Sony is moving away from the UMD disc format, Koller explained to Silicon Alley Insider, and instead encouraging developers to create downloadable PSP games.
He claims that this newfound push towards digital distribution was misinterpreted, leading to the recent rumors of PSP 2 games in development.
Since the portable system debuted, some have complained of the load times, which stem from the use of UMD optical media. While downloaded games may still have load times, the times are shortened due to the faster capabilities of memory sticks.
In response to Koller's statements, Eurogamer wrote that "our sources are adamant that Sony has specifically discussed both products [another PSP hardware revision and the PSP 2] with them, and that games are in development for a PSP successor."
Even if they did have PSP 2 in development, it'd be absolutely silly to admit it now. Who would want to buy a PSP this Christmas at regular retail prices when the new hotness is coming up?