Sony looking into developing mobile phone / game gadget hybrid

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In hopes of competing against rising market demand for the iPhone and iPod, Nikkei business daily reports that Sony had actually been working on a gadget that combines the functionality of a mobile phone, along with the functionalities of a gaming peripheral, much like the Playstation Portable.

Nikkei reports that Sony plans to assemble a formal project team to look into integrating gaming technology with technology already established with Sony Ericsson mobile phones.

There has been growing speculation regarding the popularity of single portable gaming platforms, with companies like Capcom Co Ltd and Square Enix, both of which are huge gaming firms that have proven to be very reliable in terms of game quality, offering software dedicated to Apple’s iPod and iPhone. This has been something of a threat for Sony’s Playstation Portable, and Nintendo’s DSi.

Sony, however, has declined to comment on this issue.