Sony Hopes New PSP Will Help Dig Out Gaming Division

(MoneyWatch)  It's been clear for a while that Sony's game division has been in a world of competitive pain. The Playstation 3 still seems to lose money on every sale, with software title royalties not being enough to keep the organization in the black, and PS3 unit sales have flattened and are trending down. Now there's news of a new Playstation Portable model, the PSP Go, which is due for its official announcement tomorrow.

There have been a number of "leaks", including the mistaken posting and then pulling of a video on one of Sony's own sites:

In the video, Sony's John Koller said: "It's a 3.8-inch screen, it's 43% lighter than the PSP-3000, 16 gigs flash memory, Bluetooth support and all digital content so the UMD drive goes away.

"So it's going to be something a lot of consumers like - download straight to a hard drive."

Leaks? I'd suspect that these were more planned and part of an attempt to drive interest in the news, so people would be hanging on to the announcement when it happened.

There will also be a slide-out control pad, rather than having them on either side of the unit, as with the PSP 3000. Supposedly, Sony is targeting the PSP Go at more casual gamers, a powerful and lucrative market, as Nintendo's Wii has shown.

There are also rumors of a new PS3 that is supposed to be "redesigned" and "slimmer," which makes you wonder if Sony might not be simplifying the unit, possibly dropping the Blu-ray drive, to lower costs and, therefore, price. That would let Sony get back in the competitive game with the significantly cheaper Nintendo and Microsoft products and, who knows?, maybe even make some money on hardware sales.

Leaked Sony PSP Go image via Eurogamer.