When asked about the company’s future projections, Yamazaki-san revealed that Sega anticipates lower software sales next year due to the release of a new next-generation platform. While Yamazaki-san confirmed plans to support the new platform, he didn’t specify the identity of the hardware. Sources close to the company have suggested Sega plans to support Sony’s upcoming handheld platform “PSP†which is slated for release next winter worldwide. For reference, based on manufacturing schedules for several key components of Sony’s PlayStation 3 console, rumors suggest Sony plans to launch their next console in spring of 2005. Definitive release dates for Microsoft’s Xbox 2 and Nintendo's successor to the GameCube remain undisclosed.
http://www.polygonmag.com/news/index.php?id=997
I doubt this would be the PSP.. since it's a completely new platform, why would it drag down Sega's overall software sales? Sounds like GC2 to me.