Insider sources have revealed that Sony have allegedly refused Sony Ericsson the use of the PlayStation brand for a new PSP handset.

Rumors about a PSP/phone hybrid aren’t exactly new, but according to Mobile Today, “several sources close to the matter” say that Sony Ericsson made a business case in December to make a PSP handset, but was turned down, with Sony claiming that it would only make a PlayStation branded phone on its own, effectively ending the partnership with Ericsson.

Sony and Ericsson have been in partnership since 2001 with the stated goal of combining Sony’s electronics expertise with Ericsson’s leading position in the mobile communications market, but since the beginning of last year, Sony Ericsson has seen its profits plummet by 97%, and posted a $346 million dollar loss, nearly four times what was projected.

Although, to be fair, Sony isn’t doing much better.

Source: via Joystiq

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