White wedding: Sony's PSX packs all you need for a networked entertainment hub into this box.

Following months of speculation and rumors, Sony has officially announced the PSX, an all-in-one home entertainment console built on the phenomenally popular PlayStation 2 gaming platform. The device will be available in Japan by the end of the year in two versions: one with a 160GB hard drive for 79,800 yen (about $727), and a second with a 250GB hard drive for 99,800 yen (approximately $910). No official schedule was given for a U.S. launch of the product, but Sony had previously hinted at North American and European availability sometime in 2004.

The PSX is Sony's boldest attempt to date to create a media hub--a single gateway that aggregates all the digital media in the home. In one minimalist white box, the company has crammed components necessary to duplicate the guts of a PlayStation 2, a DVD recorder, a digital video recorder, a TV tuner, and a networked media center. On paper, the PSX's massive hard drive and slot-loading DVD burner should allow for storing dozens of hours of TV programming (à la TiVo), with the option of archiving favorites to recordable DVD. Thanks to onboard Ethernet and USB 2.0 connections, the PSX will be easily networkable, though built-in wireless compatibility is glaringly absent, making it possible to stream digital music from a networked PC. Digital audio output means movies and some games can be played back in Dolby Digital or DTS surround sound when connected to a compatible A/V receiver.

What's up front: The PSX sports a slot-loading DVD burner for burning your favorite shows.

Despite its formidable specifications, the PSX seems to lack some commonsense features. While onboard Ethernet and USB connections would seem to make the PSX a natural candidate for home networking and Internet access, it looks as if the PSX won't make extensive use of either, at least initially. The slot for the company's ubiquitous Memory Stick media would seem to indicate photo-viewing, mobile-music, and video-transfer capabilities, but thanks to Sony's notoriously stingy digital rights management, music downloads to portable media are limited to its proprietary ATRAC3 format; MP3 playback (but not recording) is promised, however. Given the connectivity options on the PSX, compatibility with the latest HDTV technology seems doubtful, as does the console's ability to play high-end audio discs such as Sony's own SACDs or rival DVD-Audio.

Other, more strategic questions dog the PSX. Will the tens of millions of existing PS2 owners pay in excess of $700 for a souped-up version of hardware they already own? Will the PSX cut into sales of Sony's existing consumer electronics lines? And how will the introduction of the PSX affect Sony's next-generation PlayStation 3 gaming console, which many expect to roll out in 2005?

Because the specifications of the (presumed) U.S. version of the PSX will almost certainly differ from those of its Japanese counterpart, many of these questions will remain even after the product hits stores in Tokyo in just a few weeks. But whatever the final details, the PSX certainly has the potential to be a major milestone in consumer electronics. We'll be keeping close tabs on it to let you know whether it lives up to the hype.

Gamespot's Dan Tochen contributed to this story. See his full story here.