PSP Turns 3: An Interview With Sony's John Koller

Game Informer: What’s going on with the PSP now that it’s hitting the three-year mark?

John Koller: We’re entering the third year of the platform, and we talked about it really being the biggest year, and it turned out to be so. Ever since we launched in 2005, we’ve been talking about the multifunctional aspects of the PSP, but really centering on gaming. I think what a lot of the consumers found last year to their liking was really an expansion in gaming, unique genres, unique games, but the price drop certainly helped us target a whole new demographic, going after that teen consumer group with a little bit less discretionary income than maybe the 20-something consumer. They were able to get into the market and really adopted the PSP as their own. The PSP hardware SKU we launched in September, the PSP-2000 made the PSP more portable, and a lot of consumers started adopting the PSP for music and for video and for some of their portable travel use of Internet browsing. I think what we saw was the price drop really assisting, but that the new hardware SKU pushed sales over the top. Our sales for the holiday season were spectacular—we actually couldn’t keep it in stock. We were in a really in a very good position; from a demand perspective it was very, very strong, and as we go into this year it’s remaining very strong. We’ve seen a real uptick year over year, a significant uptick—we’re up 85 percent in sales since the price drop last April. It’s a platform that’s got a ton of momentum, a lot of wind on our back. I think as we embark on our usual trip to talk to publishers and other people about the platform, I think it’s a lot easier conversation when you’ve got the strength of a very solid install base at this point. This year, I think is going to be another very good year, and we’re looking at a number of key launches—both software and peripheral—to really aid the momentum that we’re seeing now.



GI: The PSP really does seem to have a dual personality. It’s part device and part game machine—it’s in a pretty unique position in the marketplace. How had that been, positioning it in the marketplace, the fact that it can be used for so many different things?

Koller: You’re bringing up exactly what we wrestled with when we first launched the PSP. What it’s centered in, and how we positioned it in the market, is that it’s a multifunctional device with a gaming heart. It’ll always be a gaming system. We have such a solid lineup of games and will continue to do so, highlighted most recently by God of War. It’s primarily centered as a gaming machine. That said, the multifunctional aspects really round our what the PSP is and differentiates it from any competitive platform—and that’s including the DS and the iPod, the Zune and the Zen and all the other handheld products that are available in the market, inclusive of mobile phones.

The way that we market the product is to continue to promote the gaming portion, but add ancillary messaging about the multifunctional area—the addition of Skype and Internet radio. You can play your music and your movies on the PSP. It makes for an all-in-one device. I think as consumers start to find that there’s this integration of functionality between their various mobile devices, they want one or two screens to bring with them. We’re finding in a lot of our research that the consumer’s using the PSP because of its gaming but then also because it has these other elements as some of the other devices they own, but they don’t want to bring four or five devices with them in their pocket. The PSP solves all of those multifunctional demands in one product.

GI: The PSP seems to be getting better and better with each firmware update. How much of the recently added functionality—like Skype and Internet radio—was actually on the radar while the PSP was being designed? Were those always planned to be a part of the system eventually, or were they added because they seemed suitable for the platform?

Koller: That’s a really good question, and it’s actually pretty insightful. The way that we planned the product, to have these firmware updates and to be able to unleash new aspects on the consumer set—we didn’t always plan some of these since March ’05. Some of these are the result of consumer demand, quite honestly. Skype’s one of those. We had a real groundswell of reaction in a lot of our quantitative research and a lot of consumers asking for VOIP or a way for them to communicate with the PSP. As they brought it around and found that more and more wireless hotspots were available and becoming a little more ubiquitous, I think a lot of consumers were saying, “Let’s be able to communicate with this so I can talk with someone while I play SOCOM or while I play Madden or whatnot, and I can meet them online.” When we saw that interest, we took it back to Tokyo and met with the product-planning group, and Skype was added. It’s something that we’ve noticed in the few months since its been launched, we’ve noticed an uptick in consumers who have bought the headset and remote control. I think we’re seeing the results of that demand. Not every firmware update is something that was originally planned. I think a lot of those were the result of consumer demand in our territory and I think some other territories globally.

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