Sony's portable video games console, the PlayStation Portable. The company says it will add the Skype telephone service to its slim PlayStation Portable handheld console in Japan this month, enabling users to make free or low-cost telephone calls.

Sony will start selling microphones for the PSP-2000 in the Japanese market on March 19 as part of its efforts to broaden the appeal of its video game consoles amid fierce competition with rival Nintendo.

After a system software update planned for March 18, PSP users will be able to chat for free to other Skype users and, for a charge, call landlines and mobile phones anywhere in the world, Sony's game unit said in a statement.

The service was started for the PSP in Europe and the United States in January but Sony was forced to delay the launch in Japan because the microphones did not meet the Skype specifications.

Skype, which was bought by eBay in October of 2004, uses a peer-to-peer (P2P) network to enable users to make free Internet telephone calls to one another through their computers.

Users can also use the service to call landlines or mobile phones at low rates.

The logo of the Sony Playstation 3 is pictured at a party held by Sony celebrating the new Playstation 3 game console in Berlin March 22, 2007. Sony Corp's PlayStation 3 will double its installed base this year, posting the strongest growth of any video game console and narrowing the gap with rivals, research firm iSuppli said on Thursday.

Worldwide sales of the PS3 are expected to be 10 million units this year, compared with 12.2 million units for Nintendo Co Ltd's (7974.OS) Wii and 7.5 million units for Microsoft Corp's(MSFT.O) Xbox 360, iSuppli said.

As widely expected given its strong sales, lower price and games that appeal to a broader audience, the Wii is in line to become the industry leader with a total global installed base of 30.2 million units.

"In this stage of the new-generation video game console market, consumers are showing they'd rather be entertained and pay less for their consoles than shell out more for the latest and greatest technology," iSuppli analyst Pam Tufegdzic said in a report.

The PS3, which has lagged the other consoles due to its high price and dearth of blockbuster games for most of last year, would double its base to 20.3 million and by 2011 would lead the industry with some 38.4 million users.

The Xbox 360, which has struggled in Japan and faces a tough battle in Europe where the Sony brand has dominated, would see its user base grow to 25.7 million units by the end of 2008.

(Reporting by Scott Hillis, editing by Maureen Bavdek)

According to Ars Technica

By Ben Kuchera

Our inside source of all things video gaming has been right almost every time it comes out of the shadows to give us information, so I'm going to dispense with the back story. Wherever his or her information is coming from, it's usually solid. After I spoke to Sony about the possible discontinuation of the 80GB PS3 model, I lit the mole-signal.

Working late into the night on Saturday, I heard a noise behind me. For both of our safety, I didn't turn around. "You've talked to Sony," the mole said in a gravelly whisper. "Tell me what they told you."

I repeated the information we reported on Friday: Sony is sticking to a two-model approach at retail, but the company won't comment on whether or not the other model would be the 80GB system. The 40GB system seems safe. I asked the mole what information he had.

"Sony is, in fact, phasing out the 80GB PS3. Sony is going to stay with the two-SKU approach though, and the prices look to stay the same," the mole told me. I heard sirens in the background, and the mole seemed nervous. "The Spiderman 3 pack-in will disappear as well once the 80GB unit is gone. In order to maintain a similar value proposition to the 80GB/Spiderman 3 bundle, I expect to see a storage increase to 120 or 160GB at the same price point, plus the new Dual-Shock 3 controller... what are you trying to accomplish with this story?"

"I'm just trying to get to the bottom of Sony's plans for their hardware so my readers can decide whether or not they should buy now, or hold off. But I'm only one man," I say.

"Now we're two," the mole whispers, and when I look around in surprise... my informant was already gone.

Sony's PlayStation Portable (PSP) is displayed at an event in Tokyo, in July 2007. Sony said Monday that it had teamed up with Skype to enable users of its new slim PlayStation Portable handheld video game machine to make free or low cost telephone calls around the world.