Is this the PSP2

It looks like it's turning into the year of the next-gen gaming handhelds, now that Sony's rumored PSP2 is expected to be announced on Thursday, right on the heels of the Nintendo 3DS event last week. Though it's not a surprise that sooner or later a new PSP would emerge, the real question is whether it can recapture any of its lost market share.

It's an interesting time for the venerable and somewhat struggling handheld game market. Smartphones and low-priced apps have become a more popular gaming platform for many. What makes a PSP2 any better than the PSP that came before it, or its failed attempt at a redesign, the PSP Go And will it possibly be a smartphone as well So far, here are the top rumors out there about the PSP2.

HD graphics that could match the PS3. If true, that would certainly make the PSP2 an incredibly impressive gaming handheld, but graphics aren't everything. The iPhone 4 and iPod Touch are already capable of astonishing graphics, and the original PSP wasn't too shabby, either.

Dual analog sticks. It's about time. We hoped the PSP Go would have dual sticks, and this would help the PSP2 have an edge over the one-stick Nintendo 3DS. If its games are PS3-quality, dual sticks are practically a requirement. In any purported leaked images of the PSP2, dual sticks are always present.

A touch-sensitive back panel. A touch screen makes more sense to us, but maybe Sony can dream up another interesting control feature on the PSP2 that makes it easier to use.

No UMD, only downloaded games. The PSP Go already does this, and Sony's library of PSN-downloadable titles has had a chance to grow. Plus, unlike Nintendo, Sony's account-based system already keeps a record of what you've purchased and allows easy redownloading of files, like Amazon's Kindle.

A possible 3G connection. Although there are plenty of rumors about a PSP Phone, it looks likely to be a separate product from the PSP2 (although recently rumored shots of the PSP2 look very similar). Some say the PSP2 might still have 3G broadband, which would only be for online gaming and data. This seems unlikely--Wi-Fi would suffice for most. We still wonder whether a PSP2 and a PSP Phone could share a similar design, much like the iPod Touch and iPhone.

A bigger screen. Almost a certainty, especially if the PSP2's graphics are as impressive as advertised. A 5-inch screen wouldn't be so unusual now that many Android phones already crack 4-plus inches.

An OLED touch screen. Nikkei has reported this as being a certainty, and considering Sony's propensity for industry-leading screens, it wouldn't be surprising. The original PSP had one of the best screens on the market at the time. Now that every other handheld has touch, the PSP2 might as well join the party.

A strategy to share movies, games, music, and other files across devices and entertainment products. Sony has a wide-reaching line of consumer electronics products, and the PSP already has compatibility with PCs and the PS3. If Sony's goal is to continue to take on Apple in portable entertainment, then the new PSP2 has to be a great multifaceted device, not just a game console. Easy file sharing would distance it from Nintendo. Who knows--if the screen's big enough, maybe it will even support e-books.

Either way, we'll know soon.

Read more: PSP2 prototypes roundup