Even though neo has a 3.7-inch screen, it has the smallest screen among the 3 phones. It has quite similar specs with the arc except it does not have zero air gap featured on the SE Xperia arc. Design wise, it is a tad bulkier. In terms of pricing, it will be lower than arc.
According to Sony Ericsson, this is actually the “replacement” for the Vivaz. And based on the discussion, it was mentioned that the camera and the camera button are placed in such a position that it will be very comfortable for anyone to hold it with both hands, and not touching the lens (as the lens is almost center at the back).
The camera button is also slightly located away from the edge.
Here is the other side.
And the bottom
The SE Xperia neo also has a front facing VGA camera.
Basically, the 3 phones cater for different purpose. In my opinion, the PLAY is for people who spend more time on playing games (especially on the move). With PLAY, you can play more sophisticated games with its game pad (and it is PlayStation certified).
For SE Xperia arc, I guess those people who wanted a beautiful phone would find arc appealing, plus it has all the nice features that further enhance the phone.
Finally, the SE Xperia neo is for those who wish to experience Android smartphone and yet wanted to have all the features of an high end model. But bare in mind that the neo is NOT an entry level smartphone. It has way to many features to consider as entry level.
Personally, I have not had time to really explore these phones. So, if you have other opinion, please comment 🙂