couldent have yet another 50 million selling hardware, and if they do it right they might have some amazing software sales to this time around

SONY should not scrap plans for PSP2 -- but they should wait until its time to launch PSP2. 

 At the moment the 3DS looks like it has around the same power as the PSP -- which means that SONY should be able to convince developers to make PSP versions of their 3DS titles. Also this gives SONY an opportunity to cut the price of PSP and wait until 2011 to launch PSP2 as unless Nintendo kills the DS it should continue to dominate the handheld market for atleast 12 months.

 Of course if SONY chooses not to launch PSP2 in 2011, then they will be out of luck as by 2012 they will be risking Nintendo or Microsoft launching new consoles.

We don't even know, and Sony, Nintendo and Apple don't, either, whether 3DS will repeat DS' success or whether iGame (or whatever) will succeed or not, so it's a little bit early to predict Sony's retreat. With this attitude Apple shouldn't even try. If they keep costs under control, even a 20% share of next gen should be enough for not giving up, Nintendo didn't give up on home consoles market when GC dropped under 20%.

If nothing else, Apple's entry should make things even more unpredictable, whoever retreats without fighting just leaves it free room, but the more the competitors really willing to fight are, the smaller the winner's share willl be (and the winner could even be the outsider, Apple, as far as we know now).

People still believe Graphical Power and games like Killzone, MGS and Final Fantasies are what going to sell hardware...

If this is what PSP2 will offer, they really better scratch it. Not only that, but the production costs for those games will be astronomical for such a powerful console like the one you all wish.

They need something (or many things like the original DS - dual screens, touch, microphone, cameras) that changes the way people play games and good games that make use of those innovations. 3DS already innovated with glass free 3D, 3D camera... so if sony has only graphical power again... wel, good luck to them, it's going to be even worse this time.

Plus, like iwata said... touch screen and 3D don't match very well... so if sony wants to do 3D they probably need a second non touch screen, and that would be a blatant copy of design, even for today's standards.

I can't believe people are still talking about ten year lifecycles. The lifecycle of a product is essentially what the consumer demands the lifecycle to be. Once people stop buying a product and stop buying games the product is stopped. The PSP will most likely not survive the 3DS, it won't make ten years even if Sony wants it to.

Exactly. The PS2 is still around because it has regions not yet explored and because people in the US are still buying new ones while exploiting the cheap used market at say Gamestop. The 360 can do the same when it hits $100 if people are still buying them.

Anyways, I still think the PSP2 is better off releasing later. Also, they don't need to pay off developers to get support. They have PLENTY of first party studios that can develop for the PSP2 and can lead the charge. That way you get 8 launch PSP2 titles from Sony and more companies will follow along once sales start to rise.

That simply means Nintendo wasn't able to get 3d and touchscreen to work together. I suggest Sony find a way to inplement the 2 in a single screen, include a physical media (no download only), make it motion sensitive, and finally, really push connectivity. I expect wifi and 3G/4G at the very least. Their priority should be to ensure all PSP2s can communicate all the time. They might not need to make it a smartphone as long as they include the ability to call other psp2 users.

I disagree. The PSP will most definitely not survive the 3DS