Step 1: Take off the shelf smart phone hardware (The actual "phone" part is optional; the only radio hardware that is absolutely necessary for this is WiFi and maybe Bluetooth. Think iPod Touch.)
Step 2: Combine it with a custom case that has physical buttons (D-pad, ABXY, LR, etc.)
Step 3: Use Android for the operating system
Step 4: Make sure you've got first and third party support for games involving buttons (Sony and Nintendo both have the pull to do this).
Step 5: ???
Step 6: Profit!
What I'm basically saying here is, make a handheld that's the best of both worlds. An Android handset /and/ a dedicated handheld? What's not to love. Cell phone hardware is powerful enough these days for it to work, and since we're talking about gaming companies here, they've got the pull to rope in real developers, too. Not to mention in-house devs.
I think Sony tried this to an extent with the Xperia Play, but I'm talking about doing this for your flagship handheld, with all the effort behind it that that implies. The Xperia Play is nice, but it's a phone first, handheld second. This would be a dedicated handheld based around a standard platform.