Sony has been reportedly telling the licensed game developers that they need to come up with high quality content for PSP2 since it will be as powerful as their PS3. Clearly, they plan to keep a line between the multiple Android, iOS and other mobile devices that run casual games. The same casual games that are much more popular these days in comparison to PSP games.
I am expecting it to be a now-standard 4″ device with a QHD resolution display. Of course, rendering PS3 level graphics on a small QHD display will need considerably less processing power, and Sony can get away with PS3 like quality without burning their and buyer’s pockets. According to the report, the device will also have phone functionality but that will be secondary. I wonder if this is hinting a more powerful version of their own Playstation Phone. PSP2 will apparently be out by Q4, 2011. Enough time for more guessing and leaks.