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PSP is "gateway drug" to consoles, says SCEA

SCEA's John Koller says that PSP owners are transitioning to the PS3 as they move along the adoption curve

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The PSP is a "gateway drug" into the console world, according to SCEA senior marketing manager John Koller.

Speaking at a roundtable at the 6th annual Wedbush Morgan Securities Management Access Conference in New York City today, Koller told the audience that the PSP has changed the way people think about handheld gaming.

"In the past, it was a small screen experience. It was something that was very difficult to have from a social perspective," he said. "Those things have changed."

Sony has also seen a demographic shift since launching the PSP in 2005. Originally targeting 28-40 year-old business men in the subway on the way to work, the reality has been that PSP has attracted younger and multi-ethnic users who play together.

"It's become, from a gaming perspective, a lot different than I think we even envisioned it when we first launched it," said Koller.

"That's a very good thing. It's expansionary. For us, the PSP is a very high growth, high margin business and something that is a very good product for us."

Koller said that the company looks at the PSP as a kind of "gateway drug" into the console world, as it were, with consumers who have purchased the PSP as their first "console" during the past few years moving on to the PS3 as they go along the adoption curve.

"For us, it has been a really interesting experience. The PSP really parlays well into our broader hardware business."

Sony is looking at a wide variety of other uses for the PSP besides just gaming, Koller said, and plans to bring its GPS peripheral to North America very soon. SCEA will also be releasing a PSP keyboard within the next twelve months.

Michael Pachter, the Wedbush Morgan Securities analyst who moderated the roundtable discussion, specifically addressed the perception that the PSP is a "terrible device that no one owns and is a disaster business."

"If you go look at sell through...and I have North America numbers...If you look at sell-through for PSP, at a much higher price point, it is about six months behind the adoption curve of the Game Boy Advance which averaged about USD 80 cheaper.

"That's not the DS, but the original Game Boy Advance - the Game Boy Advance that had no competition. So, people 'dis' the PSP, but the business is a pretty solid business," Pachter said.

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