Engadget has dropped one of the biggest Sony leaks in known memory with pictures and specifications of the rumored and long-awaited PlayStation Phone. They originally reported on the device (must read) several months ago with mock-up pictures and basic specs, but have now revealed specifications of a prototype version that seems in late stages of development.

Here is the complete engadget leak of the PlayStation Phone and two rather large galleries (1) (2), perhaps the most pictures I have ever seen for a major Sony product leak, showing it off.

Before I begin, what’s truly exciting is the fact that the PlayStation Phone will come to the market soon (late 2010/early 2011).

The first order of business is the new Sony Marketplace Android app that allows you to purchase a wide variety of games, apps, and perhaps movies and music. I imagine you can use your existing PSN log-in to access the store. It will be interesting to see if this is an evolution of the PlayStation Network, or just merely a seperate “Sony Marketplace” as Engadget puts it. I know Sony has been moving towards creating an all-in-one store. Is this it? Hard to tell. Maybe the beginning.

The specifications for the PlayStation phone absolutely delicious, especially since it will have Android 3.0 (aka Gingerbread), and a 1GHz processor (Qualcomm MSM8655) with 512MB of RAM. I really feel that 1GHz is the sweet spot for mobile devices at the moment and this is a good play by Sony and is also triple the power of the PSP/PSPgo.

There is no specification as to what type of screen the PlayStation Phone has, but merely that it is 3.7-4.1 inches. Sure looks like four inches to me, which is yet again another improvement on top of the current PSP which has a smaller screen, but not by much because the PSPgo has a 3.8 inch screen.

I also sense more clarity in this screen than past Sony mobile devices after looking at the pictures, as I have tried to take pictures of LCD screens before and they usually don’t come out this clear. It’s definitely a touchscreen. Perhaps its an improved, SLCD with high PPI (pixels per inch). That would be incredible if Sony launched a device with PPI like the iPhone 4. Any type of device with high PPI is really going to win consumers in the end. It’s like night and day.

Back again is the layout of the PSPgo, which is awkward looking but actually quite usable. Interestingly enough though is the revelation that there the middle panel between the D-Pad and buttons is a multi-touch area that can be used in many ways, but perhaps best as virtual joysticks.

Virtual joysticks have become very good, not as good as real joysticks by any means, but rather close. However, the biggest problem with them in the past was the fact they are superimposed on the screen you are playing the game on. That’s not really fun to me and I never found it reliable, but can admit I have had some successes with it. This changes everything. Now the virtual joysticks are on a multi-touch screen below the main display. The band of D-Pad, X, Circle, Square, Triangle, Select and Start are back together, as well as L and R on the shoulder behind the screen.

No specs on the camera were listed, but it sure does look to be pretty nice and definitely has a LED flash. If I had to guess, the camera would be at least 8 megapixels, although I think Sony could surprise everyone with maybe a 12 megapixel camera? Does that sound to crazy? I’m not sure.

There was also no word in the engadget article if the back of the device still has touch sensors or not, which has also been another consistent rumor for this device. Touch sensors basically allow you to move around with your fingers behind the device touching the back of it. Both pictures engadget has with the back of the phone has been digitally altered (I checked extensively in the second photo, and yes, that is covered slightly as well) making it difficult to identify what is hiding back there.

On a lighter note, the PlayStation Phone also uses MicroSD cards, signaling Sony is playing no games in making this device truly open. If it ran off MiniUSB I’d probably have a heart attack.

What’s odd is the fact in the engadget leak about this story there is little mention of Sony Ericsson, in fact none. But they didn’t need to say anything. This product is a result of Sony getting two major divisions to work together to create something, which has always been so difficult in the past.

In some ways, the PlayStation Phone almost seems like the successor to the PSP, otherwise known as the PSP 2. With so many differences between this and what we have now, this seems like the platform and hardware the PSP 2 will run on. So what kind of games could you expect on the PlayStation Phone? It’s hard to tell. PlayStation 2 quality? Higher?

I’ also have a feeling that Sony may play a phone and a non-phone and similar specs. Seems logical for maximum impact.