Sony to Launch Handheld PlayStation Game Device

[The Evil Genius]

Some other PS2 news as well.

Sony to Launch Handheld PlayStation Game Device

LOS ANGELES (Reuters) - Sony Corp (news - web sites) (6758.T), the dominant force in the $30 billion video game market, on Tuesday announced it would launch a new handheld PlayStation gaming device to be available by the end of next year.

The announcement, which took industry watchers by surprise, puts Nintendo (news - web sites) Co. Ltd. (7974.OS) and its Game Boy handheld platform directly in the sights of Sony, just as in 1995 when Sony first ventured into the game console business.

Sony executives also announced a number of new exclusive games for the PlayStation 2 (news - web sites) and cemented an online sports game partnership with leading independent game publisher Electronic Arts Inc (Nasdaq:ERTS - news) as it aims to keep its lead over both Microsoft Corp's (Nasdaq:MSFT - news) Xbox (news - web sites) and Nintendo's lagging GameCube.

Sony's upcoming PSP device, scheduled for release in the fourth quarter of 2004, will feature a color screen, computing power equal to the original best-selling PlayStation and a new high-capacity optical disc created especially for it, the company told reporters and analysts at a news conference.

"To celebrate the tenth anniversary of the PlayStation's launch, we're bringing out a special new baby for the family. We will be launching a new handheld entertainment platform," said Ken Kutaragi, president and chief executive of Sony Computer Entertainment and the creator the PlayStation.

Sony said the PSP would also feature a 4.5-inch LCD screen, Memory Stick expansion slots.

Nintendo's GameCube console has struggled badly since its late-2001 launch, missing sales targets in the last fiscal year by nearly 50 percent. It is in third place in the console market behind Sony's market-leading PlayStation 2 and the Xbox.

Sony's surprise announcement came on the second day of the Electronic Entertainment Expo, or E3, the major trade show for the video game industry.

GAMES AND 'EYE TOY'

Sony also unveiled an exclusive deal with No. 1 publisher Electronic Arts Inc. (ERTS.O) for online sports games.

EA, which dominates the sports market with games like "Madden NFL," has balked at the financial terms of Microsoft's Xbox Live online service and also the direct control it would give Microsoft over some of EA's most-loyal customers.

To grow its competing online game audience, Sony said it would effectively give away the necessary online adapter with new sales of the PS2 for the same $199 price.

Sony Computer Entertainment of America President Kaz Hirai said Sony would also introduce some redesigns to the PS2 hardware, allowing it to play back home-made DVDs among other things.

He also said Sony would release a hard disk drive for the PS2 in the first quarter of 2004 in North America to coincide with the release of the online-only game "Final Fantasy XI."

One of the most striking features of Sony's presentation was the EyeToy, a new $39 USB device that will be released in October and enables players to control PS2 games with hand and body motions, project their own images on the screen and conduct video chat sessions online.

In another coup, Sony said Take-Two Interactive Software Inc. (Nasdaq:TTWO - news) has agreed to make the next game in the "Grand Theft Auto" series exclusive to PS2. The previous two "GTA" titles were both PS2 exclusives and have together sold more than 17 million units worldwide.