Sony is touting its sequel handheld to the PlayStation Portable as being as powerful as a PlayStation 3 to its licensed developers.While the first PSP was a near-match to the PlayStation 2 console, Sony looks to make the PSP2 a next-gen console like an Xbox 360 or PS3 a handheld reality.

Sony is setting the release for some time in Q4, as early as October.

Nintendo is also set to release their competing 3D handheld, the 3DS, by the Easter period.

The PSP2 will not feature 3D functionality according to currently released information, though it will sport a HD screen with dual joystick controls, all under a similar rectangular housing to the previous PSP.

Downloadable content will share some similarity to the surging app market, but Sony is looking to keep media-rich content in physical stores including graphics-intensive games.

Sony will reveal more on the PSP2 at gaming expo, E3 and GDC, so readers can expect more on the upcoming handheld soon.

Separately, the Sony Ericsson PSP phone is set to be revealed at the Mobile World Congress next month in Barcelona.