Tech hotspot Engadget is reporting that Sony Ericsson is currently working on a device that will function as both a PSP and a smartphone, bring both worlds together through the use of Google Android 3.0. The rumor also has Sony Ericsson working directly with Google to build a new gaming platform based on Android.

Sources speaking to the web site indicate that the device will look something like the PSP Go, sporting a touchscreen between 3.7 and 4.1 inches with a full slide-out keyboard and full PSP controls such as analog sticks and shoulder buttons. The new PSP phone device would allegedly be powered by a Snapdragon processor at 1GHz with both Sony Ericsson Xperia and Playstation branding.

It’s tough to tell at this early how much truth this rumor holds but you’ll definitely be able to find updated info here when and if it is released!