At an E3 2008 roundtable, SCEA CEO Jack Tretton admitted that the company has had trouble establishing the UMD as a movie format.
"I think the UMD has struggled," he said, as reported by Kotaku. "And that's an understatement. That's been a very frustrating thing. I don't think [UMD movies] were handled very effectively."
He said it seemed as if the studios said "let's see if we can get people to pay USD 20 or 30 for crappy movies with less content."
Tretton noted that Sony was considering a PSP model with a hard drive or larger built-in memory, which he viewed as the trend going forward.
Yesterday, Sony's video download service for the PS3 and PSP went live. Tretton acknowledged that digital downloads will determine the fate of the UMD as a movie format, saying that they would either supplement the UMD's struggle or be the "stake in the UMD's heart."