The RRP of Sony handheld games and media platform, Sony PSP, will drop to £130 / €170 in the UK and Europe from May. This follows a similar price cut in the US and is part of Sony's drive to improve sales volumes for the platform through 2007. The price cut and simultaneous introduction of a budget range of older games had been expected by the Screen Digest Games team and is already reflected in Games Intelligence forecasts.

Although PSP sales volumes have been satisfactory, they have fallen short of both Sony and industry expectations. Unsurprisingly the recent US price cut resulted in a hardware sales spike the following weekend and Sony must now attempt to maintain sales momentum.

To drive volumes through 2007 and beyond Sony is likely to focus on the media player capabilities of the platform with the introduction of downloadable, premium media content and integration with the home console, Sony PS3. Free content is already available but offering premium content wirelessly would start to fulfil some of the underexploited potential of the platform, as well as distinguishing it from Nintendo's handheld DS platform (which is focussed purely on gaming). The PSP can stream and download some types of content stored on PS3s, a capability which is not understood by many consumers, and will also be a component of Sony's online gaming hub, Home, when it launches in late 2007. The strategic importance of wireless content delivery to the platform is emphasised by the inability of Universal Media Disc format (UMD), Sony's proprietary disc media launched with the PSP, to gain traction amongst consumers as a format for non-games content.

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