The Sony PSP will be seeing some major updates to its networking capabilities later this year, IGN reports. Perhaps most importantly, this fall the PSP will gain direct access to the PlayStation Store, which will finally allow PSP users to download demos and other media directly to the device without having to sideload content via a PC or the PS3.

In addition, Sony will be offering PSP players some new connectivity options in the form of a new service that further ties the portable with the PS3, the report said. "This fall, select PSP titles will allow players to go through the PS3 to take their ad-hoc multiplayer modes online. When playing in this fashion, the PS3 can be used for text and chat messaging and also for matching." So far, only one title works with the service: Monster Hunter Portable 2nd G, a game popular in Japan that has already sold 2.4 million units over there.

Sony's chief executive was quoted in a German newspaper on Wednesday as saying that the company's joint venture with cell phone maker Ericsson must do better, Reuters reports.

"It's certainly been a difficult year but buying out a partner is never an easy thing," CEO Howard Stringer said in Die Welt in response to a question on whether or not the companies could go their separate ways.

"We have to work together again as we did two years ago. Or the joint venture will have to find its own solution," Stringer said.

Sony Ericsson isn't doing well in the U.S. at all, although it fares much better overseas. Recently Sony finally added T-Mobile as a carrier partner, after years of staying exclusive with AT&T—an obvious move given how the company's GSM handsets work with virtually no modification on either network.

Sony Ericsson announced that it is expanding its distribution network to include T-Mobile USA, MocoNews reports, after selling handsets exclusively on AT&T in the U.S. for years—and ">doing poorly as a result.

"This is good news for both parties," the report said. "Sony Ericsson has been affected by slower handset sales in part because of a weaker economy but also because its handset mix has lacked the variety of devices that other manufacturers have, such as full QWERTY keyboards and touchscreens." The deal also gives T-Mobile another supplier for its new 3G network.

Anyone still beholden to the mobile UMD format for movie watching on the go, listen up: Reuters is reporting that Sony announced a new version of its PlayStation Portable handheld games console that can also be used as an Internet telephone, to go on sale in Europe and the United States in mid-October.

Sony said at a video games convention in Leipzig, Germany on Wednesday that the PlayStation Portable 3000 will have a built-in microphone and a new screen which has more colors and is better suited for use outdoors, according to the report. The PSP can already run Skype, but the built-in microphone will make all the difference in using the thing as a phone. "We believe that this will establish the PSP as a viable communication device," said David Reeves, president of Sony Computer Entertainment Europe, at the conference.

The new PSP will retail for about $294 (199 Euros), which is 30 Euros more than what the current version costs in Europe. Sony plans to sell both versions concurrently, and oh yeah, they also play games.

It's the end of an era. The Associated Press is reporting that Bertelsmann AG will sell its 50-percent stake in music business Sony BMG to Sony Corp. in a $1.2 billion deal, the companies announced Tuesday. That gives Sony full ownership of the joint venture whose artists include Celine Dion, Bruce Springsteen, Justin Timberlake, Alicia Keys and Usher.

The new company will be called Sony Music Entertainment. "This move is consistent with our new growth strategy and will enable us to focus on our defined growth areas," Bertelsmann CEO Hartmut Ostrowski said in a statement. "Sony has been an excellent partner, and they are the right company to take this business to the next step and ensure that it realizes its full value and potential."

Sony continues to consolidate its portfolio as the only company that sells music players, cell phones, online music services, and is also a major music label that provides content for all of those things.

On the other hand, while Nokia is doing quite well, Sony Ericsson? Not so much. MocoNews reports that the beleaguered handset division managed to break even in the face of what it called "challenging market conditions and increased competition"— but net income nosedived in the second quarter, plummeting to just 6 million euros ($9.5 million).

In essence, sales were down 9%, gross margins fell to 23%, its average handset selling price fell, and its future growth will likely be limited to emerging markets, rather than any regaining of market share in the dominant ones. We'd like to see them at least give a serious effort to the U.S. market. Despite its complexities (such as the competing CDMA and GSM network technologies), there's plenty of opportunity here—a bunch of random Sony Walkman handsets on AT&T simply isn't enough.

Sony CEO Howard Stringer said the company plans to win back its electronic leadership—by improving its Internet-linked gadgets, wiping out losses in video games and TVs and pushing services and software in addition to hardware, according to the Associated Press.

Some of the new initiatives will include, according to the report:

- In the fall, an Internet service will deliver feature films and TV shows directly to Bravia TVs, without using satellite or cable distribution systems;

- A movie download service also will come for the PlayStation 3 game console in the summer;

- The company plans to more aggressively network its various products, including its TVs, cell phones, and game systems.

In recent years, Sony has lost some of its brand cachet, due to some highly publicized PR fiascos, the fact that it basically handed its Walkman market to Apple, and the slow start for its PlayStation 3 console.