The Financial Times is reporting that Sony is in talks with the likes of Amazon.com, Movielink and CinemaNow with a view to allowing users to transfer movies downloaded on a PC to the portable console. The files are then stored on a Memory Stick, the size of which has increased considerably in the last 12 months.

The move will position PSP as an even tougher contender to the portable crown currently held by Apple’s iPod. Movies were made available on Apple’s iTunes service earlier this year alongside the release of a new range of movie playing MP3 players.

The move could be interpreted as another blow to Sony’s UMD format. After selling very well around the time of the console’s launch, sales of UMD movies have dipped somewhat forcing many retailers to pull the format from their shelves.

Microsoft recently launched its own online movie rental service to Xbox Live Marketplace users in North America. Console owners are currently able to access a range of high definition movie and TV content online via their machines. No date has yet been announced for the European launch of the service.

Movies are playing an increasingly important part in the plans of platform holders, with Sony touting the PS3’s Blu-Ray movie playback as an important feature and Microsoft recently launching its HD-DVD add-on for Xbox 360.