There weren’t any details, at least specific details, about whether or not the PSP2 would accommodate the original PSP's UMDs. With his words on the PSPGo, he made physical distribution sound like a thing of the past.
"[PSPGo] was the first device of its kind where you did not have packaged goods or pre-recorded media. I think PSPGo will blaze the trail for future iterations of the handheld."Back in February last year Shiny Entertainment's David Perry tweeted PSP2 will drop the UMD drive altogether, ever since there have been rumours about it being a device solely of digital content.
Ephraim also made it obvious that the PSP2 would be in direct competition with smart phones:
"The handheld space is very crowded, not just in the games category but also with smart phones and so on."