After much speculation from gamers and the media on the future of PSP going the hard drive route, it seems as if now the top guys at Sony are thinking and evaluating the same idea.
Speaking in a roundtable discussion at E3, Sony Computer Entertainment America (SCEA) CEO Jack Tretton openly admitted that the company has had trouble establishing the UMD as a movie format.
"I think the UMD has struggled," he said, as reported by Kotaku. "And that's an understatement. That's been a very frustrating thing. I don't think [UMD movies] were handled very effectively." He said it seemed as if the studios said "let's see if we can get people to pay USD 20 or 30 for crappy movies with less content."
Tretton noted that Sony was considering a PSP model with a harddrive or larger built-in memory. Surely, Tretton must be looking over the shoulders of other successful movie and music players on the market and must realize that removable flash memory will eventually make the PSP obsolete.
With its slower cacheing of music and movie lists, and the increase in storage space of for smaller hard drives as well as drops in price it may be only a matter of waiting for the PSP to get a built-in hard drive.
Along with this discussion, on Tuesday Sony's video download service for the PS3 and PSP went live. Tretton also admitted that this form of delivering media to both of Sony's consoles may very well determine the fate of the UMD as a viable movie format, saying that they would either supplement the UMD's struggle or be the "stake in the UMD's heart."

Downloading and storing films and television programmes from the store would make life so much easier and it's a fact that UMD sales will suffer (if they could possibly suffer anymore). I personally only have ONE UMD movie, and that's the free copy of Spider-Man 2 that was sent to me after registering my PSP. Bye bye, UMD. Now, just for Sony to release the video store in PAL territories...
"Surely, Tretton must be looking over the shoulders of other successful movie and music players on the market and must realize that removable flash memory will eventually make the PSP obsolete."
What? So years down when we can finaly fit over 60 gigs on a flash (32 achieved already) it makes the PSP obsolete? I am looking and there is a 16 gig stick on the market. With less chance a mechanical failure isn't flash the better option?
UMD's for games fair enough but for films its a waste of space, maybe since the introduction of the new slim model with TV out it kinda makes up for it a bit by making them more useable, but asking people to go and buy movies on a UMD as well as DVD etc is just ridiculous, most people with half a brain would buy the film on DVD for half the price of a UMD then rip it to their PSP's.
Now that we have video service for the psp, who needs UMDs?
I just assumed the UMD was already discontinued.
damn, that really sucks for people like me who just bought the psp bundle with god of war chains of olympus, just to see sony starting to think about abandoning the format and going the hdd route, hence trying to make me buy another psp, making my 200$ + tax a complete waste, thanks sony. It really makes me wonder what the point was of releasing the psp 2000 without an hdd, surely they couldve had both umd's for games n such, and then the hdd for downloads but w/e
i kinda wish they used mini cds in the beginning like those 8cm cds instead of umds