JULY 12 | CULVER CITY, Calif.—Sony Corp. is expanding its PlayStation Portable handheld game console, positioning it more as a gaming unit than a media player and adding a version that will output to the TV.
A silver PSP will be bundled with the Daxter game, a memory card and Fox's Family Guy Freakin' Sweet UMD.
Although initially envisioned as an all-around media experience, the PSP has largely been abandoned by studios that once released films for playback on the system. Sony's home entertainment division is one of the few major studios issuing new film releases on the PSP's UMD format.
Sony has delivered 90% of this year’s PSP films. 20th Century Fox Home Entertainment did street Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan on UMD in March.
However, Sony Computer Entertainment is promising 140 new games for the PSP in North America this fiscal year. Also, Sony is launching in time for the holidays several new versions of the handheld, including limited editions, hardware-software bundles and new colors.
Sony cited its recent price cut on the PSP, from $199 to $169, for helping drive its decision to expand this business.
“The retail consumer response has been outstanding,” Sony Computer Entertainment America president Jack Tretton said during the company’s Wednesday presentation at E3 here. “Since we lowered the price in April, weekly sales have sustained a 90% increase over pre-price drop levels. UMD movie sales also grew, up 35% since 2006. This momentum feeds into our global plans to ship over 9 million PSPs this year.”
Kicking off first in September, among new PSP configurations, is a version that will be able to automatically output PSP films and games onto TVs, potentially broadening the appeal of UMDs with this ability to view titles on bigger screens. Also, it will be about 30% lighter and 20% slimmer than the original. A price has not yet been specified.
Coming in October for about $200 is a limited edition Star Wars set featuring a white Darth Vader design. The unit will come bundled with console-exclusive game Star Wars Battlefront: Renegade Squadron.
Also available in the fourth quarter is a new PSP Entertainment Pack, which will include an ice silver-colored model, the game Daxter, a memory stick and a Family Guy Freakin’ Sweet UMD from Fox. This also will retail for about $200.
Although the upcoming PSP to TV switchback feature "broadens the application for UMD and makes the [console] more versatile," Sony Pictures Home Entertainment is not sure these PSP advancements will be enough to encourage other studios to dive back into the business, said David Bishop, SPHE president.
But Sony is content for now being virtually alone in the market, which generates more than $10 million annually in UMD sales. The company is committed to delivering on average three new UMD titles per month through 2008.
“Obviously we’d like to see the whole category grow and [see Sony] not just [make up] a big market share within a shrinking category,” said Bishop. “We are seeing consistent [UMD] sales over the past six or seven months.”
In fact, at Sony, UMD titles are generating more revenue than the relatively more hyped emerging digital category.
“The download business will be a decent revenue stream,” said Bishop. “But if you took a snapshot of the last six months and looked at UMD and looked at downloads, UMD is bigger.”
Going forward, Sony plans to maximize PSP success by releasing UMD titles that appeal to the system’s core male teen consumer base. Some of its highest profile upcoming releases on UMD are Spider-Man 3, Surf’s Up and Hostel 2. Street dates have not yet been set.
“We have no plans of slowing down,” said Bishop. “We are more selective with the titles that we are putting out. We are trying to be sensitive to the demographic. Ghost Rider is a natural fit. But something more adult like Premonition is not.”
He added, “There will potentially be near 10 million households that have PSP by the end of the year, and even though that primary use will be gaming, it’s still an install base that we at Sony will continue to address.”
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