Sony hoping for merry Christmas

Sony is hoping for a Merry Christmas in the UK despite predictions of poor retail sales and the launch of the Xbox 360.

The consumer electronics giant faces a tough climate in the UK, with consumers widely expected to spend less on presents than last year. This means high-end gifts like its PSP could suffer.

At the same time, Microsoft will have the Xbox 360, its new games console, ready for the festive period long before the PlayStation 3 is ready.

Sony's PlayStation brand has traditionally dominated the console market but the Xbox 360 is expected to mount a serious challenge and will have a clear run at potential customers.

Uncertainty about the future of the economy has encouraged many consumers to take a more cautious approach to their present buying, with one survey suggesting Brits will spend £400 million less than last year.

However, Sony will be lifted by the early performance of the PSP. Sales of the portable entertainment device have been encouraging so far with up to ten million units sold worldwide.