BIZ: Is SCEA now doing more to heavily push marketing and awareness for PSN, not just to the core audience but with people who may never have heard of PSN or don't know what it offers?

PD: Yeah, absolutely. That started Holiday '08 where we had dedicated TV advertising behind the video delivery service, and Home launched in an open beta so we had an opportunity to promote Home in a bigger way. You can definitely expect more of that going forward; we're at the point now where we've got a tremendous arsenal of content and features for the PlayStation Network that are huge drivers for the platform and we're seeing huge growth for PSN in its entirety. It'll be a much bigger part of our messaging going forward, and part and parcel with a much more aggressive marketing plan across the board. One of the things we talked about with our partners at DPS was they could expect one of the most aggressive marketing programs that they've ever seen from us this year. That goes across multiple platforms and PSN is a big part of it.

BIZ: How big is the current user base of Home? How sticky is the game (how much time are people investing)?

PD: We've got 4 million users in PlayStation Home worldwide, and the average session in Home is about 55 minutes. And I challenge you to compare that to the amount of time people spend on websites where you're in and out very quickly. To have someone spend 55 minutes, that's more time than they spend watching and hour-long TV show where there's 21 minutes of commercials. It's a very sticky environment and it's very engaging. We've got lots of great feedback and lots of interested parties and partners who would like to participate. We're going to nurture it and develop this... they're spending money. And some of our learnings so far are people aren't just spending money on the least expensive things – micro-transactions are a big part of what Home is all about, but surprisingly some of the more popular items aren't the cheapest things. They're things that cost a little bit more, like an apartment upgrade.

So users are engaged, they're willing to use the PlayStation Wallet to spend money, and they're looking forward to more. We're eager to rollout new services and new spaces, like the Warhawk space, the EA Sports space, Resident Evil and Street Fighter spaces from Capcom, so I think everyone is really fired up about Home within the publishing community and looking forward to getting their spaces launched. It's going to be a very big year for Home, and that will be a big driver for us.

BIZ: And the stickiness factor is something you could leverage with advertising partners as well right?

PD: Right, but we also want to make sure it's driving our core business. When we launched the Warhawk space we saw a sharp increase in the sales of the game. So that product has been out for a while but it's a great way to reengage a dedicated gaming audience about games that maybe they missed the first time around. So that's always been a big message for us; we're not just interested in aggregating a big audience with advertising. Of course, advertising is a big part, but we always wanted the service to be game-centric. Some of the early data and learnings are really, really encouraging.

BIZ: It's been a while since we've heard about any focus on the PlayStation Eye. There's really only one game that uses the device well, Eye of Judgement. Can owners of the Eye expect other IP to come to the PS3 to make their investment in the accessory more worthwhile?

PD: I've seen a lot of product development concepts that take a very innovative approach with how it can use the PlayStation Eye. So no announcements today, but we've got plans for how we can take advantage of that product to [increase adoption of the Eye] and create different ways of using it than how people are thinking about it today.

BIZ: Getting back to the Blu-ray topic for a minute... a lot of people have said digital distribution will mean that Blu-ray's victory is worthless. Regarding the video delivery service on PSN, are you concerned about digital distribution on your own platform cannibalizing Blu-ray?

PD: No, not at all. I think it's a way of giving consumers choice. You can download both high-definition and standard definition content, you can rent it or own it on your hard drive, but we also know that many consumers are going to want to buy the disc and so Blu-ray is an essential part of the platform. Our data shows that consumers are using [PS3] for both... I think a lot of people would like to think that physical distribution is going to go away tomorrow. We don't believe that. At Sony, digital distribution is a big part of the future but the two will co-exist for many, many years.

BIZ: I know we're out of time, so I'll make this my last question. How has the economy impacted SCEA's publishing philosophy?

PD: The economy hasn't changed our philosophy or strategy. Just like with any company, it's cause for concern, but we have plans in place and I feel like we're going to have a really strong year across the board. We also have to work hard to gain our consumers' trust and make them comfortable that when they buy a PS3, it's going to stand the test of time. The fact of the matter is we're the only console manufacturer that's ever launched a product that's had a 10-year life-cycle. And we've done that now not once, but twice. One of the great things about the PS3 is that if you buy it today you can be confident it's going to be the centerpiece of your entertainment for the next 10 years. Economically, that's a great value. Yes, in tough times people think twice about discretionary spending, but we also know people spend for value. They are looking for things that will last before they spend the money. We believe that plays right into our strengths.

BIZ: Thanks Peter, great talking with you.