At an E3 round table interview, Sony’s American CEO Jack Tretton said the company has considered putting a hard drive in the future PSP consoles.

“I think we definitely thought about it. I think that’s the trend moving forward.”

Tretton also mentioned that the declining prices of memory cards will also increase the possibility of Sony developing some sort of internal memory for the Playstation Portable.

With the launch of Go!View and the PS3 video store, digital distribution of movie content is now firmly part of Sony’s PSP and PS3 plans. Perhaps this is why Tretton teased that a PSP featuring internal storage was “increasingly likely”.

“I think the UMD has struggled, and that’s an understatement. That’s been a very frustrating thing. I don’t think (UMD movies) were handled very effectively.”

He also said that the digital distribution of movies, which the company is now pursuing, might be a “stake in the UMD’s heart,” since the new video store on PlayStation Network has already impacted sales of movies on UMD.

Now we should wait to see whether Sony chooses efficient, expensive hard disks or cheap and spacey drives.

Stay tuned for more E3 2008 coverage and check out PSP Game Downloads.