Sony have said in the past that they sell in countries where digital distribution is not possible and even in developed countries,usage caps and low speeds create problems.Kaz Hirai said that till 2020 it won't be possible to go completely digital.
Blu-ray is already a succesfull format and has been in use for some time so it will be cheap to produce.Sony will not use card format as they have recently given up forcing their own format,Memory Stick on their devices.And flash drives are expensive so leave that out of the window.
Also Blu-ray has cost Sony around $7 billion in PS3 losses.To make blu-ray even cheaper and spread the format further,they could include in in the PSP2.It will help Blu-ray immensely as formats actually start becoming popular after around 5 years when they are cheap.The same happened with DVD when PS2 helped it become the format to watch movies on.
Recent reports suggested that PSP2 will rival PS3 graphics and has as much ram as the 360.It was also reported that Sony wants people to take their PS3 games on the go with PSP2.Having Blu-ray will be the key as size is a major factor for PS3 games.
A mini blu-ray and PSP2 will be the perfect combition as it will provide adequate space for devs to push the limits of the amazingly powered PSP2 as rumoured and deliver it at low cost.It could also be used for movies and other media
