The GPS PSP add-on was initially launched in Japan in 2006 but it did not really generate a lot of attention from game developers. In Japan there are currently only a few applications taking advantage of the GPS: two mapping and navigation applications, a software to look at stars in the sky and a virtual golf caddy. But these applications are not “games” stricto sensu. The only bit of location-based gaming was in Metal Gear Solid Portable Ops from Konami (released at the end of 2006) which contains a feature that takes advantage of the PSP GPS add-on. In this game the PSP, when using the GPS receiver, acts as a sort of "radar" that players use to recruit new soldiers (in the game) by moving around (in the real world). It spices up a bit the game but it remains a rather limited use of GPS in a gameplay.
In the most recent weeks Sony Computer Entertainment Europe launched in Europe a GPS add-on for the PSP too, but there again, no game but a navigation software (developed by Nav N Go). Starting with navigation to create an installed base of GPS module owners, then developing games for this module might be the Sony strategy. But waiting until 2009 for launching a navigation software in the U.S. will not make this market happen any time soon.