Sony has announced that it will be dropping the price of its PlayStation Portable handheld console to $199 on March 22. That's $50 cheaper than the current PSP Value Pack, which is retailing for $249. The Value Pack does include a memory stick, soft case, remote, and headphones. Sony only mentioned the $199 PSP shipping with an AC adapter, so it could be further cut down from the Value Pack.

In addition to the price cut, Sony Computer Entertainment CEO Ken Kutaragi announced two new add-ons for the PSP: a PSP-300 digital camera with video voice-over-IP support.and a PSP-290 GPS receiver.

Kutaragi showed a slide that the camera would support a video chat via a format he called "motion jpeg" and an EyeToy game to be released in September. No price was mentioned. The PSP-290 GPS will be available in October. The PSP-290 will also attach to the top of the device and be silver in color.

Kutaragi also announced that Sony is developing a PlayStation emulator for the PSP, which will allow the handheld to play original PlayStation games. Kutaragi said the games would be distributed digitally to the PSP, possibly meaning an on-line content delivery service. Finally, Kutaragi announced that the PSP will support Macromedia Flash 6 games, and that an RSS feed reader would also be added to the handheld later this year.