With Nintendo preparing to unleash its 3DS handheld system and Apple going strong in the iPhone and iPad department, perception is that Sony needs to step up its game with a new PlayStation Portable in the near future if it wants to remain competitive.  While rumblings of a PSP2 have been around for quite a while, there's a new rumor going around today worth noting.  As Kotaku reports, the PSP2 is quite real and, unfortunately, running quite hot.  The device supposedly includes a trackpad-like touch panel, high definition screen (well, as HD as one gets on a handheld), and so much horsepower inside that it drains the battery in a snap and overheats.  Hopefully all of this can be worked out in time for the supposed launch in late 2011.

A larger PSP should not be that big of an issue for Sony — especially in a mobile environment with large tablets like the iPad. It also shows that Sony realizes it is no longer simply competing with Nintendo, but also Apple.

It is unclear whether this is the same handheld described by the Wall Street Journal. According to the paper, Sony is working on a device that mixes a game player, an e-book reader and a netbook computer.

In late September, there were also reports that the PSP2 hardware was in the hands of "numerous" developers.

Currently, the PSP2's hardware is not finalized, and Sony is having problems balancing battery, power and heat. There are apparently overheating issues, but Sony is, of course, aiming to have those issues corrected by the time the hardware is publicly shown.

Sony set the PSP2's goals (what Sony wants it to do), but is still tinkering with the portable's innards. The PSP2's tech specs are expected to change, meaning that things like chip size and processor size are variable.

While I'm still interested in whatever Sony has cooking up in the lab, I have to admit that my new iPhone is filling my handheld media needs.  I had been clinging to my old PSP-1000 unit for Netflix and quickie web browsing in addition to gaming, but now with the iPhone I have a smaller device that does both Netflix and web browsing so much better.  I've found a few games I like for the iPhone, but nothing as expansive or enjoyable as what the PSP library can offer.  Platformers play terribly for me on the iPhone (I need buttons and a control pad/stick!), but I've become attached to some neat point-and-slash puzzle games.  Basically, I don't need a PSP2 now as much as I did, say, two months ago.  I held out for as long as I could, but in the end I had to move on to newer technology that meets my needs.

Meanwhile, Sony's non-disc take on the original PlayStation Portable, the PSPgo, has picked up a reputation for being a solution to something that isn't a problem.  Priced at $249 in North America, it costs much more than a standard PSP, yet actually does less.  Sony seems to see which way the wind is blowing, as the company has cut the price of the digital distribution device.  That's good.  Starting now, the PSPgo is $199 in North America and a mere ¥16,800 in Japan.  Europe's price cut kicked in last week (€179).  That's still more expensive than the regular PSP, however, so that's not so good.  It's a step in the right direction though.