Report: Sony working on PlayStation phone

But Sony Ericsson gaming device will be called Xperia

According to a report on the Wall Street Journal website, Sony Ericsson CEO Bert Nordberg has hinted that that the mobile-phone maker might be working with Sony to build a smartphone with a slide-out controller to play games.

Commenting on rumours that Sony Ericsson would take advantage of Sony's experience in designing and selling the Sony PlayStation Portable, the company Chief Executive said: "There's a lot of smoke, and I tell you there must be a fire somewhere. Sony has an extremely strong offering in the gaming market, and that's very interesting."

He also said that Sony Ericsson intended to make a big splash at the Mobile World Congress tradeshow next year, with a headline-grabbing device launch.

According to sources familiar with the matter quoted in the WSJ article, the 'PlayStation' phone will in fact carry Sony Ericsson's Xperia branding and run the Google Android OS, in order to avoid diluting Sony's position in the dedicated games device market.

Nordberg said the current generation of touchscreen smartphones isn't "optimized for games", but accepted that gaming on smartphones is a serious thread to dedicated portable gaming devices.

Nordberg said that it is not technically difficult to build a gaming smartphone, but that Sony's expertise would be useful in negotiating the rights to games titles. "I'm very glad that we work with a company like Sony, who actually knows how to do it," he added.

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