Retailer Expansys is now selling the unlocked version of the Sony Ericsson Xperia Play for merely £260, almost half the suggested retail price of £500 at its launch.

The price cut is a strong hint that the handset, which is a blend of a mobile phone and a gaming console, has failed to attract the desired number of customers.

The repeated price cuts are also sufficient to explain why Japanese manufacturer Sony decided to call off the PSP Go altogether.

The Sony Ericsson Xperia Play is the first PlayStation approved handset with a slide-out game controller and touch joysticks. Based on Google’s Android 2.3 Gingerbread operating system, the phone features a 4-inch display that offers a resolution of 854 by 480 pixels, a Qualcomm Snapdragon MSM8255 processor clocked at 1GHz with an Adreno 205 GPU.

In addition, the device has stereo speakers, a 5-megapixel rear-facing camera with HD recording capabilities, a front-facing VGA camera, 400MB of RAM, an 8GB microSD card and a battery life of up to 8.5 hours.

To allure prospective customers, Expansys is giving away a free car charger, while Sony is offering five free, pre-installed games.