Main problem is that 1up are just citing their "sources" but not giving us anything concrete about where this information is coming from. So it could just be more rumours. The fact that it's supposed to be coming out this fall also makes me a bit sceptical.
We've been hearing rumours on and off for a while now that a new PSP was coming and that it wouldn't be making use of the UMD drive, instead opting for Digital Distribution direct from Sony's store. Personally I've been holding off on getting a PSP largely because the UMD drive sucks up battery power and slows everything down (load times are much slower), it was likely whatever next gen PSP would probably do away with it.
What information (or rumours) we do
have indicates that aside from being disc-less it's also going to feature a sliding screen instead of keeping the controls besides the screen as is currently the case. Sony are also making a fairly significant push with their online store, with 100 new / classic titles for launch. Two versions will be announced, an 8 gig and a 16 gig flash memory version. Release is scheduled for Fall / Winter.
It's important to note, this isn't a PSP2. It's still going to be playing the same games and there's no information on any performance increases. This appears to be a re-working similar to the one from the Nintendo Gameboy Advance to the Nintendo Gameboy Advance SP. Only in this case, it would seem that there's no way to use previously purchase games.
So thoughts? Like I said, these rumours have been going around for a while. Certainly devs have been complaining about the UMD drive and how it really hurts the system. It's also evident that apart from occasional mega hits like Monster hunter, the PSP hasn't been doing as well as they had hoped, certainly not a patch on the DS.
If true, I have to wonder what happens to all the UMD's they're selling at the moment, and how this would change their sales strategy. Everything would be coming directly from Sony, no 3rd party retail. This would be a good thing for Sony, but the lack of retail competition tends to keep game prices high, and decreases the likelihood of sales and discounts. You also have to wonder how much exposure PSP titles will be able to get without being stocked in stores for people to see, retail is still the biggest chunk of money isn't it?
Does anyone have experience with the Sony store and buying digitally distributed games for their PSP? What's the service like? Can you back up titles after purchase? What's their policy on re-downloading games that you've bought?