GS: A lot of people feel that’s Sony’s way of taking on all comers – who do you feel is your main competitor right now?

DK: I would say that if you asked any gamer, our main competitor is the Xbox 360, just because the target demographic that we’re going after is similar. That being said, I think in regards to Nintendo and the Wii, it’s easier for us to go after the hardcore gamer first, as that’s kind of always been our target, and if we want to expand from there to the more casual gamer, it’s probably easier for us to do than start with the casual gamer, and try to go up to the hardcore gamer. It’s an easier message for me to deliver.

GS: Are you worried at all about Nintendo taking any marketshare from the PS3, or do you really feel like people will buy one HD console and the Wii?

DK: Yeah, for us it’s apples and oranges when you compare the PS3 with Wii. They’ve done a great job of saying exactly who they’re going after, the casual gamer, the hardcore gamer, and we’ve said exactly who we’re going after. And you can’t, when you put the systems side by side technologically, and even price-wise, they just don’t compare to each other.

GS: What about the handheld market, how important do you think that’s going to be, going forward?

DK: I think handheld is incredibly important for us, particularly as we start developing more and more downloadable content. And I’m not just talking about games, I’m talking about entertainment content as well. Already the TiVo-to-go option for the PSP is turning into a huge hit for us, as people discover that they can take the shows they’ve already stored on their TiVo and put it on their PSP and while they’re riding the bus to work or to school, they can watch television shows on the PSP, I mean that’s huge. You can’t do that on anything else.

So again, I think when you compare the two products, the Nintendo product versus our product, it’s kind of apples and oranges. We’re providing more of an entertainment system, and they’re focused more on gaming.

GS: Have you found it difficult to balance the games that are released on PSP in the West and in Japan? It’s definitely doing better here, because it’s more hardcore and graphic-oriented.

DK: Yeah, you have to realize what games work best on the PSP, like action games work really well, sports games work really well…those aren’t the most popular games in Japan – it’s RPGs. And RPGs don’t necessarily lend themselves to the PSP, although I think we’ve got some really great ones. And it’s just a matter of getting the consumer in Japan accustomed to the idea of playing an expansive RPG on a handheld device.

GS: And how do the emulated downloads work for PSP? Have you announced pricing?

DK: Basically you just download them to the PS3, and bounce it to your PSP, and those will all be under $5. And then there will be downloadable content from hotspots.

GS: This is a bit of a stretch, but I know there’s a very good Saturn emulator for the PSP [the GiriGiri emulator has been officially licensed for PSP, and was used for Atlus' portable version of Princess Crown]…

DK: Ah, Saturn – that takes me back!

GS: As an ex-Saturn person, do you think there’s any chance of that downloadable content there?

DK: Oh, absolutely! Don’t say that I said you’re going to be able to download Saturn games though. The cool thing about Sony and about the platforms we’re working on is that it does open itself up to allow a lot of downloadable content from other catalogues, and you heard Ken talk about how we could do something like the entire Turbo Grafx 16 catalogue, pulling that over. So that’s what’s possible, but we haven’t announced anything.

GS: I’m an old Saturn fan, so…

DK: Panzer Dragoon, man, that was the game.