Speaking to an anonymous hardware developer, Pocket Gamer is reporting that a PSP 2 is indeed in development. This device will feature a touch screen and be generally more compact, similar to the iPhone. The PSP 2, however, will apparently feature the ability to slide open to reveal buttons, a D-pad and two analog nubs. This portable console will not have a UMD drive, instead making games available for digital download via the PlayStation Store.

A successor to the PSP has been rumored since late 2008 which at the time was denied as a misinterpretation of a hardware revision, while others claimed them to be mere fabrication. Not soon after, however, David Perry claimed certainty in a UMD-less PSP 2 coming, backed up by an anonymous development source, though Sony publicly reaffirmed its UMD business. Some argue that the success of the iPhone/iPod Touch has pushed Sony to make this move, though SCEA's Peter Dille claims they are not competing with Apple.