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PSPWorld, crediting a so-called "anonymous source", has reported that an upgraded type of PlayStation Portable might currently be in the works, likely as a means to better rival the dominating Nintendo DS and its approaching little sibling, the DS Lite, in the handheld market.

According to the article, the "PSP 2" (an unofficial title) should mitigate previous storage frustrations by including 4GB of standard space and, like the DS Lite, will be designed as a leaner system with black, white and silver models available. The rumored EyeToy may allegedly be another addition; besides granting "PSP 2" owners the use of a digital camera, the device is said to be key in potentially streaming video from the handheld directly to the PlayStation 3 with help from the contemplated "HUB" service.

While skepticism may run amok, Sony does have a reputation for modifying its current consoles, such as it did with both the PlayStation and PlayStation 2. Although limited as the info is, it's perhaps probable, if not ordained, that the company would strive to make improvements on its handheld. However, Sony's recent problems associated with the PlayStation 3 - not to mention the unwritten rule of caution dealing with anonymous sources - almost makes the possibility of a souped-up PSP launch nary a step above speculation.

Source: Total Video Games

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I think that this is unfounded speculation. Sony might have a reputation for reissuing consoles, but it took them four to five years for them to release improved versions of the PS1 and PS2. The PSP has been out for barely a year and there's already talk of a remake? Nintendo's remake of the DS within a year was expected - in a span of five years the big N released four versions of the GBA and an entire new handheld system. I have a feeling that these PSP 2 rumors are only bits of speculation in the wake of the announcement of the DS Lite. I'm sure that Sony will remake the PSP eventually, but this is too soon for me to trust an "anonymous source".

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Laszlow is probably right, it's too soon for Sony to re-release anything

I would also have to say that it is way too early. This would surely anger owners of the current PSP (including myself) to an extreme extent.