However the whispers last year that suggested the phone would hit shelves by Christmas 2009 may prove to be more accurate, with Japanese tech site Nikkei stating once again the phone is in the works.
Reuters is reporting that Sony is looking to set up a project team with Sony Ericsson to start developing the PSP-phone hybrid as early as next month.
Big bosses within Sony Ericsson have previously described such a partnership as "definitely plausible", and as the iPhone grows from strength to strength in the gaming sector, it seems reasonable to expect a challenger to enter the market packing Sony's gaming prowess mixed with the phone expertise of Sony Ericsson.
Just last month, Sony Ericsson launched the Aino phone that tied in very closely to Sony's PS3, allowing you to control your PS3 remotely from your phone, which is certainly one step closer to bringing the two brands together.
We'll keep you up to date with any news on this story, but let us know what you think to the idea of a PSP phone below.