Sony may start selling the PlayStation 3 in Japan as early as midyear and overseas by the end of the year, the report said. The PlayStation 3 will use an unidentified processor different from the PlayStation 2 chip, which is made by Toshiba Corp., the report said. Calls to the public relations department of Sony Computer Entertainment Inc., Sony's game unit, were not answered.

Tokyo-based Sony, in collaboration with International Business Machines Corp. and Toshiba, is developing a new processor capable of handling sophisticated graphics and sound over the Internet. The chip, called ``Cell,'' is still in development, Molly Smith, a spokeswoman with Sony Computer Entertainment America, said on March 4.

So far the article/rumor has been denied by Sony