Insomniac is 2nd party developer.

 Sony/Insomniac doesn't own the rights to the Spyro franchise anymore, am I right?

So that puts an end to the multiplat speculation. I'll assume it's the next R & C.

Last time I checked doesnt 2nd party mean you get your own personal space to do what you want and how you want but you are still required to make games for your parent company??

Actually, if I'm not mistaken, they are officially a third party, since Sony doesn't actually own them. But the relationship between the 2 essentially makes Insomniac a 2nd party dev (with them helping and getting help from the teams that Sony does own, as well as early access to new dev kits for example).

I think Vivendi games own Spyro, as well as Crash.

It is not shocking at all considering Sony fund for the games. If the game was multi-plat I cannot see Sony paying for development, I know shocking. :O

Wonder if they will make a whole new game or a sequel.

hopefully a new game

Second Party means Sony pays for development and publishes the game right? Cause I've made a small list with those:
Second Party studios
• Insomniac Games – Ratchet & Clank series, Resistance series
• Sucker Punch Productions – Infamous, Sly Cooper series
• Slant Six Games – Socom: Confrontation
• Relentless Software – Buzz! Series
• Clap Hanz – Everybody's Golf series
• Media Molecule – LittleBigPlanet (3 more games?)
• Eat Sleep Play – Twisted Metal ps3 (3 more PS3/PSN games)
• Quantic Dream – Heavy Rain (unknown)
• Level 5 –White Knight Chronicles (close relationship)
• Game Republic – Genji,Folklore (close relationship)
• Ninja Theory – Heavenly Sword (close relationship)
• Factor 5 - Lair (close relationship)

Close relationship means they could be former second party or that sony publishes or has published part of their games

Nope. They are just employed to do certain games.

Clap Hanz is first party though.