Not to be mistaken with Ryvita, the healthy bran snack, Vita means life in Latin.
"It will be the first product that blurs those lines, allowing you to interact like never before," promised Kaz Hirai to the crowd of media, retailers, and developers at the company's E3 press conference in LA.
The PS Vita will come with an OLED touchscreen display, Wi-Fi and 3G models.
In the US Sony has teamed with AT&T as an exclusive carrier partner, claiming it is the best network in America - even though its PlayStation phone, the Sony Ericsson Xperia Play, has just gone on sale with Verizon. The announcement garnered a number of laughs from the audience.
Sony also announced a number of new features for the PS Vita including the ability for gamers to start playing a game on the PS Vita and then carry on playing that game on the PS3 when they get home.
Another new feature is something called Near.
Developed specifically for PlayStation Vita and pre-installed on each system, "Near" will allow users to find out what other PS Vita users in their vicinity are currently playing and what titles are most popular in the area.
Users can meet with friends and new players virtually - regardless of what games they are playing - simply by sharing their game information across PlayStation Network on the go via AT&T's mobile network, or when they're at a Wi-Fi hotspot.
"Near" also enables location-based gaming features such as "gifting," in which a user can access virtual game-related items that other users are sharing, through checking in at geographic locations that others have also visited.
Additionally, PS Vita will come pre-installed with a newly developed application called "Party." "Party" will let you voice chat or text chat not only during online gaming, but also when users are playing different games or using different applications such as an internet browser.
The PlayStation Vita system will have both Wi-Fi and 3G/Wi-Fi models in the US for $249 and $299, respectively. Additional details about AT&T data plans and pricing will be announced later.
Sony has said the console will cost 299 euros in Europe.
The console will be launched globally by the end of the year.
Better start saving.