Engadget is reporting that this image right here is the PlayStation Phone. Sony is said to be working on such a device that may be available soon, possibly in time for the holidays. It's supposedly going to run Android 3.0 (which seems increasingly unlikely), have a 1GHz processor, 512MB of RAM, a microSD card slot, and somewhere around a 4-inch screen -- possibly slightly smaller or slightly larger.

Sliding out the phone reveals a design similar to the PSP Go, with your navigation controls on the left, buttons for game play on the right, and a touchpad in the middle.

Sony will also have its own Marketplace for the phone where games can be purchased and downloaded straight to the device. It's unknown whether or not Sony will provide access to the standard Android Market. It will also be interesting to see how much battery life Sony will be able to squeeze into this.