According to Engadget, Sony Ericsson is building the mother of all game-playing phones. The Android based handset combines Sony's gaming with Google's tech to essentially create a new gaming platform. It will apparently be branded as a PlayStation phone, and will represent the fulfillment of years of rumors.
The phone is said to be a cross between a PSP Go and a Samsung Captivate. Here's Engadget's in-depth description:
"It's a landscape slider with game controls in place of the typical QWERTY keyboard. The D-pad is here, but instead of the small joystick, the device will have what was described as a 'long touch pad' for analog controls, along with standard PSP buttons and shoulder buttons. The phone has a large display, described as being between 3.7 and 4.1 inches with WVGA or better resolution, a 5 megapixel camera that we're told might not be final, and it'll likely have a 1GHz Snapdragon CPU on board. The phone is mostly black with some silver highlights, and the gamepad area is white / silver in color. The phone is mostly black with some silver highlights, and the gamepad area is white / silver in color. Apparently it's currently branded as a Xperia device, but it looks like it will carry PlayStation branding as well."
The phone could be on the market this October, and will apparently be powerful enough to offer true 3D gaming to the Android -- basically, gaming on par with the current generation of PSP, but with the added bonus of the kind of "augmented reality" gaming made possible by combining Android with Sony.
If this makes it to stores, it will give serious competition to both the iPhone and the Nintendo DS... I love my iPhone, but I'd pick one of these up.