Demand for Videogame Hardware and Software Flourishes this Year Despite Tough Economic Climate

PlayStation® Products Hotter Than Ever This Holiday Season


In an otherwise uncertain year for retail sales due to a sluggish economy, the videogame industry has been largely recession resistant with sales of hardware and software climbing to unprecedented heights year-over-year, emerging as a mainstream form of entertainment. Currently 2002 U.S. retail sales of videogame hardware, software and accessories have exceeded $6 billion, a 25 percent increase in dollar volume versus the same period one year ago. Particularly, on the heels of an unprecedented year for the category, industry leader Sony Computer Entertainment America consistently outpaces competitors, as consumers overwhelmingly prefer PlayStation products. In fact, sales of PlayStation products surged to their highest levels this year with retailers nationwide selling more than one million PlayStation®2 computer entertainment systems to date in the first couple of holiday shopping weeks. Sales of first party software also realized significant success with retailers. These initial sales figures indicate that the PlayStation 2 computer entertainment system will once again be one of the most sought after items this holiday season.

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"The videogame industry overall is stronger than ever this year and continues to outpace other entertainment categories," said Michael Gartenberg, research director with Jupiter Research. "As the industry leader having prevailing market share, Sony Computer Entertainment America acts as the barometer of health for the entire videogame industry -- if PlayStation does well, it's a good sign for other companies in the space, particularly those with ties to the company. Doing the heavy lifting for an entire industry also has its rewards, and it is expected that PlayStation will outperform competitors this holiday season, which can be attributed in part to the company's introduction of online console gaming."

The videogame industry typically experiences about 50 percent of its annual videogame sales in the fourth quarter as holiday shoppers wrap up hardware, and particularly software, to give as gifts. According to NPD FunWorld, a division of The NPD Group, the industry can expect to bring in an additional $4 billion by year's end, shattering 2001's all time high of $9.4 billion. Helping to meet this goal is the unparalleled success of the Network Adaptor (Ethernet/modem) (for PlayStation®2), which is expected to be among the best selling peripherals this holiday season and is still on track to deliver 400,000 units into the market by year end.

The overwhelming popularity of PlayStation 2, and what is sure to keep it on top of holiday wish lists this year, is due in large part to the system's affordable suggested retail price of $199. Also helping fuel demand for the PlayStation 2 are the numerous new titles available, including the runaway first party hit SOCOM: U.S. Navy SEALs, which sold more than 500,000 copies in just three months. Additional titles this holiday season include first party NFL GameDay™ 2003, ATV Offroad Fury™ 2, Sly Cooper and the Thievius Raccoonus™ and Ratchet and Clank™, as well as Madden NFL™ 2003 from EA Sports, Tony Hawk's Pro Skater™ 4 from Activision and PlayStation 2 exclusive Grand Theft Auto: Vice City from Rockstar Games.

These hot titles are helping to bolster the PlayStation 2 software-to-hardware tie ratio, which have never been higher. According to The NPD Group the PlayStation 2 currently enjoys a 7.9 to 1 year-to-date tie ratio, which means that, on average, for every one PlayStation 2 sold, there have been 7.9 games sold. Once again, PlayStation 2 enjoys a comfortable lead as compared to the Xbox software-to-hardware tie ratio of 5.7 and the GameCube at 5.5.

"Sony Computer Entertainment America understands what consumers want when it comes to entertainment, and we strive to deliver the best experiences to them through our constant introduction of new games and offerings like the Network Adaptor for online gameplay," said Jack Tretton, executive vice president, Sony Computer Entertainment America. "We are extremely pleased that consumers have overwhelmingly supported the PlayStation brand and continue to introduce the PlayStation lifestyle to new fans as they wrap up our products to give as holiday gifts."

The company's diverse offering appeals to mainstream consumers and keeps Sony Computer Entertainment America an untouchable No. 1. The company's 2002 holiday lineup includes:

  -- PlayStation 2 -- Now available for just $199 and offering CD/DVD
     playback functionality, PlayStation 2 appeals to gamers, music and
     movie lovers alike.
  -- Network Adaptor (Ethernet/modem) (for PlayStation®2) -- Gaming
     enthusiasts are buying Network Adaptors, available for $39.99 suggested
     retail price, that allow them to play online games via PlayStation 2
     regardless of the their Internet connection, analog or broadband.
  -- Game Titles -- There are more than 1,500 titles in the PlayStation
     library, including 400 for PlayStation 2, which includes 11
     online-enabled titles.  From hot online titles like SOCOM: U.S. Navy
     SEALs, NFL GameDay™ 2003 and ATV Offroad Fury™ 2 for older gamers
     to Sly Cooper the Thievius Raccoonus™ and Ratchet and Clank™ for
     younger audiences, PlayStation has something for everyone this holiday
  -- PS one™ -- For casual gamers, nothing is better than PS one, which
     is now affordable enough to be a stocking stuffer at $49; for on-the-go
     game lovers there's also the PS one/LCD combo, priced at $149 suggested
     retail price.

  About Sony Computer Entertainment America Inc.

Sony Computer Entertainment America Inc. continues to redefine the entertainment lifestyle with its PlayStation® and PS one™ game console, and the PlayStation®2 computer entertainment system. The PlayStation 2 computer entertainment system is set to revolutionize the home entertainment market, offering the most compelling interactive content and the capability to be used as a network terminal in the coming broadband era.

Recognized as the undisputed industry leader, Sony Computer Entertainment America Inc. markets the PlayStation family of products and develops, publishes, markets and distributes software for the PS one game console and the PlayStation 2 computer entertainment system for the North American market. Based in Foster City, Calif. Sony Computer Entertainment America Inc. serves as headquarters for all North American operations and is a wholly owned subsidiary of Sony Computer Entertainment Inc.



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