Game On: Sony and Nintendo Seek to Challenge Apple, Amazon, and Mobile Computing

(MoneyWatch)  There's news that Sony (SNE) is working on a line of handheld devices, reportedly including a smartphone that will run PlayStation games, as well as something like a cross between a netbook, an e-book reader, and a PlayStation Portable. Consider the Nintendo (NTDOY) DSi XL, released last fall in Japan and coming to the U.S. at the end of this month, and you have evidence that the gaming companies are taking on mobile computing. Given their experience and popularity, they could well hit a market sweet spot and give every other vendor a run for its money.

Sony and Nintendo have long had portable versions of their game consoles. For years they've been making portable electronics with sophisticated graphics display, high power, a smart eye to user design, and a dedicated fan base. They understand how to make small devices do heavy work and please users. And compared to a lot of other devices, the products are cheap. For example, the Nintendo DSi XL is supposed to be about $190. Now look at the trailer below for a sense of what it can do:

Not too shabby, even if it doesn't quite have the look and feel of the iPad. But then, it doesn't have the sticker price either, and will be compatible with a big number of popular games. In addition, it has two cameras, built-in music manipulation, Wi-Fi, a web browser, and an existing app store to download software.

I would expect Sony to deliver just as much on a device, if not significantly more. This move also explains the online media store that Sony has touted:

Sony's media platform, temporarily named Sony Online Service, will offer many of the same movies, television shows and music already available on iTunes. But the company aims to differentiate its service by allowing a wide range of devices to tap into its catalog of games, mainly older titles released for the original PlayStation console.

This is a smart direction for both companies. Yes, it's late, given who else has been moving into the space. But Sony and Nintendo have already tapped into tens of millions of users of portable devices, and the crossover potential is enormous. Given the degree of popularity of games on smartphones, the two companies will have a leg up given the titles they can make available. It's going to be an interesting year in the mobile space.

Image: Sony