Demand for Videogame Hardware and Software Flourishes

Demand for Videogame Hardware and Software
Flourishes this Year Despite Tough Economic Climate PlayStation(R) Products
Hotter Than Ever This Holiday Season

FOSTER CITY, Calif., Dec. 16  —
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(R)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.

"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(R)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(TM) 2003, ATV Offroad Fury(TM) 2, Sly Cooper and
the Thievius

Raccoonus(TM) and Ratchet and Clank(TM), as
well as Madden NFL(TM) 2003 from EA Sports, Tony Hawk’s Pro Skater(TM) 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/DVDplayback functionality, PlayStation 2 appeals to gamers,
music andmovie lovers alike.

— Network Adaptor (Ethernet/modem) (for
PlayStation(R)2) — Gamingenthusiasts are buying Network Adaptors, available for
$39.99 suggestedretail price, that allow them to play online games via
PlayStation 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(TM) 2003 and ATV Offroad Fury(TM) 2 for older gamers to Sly
Cooper the Thievius Raccoonus(TM) and Ratchet and Clank(TM) for younger
audiences, PlayStation has something for everyone this holiday season.

— PS one(TM) — 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(R) and PS
one(TM) game console, and the PlayStation(R)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.

SOURCE Sony Computer Entertainment America
Inc.