Sony is to launch a new model of its PlayStation Portable (PSP) handheld machine in October to challenge Nintendo's market-beating DS.

The PSP-3000, which has already been shown off in August, has a built-in microphone and better LCD panel which can be seen outdoors.  The screen also offers a shorter response time which  makes moving pictures look better. Making phone calls on the PSP is easier thanks to the built-in microphone.

The new machine will sell for $182 which is the same price as the current PSP model. Sony sold 3.72 million units of the PSP in April-June worldwide only half the number of DS units flogged by Nintendo.

The PSP has been making a comeback lately in Japan thanks to Capcom's popular hunting action game "Monster Hunter Freedom 2G".  It has been even outselling the DS.