PSP2 is on the way, developer says

Sony has built a prototype version of a PSP2 – a next-generation handheld gaming device – and the company is already handing out units to video game developers. That's the word this week from Netherrealm, the studio responsible for the Mortal Kombat franchise. According to Netherrealm executive producer Shaun Himmerick, the studio has its own PSP2, and it's a doozy.

"We have a PSP2 in the house and we’re looking at the engine, like what can it support," Himmerick told Industry Gamers. "Always a big thing for us is the performance," he added. "PSP2 looks like it’s a pretty powerful machine." Industry Gamers said it would post the full interview with Himmerick soon, and noted that previous PSP2 rumors estimated a release date of sometime in 2011.

Back in March, the Wall Street Journal reported that Sony, which has been hit especially hard by a slump in the gaming market, was planning to introduce a "PSP-phone" – essentially a hybrid smartphone and gaming device. "The device is designed to compete against multifunction products such as Apple's coming iPad tablet," the Journal noted.

Buzz on a PSP hybrid device has remained low in the months since. But Sony will eventually be forced to take action, one way or another: Despite a surge in sales in Japan, interest in the PSP and the PSP Go – a slimmed-down, hardware-enhanced successor to the PSP 3000 – has remained tepid stateside. A PSP reboot could be just what Sony needs.

Also see: PlayStation Move review