UPDATE: Sony Debuts Powerful Portable Rival To Nintendo's 3DS

Gearing up for a showdown with Nintendo Co.'s (7974.OK) upcoming 3DS portable game machine, Sony Corp. (6758.TO) said Thursday it will debut a powerful successor to its PlayStation Portable handheld videogame system later this year.

The Japanese electronics and entertainment conglomerate also unveiled an application called the PlayStation Suite that will enable any mobile phone or tablet computer running Google Inc.'s Android operating system to play older PlayStation and similar quality videogames.

Both announcements reflect the shifting dynamics in the portable videogame market.

Dedicated gaming devices are now in direct competition with increasingly powerful smartphones like Apple Inc.'s iPhone running simple games, but Sony sees its forthcoming game system, code-named "Next Generation Portable," as a major technological leap to existing mobile handsets and videogame machines.

Sony is also venturing into unchartered territory by broadening the reach by opening up its PlayStation software platform to devices other than Sony-branded hardware.

"We want to make it possible to play PlayStation-quality games on devices other than the PlayStation Portable," said Kaz Hirai, president of Sony's networked products and services group.

The new device, know by the acronym "NGP" will come with a five-inch organic light-emitting diode touch-screen display, a rear touch panel and 3G wireless connectivity. Sony said the new machine will be available this holiday season. Sony said the new handheld promises can play games with graphics comparable to its PlayStation 3 home console.

Pricing for the new machine wasn't immediately available.

Once hailed by a Sony executive as the "Walkman for the 21st Century," the PlayStation Portable has failed to live up to the company's own pre-launch hype. It has sold a respectable 67 million units since its late-2004 debut, but Sony's game machine has been overshadowed by Nintendo's DS handheld which has sold twice as many units as the PSP in a similar time frame.

Sony's revamped portable game machine will face a new competitive hurdle that its predecessor did not face upon its debut. Smartphones are a real threat, offering simple-to-play titles for consumers looking to kill time, and more sophisticated games that can meet the needs of most traditional videogame fans.

Its handheld rival, Nintendo, is also about to introduce a new handheld device next month. The Nintendo 3DS allows users to play 3-D videogames without the need for special glasses, marking the first major game machine to offer that capability. Nintendo will release the 3DS first in Japan on Feb. 26 and then in March for the U.S. and Europe.

The 3DS will sell for Y25,000 in Japan and $250 in the U.S. at launch.

The pricing for the new machine remains a major question mark including how it plans to deal with mobile carriers for the 3G connectivity.

If Sony is looking for clues about how to deal with the pricing of a new powerful game system, it needs to only search its own track record. Sony's PlayStation 3 was priced several hundred dollars above its competitors when it launched in 2006. Even though it had generated intense buzz, the hefty price tag put off consumers and put the console behind Microsoft Corp.'s Xbox 360 and Nintendo's Wii.

It has since made up some ground, but only after heavy discounting.

-By Daisuke Wakabayashi, The Wall Street Journal; +813-6269-2834; Daisuke.Wakabayashi@wsj.com

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