In addition to sporting a 5 inch touchscreen, two analog sticks, optional 3G, and hefty processing power, the handheld PlayStation Vita can be used as a PS3 controller.

"You could drive a display from a PS3 game," said Sony R&D man Phil Rogers, as reported by Eurogamer. "PS3 can send data down to Vita and Vita can display it."

Such a feature for the PSP replacement could strike a blow against Nintendo's newest ventures.

Gaming giant Nintendo has been presenting the upcoming Wii successor, the Wii U, as a home console whose main innovation is a 6.5 inch touchscreen controller.

Nintendo has already announced an August 12 price cut for its latest handheld, the 3DS.

It was introduced at $249 (£229, €249, ¥24,980) in March, but will now retail for 30% to 40% less from August 12, at $169 and ¥15,000 (around £149 and €159).

The PSVita will also be priced at $249 when it launches during 2011's last few months. Precise details are expected August 16, during Sony's presentation prior to the Gamescom Expo, Cologne.