Sony's gaming smartphone, the Xperia Play, can do better job of playing PS One games than a Vita currently can. Yet it won't be upgraded to the latest version of the Android operating system, Ice Cream Sandwich, due to problems with the gaming software.
That's perhaps the price you pay for a unique phone among the herd of Android clones. The device has already lost half of its branding when Ericsson sold out to Sony, now it looks destined to remain in the backwater of Android phones (admittedly, along with thousands of other devices that can't or won't be upgraded).
However, the obvious question is, will Sony bother to bring out an uprated Xperia Play with a current class quad-core processor (NVIDIA's Kai is a budget quad option), graphics core and enough RAM to cater for gamers who like cutting edge smartphone games? No sales figures were ever announced for the Xperia Play (that I've found) and the drip feed of dedicated games for it has tailed off recently. So, it seems likely the phone didn't do that well.
Such a phone could easily play PSP or PS2 games and access a massive catalogue of emulated or other titles. But while Sony takes its sweet time getting PlayStation Suite going, there is no real driving force to bring such a phone to the market. The current model is available for around £250 SIM-free if you fancy one, and many are around second hand for a lot less.
UPDATE: Looks like that's a no then, according to this Inquirer article, Sony's main priority is to beef up Playstation integration on mobile devices, dismissing rumours that it could be planning to launch a second-generation Xperia Play handset. "Bringing the Playstation Network to other devices is important. Doing so creates a community based relationship with customers, like those found on social networking web sites."