Why was the PSP redesign so subtle?

PD: Is this subtle? (hands over the PSP)

Well, it's lighter! But why keep the UMD?

PD: Delivery of media. Why get rid of it?

There have been problems with it in terms of how fast it loads, and it was having trouble getting sell-through on the movie content.

PD: This new design addresses the load times to a certain degree. The internal memory has been improved, so the load times are improved. The movie issue you're referring to is really a function of our not handling communication with Hollywood terribly well. When the PSP came out, it was a new format, and as with a lot of new formats, what Hollywood does is back up the catalog and say, "Come on guys, let's release all this stuff on the new video format." Unfortunately, we didn't do a good enough job communicating to Hollywood about who was going to be buying a PSP.

This is a fake example, but it doesn't make sense to do On Golden Pond on the PSP, because that's not the demographic that's buying this thing. When we launched, there was a proliferation of UMD content, and it wasn't the best strategic fit with the demographic. Now we've done a better job of going back and interfacing with Hollywood and saying, "Look, here's what we're doing, and here's what makes sense." I think sense then, they've been a lot more selective in terms of what makes sense and what doesn't. You've seen people like Target come back on with UMD offerings. There have been some hiccups, but I think reports of the UMD's demise have been greatly exaggerated.

I know a while ago, retailers were scared of stocking UMDs. It may have partially been because of the movies, but it was also on the game side because certain types of games sell really well on the PSP, while other types don't seem to at all.

PD: You're right. Again, communication is a big part of what we have to do as a platform holder. It's a powerful device, and it's kind of a PS2-based technology, but the cross-ownership between the PS2 and the PSP owner is about 80 percent, so you can't just do a port, because people don't want to buy the same game twice. It's very important that you make the right game, and when you do, I think you see great results. People are really excited about God of War, but we're not just taking God of War from the PS2 and rereleasing it. We're making a standalone game. That's the right approach, and that's how you make the PSP work.

The PSP has its own demographic. The DS has its own demographic as well, but the PSP's is more traditional with the hardcore type.

PD: I think you're probably right. I know this more from my days at THQ, where we did a healthy handheld business -- the DS is a kid's market, it's a licensed market, and it's a Nintendo market. The PSP is probably more of a core gamer market, at least up until now. One of the things that we're doing is that we're broadening the userbase. We've already established it with the older guys, and we want to go down to the teen and tween audiences.

Part of what we announced yesterday was that we'll have some bundles with Daxter and Family Guy -- two properties that appeal a great deal to a teen audience. The Star Wars SKU is pretty broad. There's older guys who grew up with Star Wars, but it's still popular among kids. We think those types of content offerings will bring a new audience to the PSP.

I think the DS audience is somewhat growing. Most people my age that I know have one, yet Nintendo still has this stigma somehow.

PD: You have one, but you're a game journalist.

None of my friends are, though, and they have them too, especially girls.

PD: A lot of our research shows that there is a stigma, and I don't know what age it happens, but carrying around a PSP is seen as cool. It's a cool piece of electronics like an iPod or an iPhone, though I'm not saying we're that cool. Carrying around a DS is like, "Oh, my little brother's got that." There is that little bit of stigma.

I think your market research is different from other market research that may have been done, because I've found the opposite to be true.

PD: You think the PSP is less cool than the DS?

No offense, but I actually do. In San Francisco, I see the hipsters walking around with the DS, and I see the guys in the basketball jerseys, the jocks, and the fratboy types [with the PSP].

PD: No offense taken!