Sony Planning PSP Phone, Android 3.0 Gaming Platform?

Scooping speculators, Engadget claims it can exclusively reveal Sony Ericsson's plans to introduce a brand new gaming handheld. What's more, the handheld will run "Gingerbread," the codename for Android 3.0, Google's mobile Linux/GNU platform rumored to be deploying already this October.
Last we checked, Sony Ericsson was working on an Android 2.0-based mobile, code named Rachael, and due to be announced later this year. That phone is part of the company's XPERIA series, and includes a Windows Mobile-based X1 model.
Engadget describes this obviously more powerful Android 3.0-based model as a cross between the Samsung Captivate and Sony's own ultraportable PSP Go games handheld. Imagine the Captivate's screen with the Go's slide out gamepad, in other words--essentially one more iteration of the Sony's Mylo personal communicator.
Here's where it gets interesting: Apparently the device will have the traditional d-pad, but eschew a joystick-style thumb-nub in favor of a "long touch pad" for analog controls. Remember Mario 64 for the Nintendo DS, where you rubbed your thumb on touchpad in lieu of a joystick to move Mario around? Think that, along with shoulder triggers and the standard Sony geometry-based button pad. The latter makes me nervous, since I've had nothing but poor experiences using touchpads that emulate joysticks. Then again, the DS's touchpad feels fairly low-res--if Sony Ericsson were to employ something more on par with Apple's touchpad or iPhone screen tracking, all (cynical) bets are off.
The device's screen is reportedly on the small side, at least as games handhelds go, measuring somewhere between 3.7 and 4.1 inches diagonally. By comparison, the PSP Go, which employs a smaller screen than the standard PSP, has a 3.8 inch screen. Reading text on the Go, especially in PS One games, can be a chore. On the other hand, Engadget's source claims the screen resolution is WVGA (or better), meaning upwards of 800-by-480 lines of resolution. Compare to the PSP Go's dramatically smaller 480-by-272 resolution.
Moving on from more to less certain features, the phone may include a 5 megapixel camera as well as a 1GHz Snapdragon CPU. The Snapdragons are ARM-based CPUs that debuted in 2008 at 1GHz, and more recent iterations will employ 45 nm dual-cores running at up to 1.5GHz. One has to wonder if the latter wouldn't be more likely in a phone so definitively angled toward gaming.
It sounds like the Android Market is about to see a dedicated games section, and that Sony hopes to eventually open the library to alternative Android-based devices if they meet the minimum required specs.
What'll the games look like? Think PSP-quality, so nothing mind-blowing, but a first for the Android platform, which doesn't currently do 3D games. Engadget's source says titles being demonstrated include older PS One games as well as newer ones like God of War, Call of Duty: Modern Warfare (the mobile phone version?), and LittleBigPlanet. Look for an "augmented reality" angle as well.
When's it coming? As early as October, and as late as never, depending on the veracity of Engadget's source.
Who wants an Android 3.0 phone with access to Sony's PS One and PSP back-catalogue? Who knows, but one thing's certain: For the right price, it'd probably be a much more tempting offer than Sony's tragically overpriced and demographically misdirected PSP Go.