Apparently the NGP has been under development since the start of 2008. This news comes from Sony Worldwide Studios president Shuhei Yoshida himself as he makes a few statements about the development process for the Next Generation Portable. This matches the same time rumors circulated on the internet that Sony was working on a new handheld.
Yoshida also explained that the reason for the lack of first party games being released for the PSP was because Sony had already begun working on the NGP and felt no need to continue supporting the PSP with first party content. Since they started working on the NGP only sixteen different games had been released by Sony themselves. This is understandable but also depressing when you think of what games could have been made if Sony still had supported the PSP with their own games.