Typically at this point in the hardware cycle, he said, the cost of developing new videogames would lead to a loss. But in a conference call with investors yesterday, Riccitiello said revenue from digital content will keep EA profitable.

“In the face of, unfortunately, somewhat of a headwind relative to console, we’re getting top line growth, robust digital growth, robust margin expansion, robust EPS growth, while affording the investment in the next-gen console. I don’t think, going back to our foundation in ’82, that’s ever happened before. So what we are guiding for is entirely unprecedented, and it’s a function of everything we’ve been saying on the call so far. … It’s our hope to be able to accelerate top line through a transition and accelerate bottom line growth through a transition because we won’t be facing sort of negative console compares.”

Nintendo expects to release the Wii U later this year, which will require new games that tap into both the TV and a touchscreen device. Neither Microsoft or Sony have unveiled plans for their respective next-generation hardware systems, the Xbox and PlayStation. Riccitiello did not mention the new consoles by name, and instead referred any direct questions about hardware to Sony, Microsoft and Nintendo.

“We intend to invest $80 million in Gen4 console development in fiscal ’13. We are strong believers that console will return to strong growth, and represent a great opportunity — one that is in lockstep with our digital plans.”

In fiscal 2012, EA generated $1.2 billion in digital revenues, representing a 47 percent increase year over year. In the past six months alone, FIFA 12 — one of the company’s traditional packaged good titles — was able to break $100 million in digital revenues for the first time. This year, it’s predicting digital revenues of $1.7 billion, representing 40 percent of the company’s overall business.

Even though Riccitiello painted a positive outlook, he failed to turn to the tide.

Along with a broader market meltdown, the company’s stock fell 65 cents, or 4.3 percent, at $14.48 a share. At that price, the company’s stock is off more than 40 percent from its 52-week high of $26.13 a share.

During the call, Riccitiello also tried to stress that while Star Wars: The Old Republic is an important title for the company, it is getting an unfair amount of attention by analysts. In the quarter, he said the number of subscribers fell to 1.3 million from 1.7 million when the game launched.

“So while I understand there’s an enormous amount of interest, I don’t know that it warrants as much as what we’re seeing right now,” he said, according to a SeekingAlpha transcript.

The final highlight from the call was when Riccitiello questioned how much Zynga paid for OMGPOP and its hit title Draw Something, which was No. 1 for a short period of time. He didn’t actually name the two companies, but it was implied.

“Right now, what I’m starting to see is valuation expectations that assume that these things are all hockey stick moving up and to the right with no end in sight, and I think those are bad assumptions,” he said. “Some of them will work, some of them won’t, but they can’t all be worth the multiple that I’m seeing in the market right now.”

The Redmond, Wash.-based company said today that for the first time, Xbox Live users are now watching more movies and TV and listening to music than gamers are using it to play online games.

The recent shift is worth noting given the mind-boggling number of hours gamers are willing to spend online destroying opponents on the battlefield or football field.

Microsoft declined to break down the number of hours spent, but as an example, 3.3 million players logged seven million hours on Xbox Live on the first day alone that Activision’s Call of Duty was available back in November.

What’s more, the growth of entertainment is not at the expense of gaming. Online gaming on the Xbox is up over the past year, too. In fact, Xbox Live usage — spanning gaming and entertainment — is up 30 percent year-over-year.

The shift toward entertainment is not completely unexpected, since Microsoft has been investing heavily in turning the console into a more general entertainment device for the living room. Sony’s PlayStation has a similar emphasis and Nintendo’s upcoming console, the Wii U, is expected to support entertainment applications.

In December, Microsoft rolled out a massive software update to the Xbox that allowed users to control the console using the Kinect. As part of the update, it also began to add more than 40 content providers to the console to increase the catalog of live and streamed TV, movies and music.

As previously announced, Xbox today launched voice-controlled TV apps from Comcast and HBO Go in the U.S., and MLB.TV throughout North America. To access these apps, you must be a subscriber, meaning it is not meant as a cable subscription substitute.

It was all part of last weekend’s kickoff for an exhibit celebrating the art of the videogame. The three-day GameFest also featured speakers, music performances and movie screenings.

The GameFest part was just for the opening weekend, but “The Art of Video Games” exhibit itself runs through Sept. 30 in Washington, D.C.

Each generation of gaming gets its moment in the spotlight — from the early Atari, Coleco and Intellivision consoles, through Nintendo, Sega Genesis and Dreamcast, to today’s Xbox 360, Wii and PlayStation 3.

The exhibit is interactive, allowing visitors to not only view the evolution of the graphics in videogames, but also to try their hand at some classics. Lines formed as kids and adults alike queued up to play Super Mario and Pac-Man on a giant screen.

For more on the exhibit and the accompanying GameFest, check out our photo gallery:

Despite some industry gains from January to February, overall sales totaled $1.06 million last month, down from $1.33 billion year over year; software sales fell 23 percent to $464 million, and hardware sales dropped 18 percent to $381.4 million.

February’s best-selling software title was Call of Duty: Modern Warfare 3, from Activision Blizzard.

While most hardware platforms posted declines year over year, “all current-generation platforms improved sales over January 2012 by more than 50 percent,” NPD said in a note.

A consistent bright spot has been the Microsoft Xbox, which was the best-selling hardware platform for the seventh month in a row. Some 426,000 Xbox units were sold in February, marking the 12th consecutive month Xbox has held more than 40 percent of the current-generation console market share.

And all eyes were on the Sony PlayStation Vita handheld gaming device, which came to market in late February. Only four days of retail sales for the PS Vita were included in this reporting period, but the device gave overall hardware unit sales a month-over-month boost. Not including the PS Vita, hardware unit sales increased by 62 percent over January, NPD said; with PS Vita sales included, the increase was 87 percent.

“More than 1.2 million PS Vita units have been sold globally since launch,” Patrick Seybold, senior director of communications at Sony Computer Entertainment America, said in a statement. “Customer satisfaction rates are very high and momentum will continue as gamers get their hands on a deep lineup of blockbuster titles that take advantage of PS Vita’s unique features, including cross-platform play with the PlayStation 3.”

In January, the videogame industry saw a double-digit decline in physical software sales, as my colleague Tricia Duryee reports, following a number of noteworthy game launches ahead of the holiday season.

Starting April 1, Sony will move many of its products across categories into what is known as unilateral pricing or minimum advertised pricing, in which retailers agree to charge no less than a set price for a product. The company plans to move 140 product lines to such pricing.

“I think our brand is well-loved and well-revered, and still synonymous with premium quality,” Phil Molyneux said in a roundtable with reporters on Tuesday. “If we are not communicating effectively what does the product allow the consumer to enjoy … then that may have a drag on the brand.”

The company also plans to shrink the number of products. In TVs, for example, it will shift from 40 models last year in the U.S. to 22 this year. Molyneux said the company’s goal is profitable growth, but declined to say whether the U.S. business is making money today, or to identify specific targets.

It’s been a time of big change for Sony, which recently replaced its CEO and has also taken full ownership of its cellphone unit, previously run as a joint venture with Sweden’s Ericsson.

As first reported by AllThingsD last month, Sony has been cutting jobs in its U.S. operations.

On Tuesday, Molyneux said the company has now reduced its workforce by more than 300 positions in its U.S. operations, through layoffs and reducing open positions. Part of that was an effort to reduce the number of layers in the company, he said.

“If we have too many layers, our ability to act with speed, to be agile and to communicate effectively inside the community was hindered,” he said.

Molyneux acknowledged that one area that continues to need work is its product naming, which often consists of a jumble of numbers and letters.

“We’ve got some work to do on tidying up our naming conventions on products,” he said.

Another piece of Sony’s new strategy is to work more closely with retailers. Under a new program, stores will earn the maximum profit margins only when they hit a set of predefined criteria.

The company is also working to promote itself in new ways, Molyneux said, such as through social media.

Updated, 4:45 pm PT, to add more details on the strategy and job cuts.

I’m working on getting copies of the criminal complaints, and will add them here when I do, but here’s the rundown: It looks like one of the group’s insiders got caught and probably made some kind of misstep in covering his tracks, and then worked secretly with the government to inform on other members. This is exactly what I said was likely to happen in this case, way back in June.

According to Fox, the one who turned is a New Yorker named Hector Xavier Monsegur, who worked under the handle Sabu. He’s 28 years old and the father of two, and lives on the Lower East Side of Manhattan. This is his Twitter feed. He’s been a cooperating witness since June, which coincides nicely with the moment when the first rumors started to emerge that the FBI had penetrated the group.

Fox says that according to documents that will be unsealed in a New York federal court today, Monsegur pleaded guilty in August to several hacking-related crimes. His cooperation led to charges against five more people in Chicago, the U.K. and Ireland. Among them is Jake Davis, the 18-year-old resident of the Shetland Islands, who went by the handle Topiary, and whom police in the U.K. collared on Aug. 1.

The other four are Ryan Ackroyd, who went under the handle “Kayla.” He’s a Londoner. Two people from Ireland were also charged: Darren Martyn, whose handle was “pwnsauce,” and Donncha O’Cearrbhail, who called himself “palladium.” Jeremy Hammond of Chicago went by the handle “Anarchaos.”

The news makes the following tweet by Monsegur, a.k.a. Sabu, seem sort of ironic. Among his final tweets, before word emerged that he had helped turn in his comrades, were several railing against informants and other “cowards.” Clearly, he was keeping up a brave public face:

Without informants or companies bending over+giving up their customer data the feds would be further behind than they are now. Ride up.

March 5, 2012 7:59 am via Twitter for BlackBerry®ReplyRetweetFavorite

@anonymouSabu

The Real Sabu

Anonymous, the wider hacker group with which LulzSec teamed up last year, was quick to urge its followers to block Sabu’s Twitter account.

@anonymouSabu is now controlled by feds. We have blocked the account and we suggest you do as well. #BlockAnonymouSabu

March 6, 2012 10:38 am via TweetDeckReplyRetweetFavorite

@anonops

AnonOps

Hammond, the one in Chicago, was said to be the one who led the hack against the private intelligence company Stratfor. He was profiled by Chicago Magazine in 2007 and portrayed as something of a digital Robin Hood.

Ackroyd is said to be the one who found the weaknesses in the servers of the U.S. Senate that led to its being attacked in June. Hacking federal computer systems is considered a serious crime in the U.S., but is something that LulzSec said, in the posting to Pastebin at the time, that they carried out “just for kicks.”

Update: So the US Attorney’s Office in New York has issued its press release confirming most of what Fox reported. Here it is.

Six Hackers in the United States and Abroad Charged for Crimes Affecting Over One Million Victims

Four Principal Members of “Anonymous” and “LulzSec” Charged with Computer Hacking and Fifth Member Pleads Guilty; “AntiSec” Member also Charged with Stealing Confidential Information from Approximately 860,000 Clients and Subscribers of Stratfor

U.S. Attorney’s Office March 06, 2012

Five computer hackers in the United States and abroad were charged today, and a sixth pled guilty, for computer hacking and other crimes. The six hackers identified themselves as aligned with the group Anonymous, which is a loose confederation of computer hackers and others, and/or offshoot groups related to Anonymous, including “Internet Feds,” “LulzSec,” and “AntiSec.”

RYAN ACKROYD, a/k/a “kayla,” a/k/a “lol,” a/k/a “lolspoon”; JAKE DAVIS, a/k/a “topiary,” a/k/a “atopiary”; DARREN MARTYN, a/k/a “pwnsauce,” a/k/a “raepsauce,” a/k/a “networkkitten”; and DONNCHA O’CEARRBHAIL, a/k/a “palladium,” who identified themselves as members of Anonymous, Internet Feds, and/or LulzSec, were charged in an indictment unsealed today in Manhattan federal court with computer hacking conspiracy involving the hacks of Fox Broadcasting Company, Sony Pictures Entertainment, and the Public Broadcasting Service (“PBS”). O’CEARRBHAIL is also charged in a separate criminal complaint with intentionally disclosing an unlawfully intercepted wire communication.

HECTOR XAVIER MONSEGUR, a/k/a “Sabu,” a/k/a “Xavier DeLeon,” a/k/a “Leon,” who also identified himself as a member of Anonymous, Internet Feds, and LulzSec, pled guilty on August 15, 2011 in U.S. District Court to a 12-count information charging him with computer hacking conspiracies and other crimes. MONSEGUR’S information and guilty plea were unsealed today. The crimes to which MONSEGUR pled guilty include computer hacking conspiracy charges initially filed in the Southern District of New York. He also pled guilty to the following charges: a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Eastern District of California related to the hacks of HBGary, Inc. and HBGary Federal LLC; a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Central District of California related to the hack of Sony Pictures Entertainment and Fox Broadcasting Company; a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Northern District of Georgia related to the hack of Infragard Members Alliance; and a substantive hacking charge initially filed by the U.S. Attorney’s Office in the Eastern District of Virginia related to the hack of PBS, all of which were transferred to the Southern District of New York, pursuant to Rule 20 of the Federal Rules of Criminal Procedure, in coordination with the Computer Crime and Intellectual Property Section (“CCIPS”) in the Justice Department’s Criminal Division.

Late yesterday, JEREMY HAMMOND, a/k/a “Anarchaos,” a/k/a “sup_g,” a/k/a “burn,” a/k/a “yohoho,” a/k/a “POW,” a/k/a “tylerknowsthis,” a/k/a “crediblethreat,” who identified himself as a member of AntiSec, was arrested in Chicago, Illinois and charged in a criminal complaint with crimes relating to the December 2011 hack of Strategic Forecasting, Inc. (“Stratfor”), a global intelligence firm in Austin, Texas, which may have affected approximately 860,000 victims. In publicizing the Stratfor hack, members of AntiSec reaffirmed their connection to Anonymous and other related groups, including LulzSec. For example, AntiSec members published a document with links to the stolen Stratfor data titled, “Anonymous Lulzxmas rooting you proud” on a file sharing website.

The following allegations are based on the indictment, the information, the complaints, and statements made at MONSEGUR’s guilty plea:

Hacks by Anonymous, Internet Feds, and LulzSec

Since at least 2008, Anonymous has been a loose confederation of computer hackers and others. MONSEGUR and other members of Anonymous took responsibility for a number of cyber attacks between December 2010 and June 2011, including denial of service (“DoS”) attacks against the websites of Visa, MasterCard, and PayPal, as retaliation for the refusal of these companies to process donations to Wikileaks, as well as hacks or DoS attacks on foreign government computer systems.

Between December 2010 and May 2011, members of Internet Feds similarly waged a deliberate campaign of online destruction, intimidation, and criminality. Members of Internet Feds engaged in a series of cyber attacks that included breaking into computer systems, stealing confidential information, publicly disclosing stolen confidential information, hijacking victims’ e-mail and Twitter accounts, and defacing victims’ Internet websites. Specifically, ACKROYD, DAVIS, MARTYN, O’CEARRBHAIL, and MONSEGUR, as members of InternetFeds, conspired to commit computer hacks including: the hack of the website of Fine Gael, a political party in Ireland; the hack of computer systems used by security firms HBGary, Inc. and its affiliate HBGary Federal, LLC, from which Internet Feds stole confidential data pertaining to 80,000 user accounts; and the hack of computer systems used by Fox Broadcasting Company, from which Internet Feds stole confidential data relating to more than 70,000 potential contestants on “X-Factor,” a Fox television show.

In May 2011, following the publicity that they had generated as a result of their hacks, including those of Fine Gael and HBGary, ACKROYD, DAVIS, MARTYN, and MONSEGUR formed and became the principal members of a new hacking group called “Lulz Security” or “LulzSec.” Like Internet Feds, LulzSec undertook a campaign of malicious cyber assaults on the websites and computer systems of various business and governmental entities in the United States and throughout the world. Specifically, ACKROYD, DAVIS, MARTYN, and MONSEGUR, as members of LulzSec, conspired to commit computer hacks including the hacks of computer systems used by the PBS, in retaliation for what LulzSec perceived to be unfavorable news coverage in an episode of the news program “Frontline”; Sony Pictures Entertainment, in which LulzSec stole confidential data concerning approximately 100,000 users of Sony’s website; and Bethesda Softworks, a video game company based in Maryland, in which LulzSec stole confidential information for approximately 200,000 users of Bethesda’s website.

The Stratfor Hack

In December 2011, HAMMOND conspired to hack into computer systems used by Stratfor, a private firm that provides governments and others with independent geopolitical analysis. HAMMOND and his co-conspirators, as members of AntiSec, stole confidential information from those computer systems, including Stratfor employees’ e-mails as well as account information for approximately 860,000 Stratfor subscribers or clients. HAMMOND and his co-conspirators stole credit card information for approximately 60,000 credit card users and used some of the stolen data to make unauthorized charges exceeding $700,000. HAMMOND and his co-conspirators also publicly disclosed some of the confidential information they had stolen.

The Hack of International Law Enforcement

In January 2012, O’CEARRBHAIL hacked into the personal e-mail account of an officer with Ireland’s national police service, the An Garda Siochana (the “Garda”). Because the Garda officer had forwarded work e-mails to a personal account, O’CEARRBHAIL learned information about how to access a conference call that the Garda, the FBI, and other law enforcement agencies were planning to hold on January 17, 2012 regarding international investigations of Anonymous and other hacking groups. O’CEARRBHAIL then accessed and secretly recorded the January 17 international law enforcement conference call, and then disseminated the illegally-obtained recording to others.

***

MONSEGUR, 28, of New York, New York, pled guilty to three counts of computer hacking conspiracy, five counts of computer hacking, one count of computer hacking in furtherance of fraud, one count of conspiracy to commit access device fraud, one count of conspiracy to commit bank fraud, and one count of aggravated identity theft. He faces a maximum sentence of 124 years and six months in prison.

ACKROYD, 23, of Doncaster, United Kingdom; DAVIS, 29, of Lerwick, Shetland Islands, United Kingdom; and MARTYN, 25, of Galway, Ireland, each are charged with two counts of computer hacking conspiracy. Each conspiracy count carries a maximum sentence of 10 years in prison.

O’CEARRBHAIL, 19, of Birr, Ireland, is charged in the indictment with one count of computer hacking conspiracy, for which he faces 10 years in prison. He is also charged in the complaint with one count of intentionally disclosing an unlawfully intercepted wire communication, for which he faces a maximum sentence of five years in prison.

HAMMOND, 27, of Chicago, Illinois, is charged with one count of computer hacking conspiracy, one count of computer hacking, and one count of conspiracy to commit access device fraud. Each count carries a maximum sentence of 10 years in prison.

DAVIS is separately facing criminal charges in the United Kingdom, which remain pending, and ACKROYD is being interviewed today by the Police Central e-crime Unit in the United Kingdom. O’CEARRBHAIL was arrested today by the Garda.

The case is being prosecuted by the U.S. Attorney’s Office for the Southern District of New York. The investigation was initiated and led by the FBI, and its New York Cyber Crime Task Force, which is a federal, state, and local law enforcement task force combating cybercrime, with assistance from the PCeU; a unit of New Scotland Yard’s Specialist Crime Directorate, SCD6; the Garda; the Criminal Division’s CCIPS; and the U.S. Attorneys’ Offices for the Eastern District of California, the Central District of California, the Northern District of Georgia, and the Eastern District of Virginia; as well as the Criminal Division’s Office of International Affairs.

The charges contained in the indictment and complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

And here’s the initial indictment on Hector Monsegur, initially filed in the US District Court for the Southern District of New York in August of last year. I’m gathering up documents on the other people charged in this and will share it as I get it.

Monsegur

The 51-year-old Mr. Hirai, who oversees Sony’s consumer electronics and videogame divisions, has been considered the front-runner to take over from Howard Stringer, who will remain executive chairman until June, and then become chairman of the board.

Read the rest of this post on the original site »

Speaking to reporters at the Consumer Electronics Show in Las Vegas yesterday, Sony Computer Entertainment Chairman Kaz Hirai reiterated Sony Computer Entertainment President Andrew House’s declaration that the company has no plans to unveil its new gaming console at E3 this summer.

“Andy is absolutely right in that we are not making any announcements at E3,” Hirai said. “I’ve always said a 10-year life cycle for PS3, and there is no reason to go away from that.”

Ten years? If Sony’s sticking to that cycle, we may not see the PS4 until 2016.

This year, much of the focus is going to be on the company’s just-launched LTE network and all of the devices that the company plans to have running on it soon.

On Thursday, AT&T announced that it has added service in several more cities, including three of the biggest markets: Los Angeles, New York and the San Francisco Bay Area. In all, the carrier is now in 26 spots, though its network remains far smaller than the LTE footprint of Verizon Wireless.

The company has announced several LTE devices, but a bunch more are expected to be shown later on Monday. The most closely watched of these will be a new Nokia device running Microsoft’s Windows Phone, though we’re also expecting to hear from AT&T about other gadgets, including Samsung’s 5-inch Galaxy Note and Sony’s PlayStation Vita.

AT&T’s act runs from 9 am to 11 am PT. We’ll spare you a full recitation of the script and instead just offer the Playbill summary, along with insight on the performance and maybe a little inside info about the cast.

Earlier:
8:48 am: The good news: AT&T is passing out 5-Hour Energy bottles, more than enough for its keynote. The bad news: No power outlets. Many in the press row are fretting their laptops won’t have enough juice to make it through.

8:50 am: To keep everyone entertained, AT&T has been posting a set of “Would you rather” questions. My favorite one so far was, “Would you rather telecommute using a 14.4Kbps modem or commute two hours each way carpooling with the Kardashians?”

Modem all the way, personally.

Other questions include, “Would you rather use a cellphone from the 1980s or a pager from the 1990s?” and, “Would you rather only be able to text during the day and make calls at night or only be able to make calls during the day and text at night?”

It’s entertaining, but I’m not sure making people choose between two painful options is the branding message you need, AT&T.

8:55 am: OK, we should be getting started in a few minutes. Going to save laptop juice.

By the way, sponsors of AT&T’s developer summit include the expected array of partners — Samsung, HTC, Microsoft — as well as Nokia.

Somehow they managed to get RIM to pay twice, as both QNX and BlackBerry are sponsors.

9:03 am: We must be getting close. AT&T just put a slide on the big screen with its SEC-appeasing “safe harbor” warning. Basically, if things change, you can’t say they didn’t warn you.

9:08 am: AT&T Mobility CEO Ralph de la Vega takes the stage. Overview so far, no news yet.

Expect the new devices toward the end.

9:12 am: Handoff to head marketing guy David Christopher, who is taking a stroll down memory lane, going back 16 years to when the company launched its developer program. I’ll let you know when we get back to the present.

9:13 am: AT&T is announcing a few new programs for developers, including some new programming interfaces to tie into its network.

Lots of carriers are doing this and there are benefits to developers that want to do the extra work. The downside is that developers already have to support multiple operating systems and HTML5. For many, writing to each carrier’s developer tools is too much extra work.

Among the new APIs, though, is carrier billing for payment — that appeals because it helps developers actually get paid.

9:20 am: AT&T is bringing an interesting developer out — Viva Vision chief and former NFL player Joe Tafoya.

Tafoya is showing an app his firm built for Dallas Mavericks player Jason “Jet” Terry. Incidentally, Terry went to high school with our own Tricia Duryee, who is helping out with this live blog, via Webcast.

9:25 am: Some stats on AT&T’s TV product, U-Verse. It’s up to 3.6 million customers, as of last year’s third quarter.

9:31 am: Lots of talk about partners and stuff. Apparently developers have to pay a $99 registration fee and can get unlimited access to the programming interfaces this year.

I’m ready for that energy drink.

Anyway, now up is Chief Technology Officer John Donovan.

He’s talking about the company’s 4G strategy, which includes both its HSPA+ network as well as the LTE network it is just building out now.

“AT&T delivers the best possible blended speed,” Donovan said, noting this is paying off for iPhone 4S users, since that phone supports HSPA+ but not any other 4G network.

He’s talking about the company’s network investments including 80,000 new antennas and 150,000 network improvements.

He’s suggesting the network is going to become like oxygen. Personally, I’m happy that I am able to get oxygen on my own, without having to pay AT&T or rely on them (or anyone else) to deliver it. But that could be just me.

And, as Tricia points out, wireless connectivity is inherently more limited than oxygen molecules, which are abundant, even if increasingly in the shape of carbon dioxide.

9:39 am: AT&T also has a cloud strategy, with droplets and other features that I am a little cloudy on. Got distracted by the clouds on the PowerPoint slide, which look like fluffy little pillows to me.

Donovan promises the ability to pay hourly or monthly for its cloud services and pledges more news on this front this year.

Now he’s talking more about programming interfaces. Developers do care about this stuff, but pretty sure they are all here or watching the Webcast. So I will spare you most of the details.

Donovan said the company expects to see 10 billion calls to its interfaces this year, more than double what it saw in 2011.

9:47 am: Pretty sure we will get some new devices at some point.

But sadly that point is not now.

9:52 am: Promising sign — now up is Senior VP Jeff Bradley who heads AT&T’s device business.

First up, though, are the winners of a developer conference …

Still a bit away from the device news. AT&T is talking about a technology for developers designed to allow their apps to be more power and bandwidth efficient.

10:08 am: Zynga and Pandora talking about how that tech helps their apps be smarter about when and how to connect to the network.

The tool also works across other devices and networks, Zynga noted.

And, Bradley said, it will be made available as open source code later this year.

10:11 am: And, just ahead of the device news, AT&T is talking about AppCenter — its new tool for app discovery. It’s more of a magazine pointing to existing app stores and mobile Web sites than yet another marketplace.

10:12 am: Back on stage are David Christopher and John Donovan. They are talking about three apps created in last night’s hackathon.

It’s similar to what AT&T does at its foundries, but this time live. The winner gets backstage passes to AT&T’s concert with Nickelback as well as the opportunity to be featured in an AT&T ad.

First up is Action X-Ray, which lets you share your extreme sports injuries with friends. It’s really good for targeted ads. Say, if you have a head injury, you get an ad for a helmet.

Next is HopiChest, a health-tracking app for kids to enter stats about their exercise and health habits and tweet it to their friends.

Finally is Sleepbot, which is a mobile and web app designed to help users get a better night’s sleep and compare one’s sleep with others who are tracking their Zzzzzs.

Now the audience is being asked to vote by text message for a winner.

10:19 am: AT&T isn’t the only carrier making news at CES today, by the way. Verizon has just announced the Verizon Jetpack, a new hotspot from ZTE and a new phone from LG.

10:22 am: AT&T is ready to start with its device news as well, with emerging devices head Glenn Lurie on stage. First up is gaming and Sony’s PlayStation Vita.

AT&T has already said it will have the wirelessly connected game console (an announcement made almost a year ago). It will debut next month.

Now it is sharing the fine print.

Sony’s SVP Kuni Suzuki is out, but decides to talk first about Sony’s Tablet P, a dual-screen clamshell device that folds out into a tablet-size screen. Sony announced the device last year and said it would come to AT&T, but again, we’ve been waiting on final details like price and availability.

10:30 am: Now he’s showing off the PS Vita, which is already on sale in Japan, Hong Kong and Taiwan.

He’s showing pictures of the long lines that accompanied the launch. However, after a strong initial burst, sales trailed off.

The Vita is coming to the U.S. on Feb. 22, by the way.

Data plans for the Vita will be similar to the iPad, AT&T announced. For $15 a month, gamers will get 250 MB of data and for $25 a month, they will get 2GB.

However, since the Vita is a designated gaming device, it will be interesting to see if consumers will be willing to pay just as much for wireless connectivity.

The device itself will cost $299.

10:34 am: OK, back to de la Vega for more devices. But first, the results of that developer live pitch. And the winner is…

Action X-Ray, the one that lets you share your injuries with friends.

10:40 am: Device time, starting with six new Android devices, all with LTE.

Sony Xperia Ion, an exclusive to AT&T, will pack a 12 megapixel camera and a 4.6-inch screen. Planned for second quarter (with Sony branding now that it has bought out Ericsson).

Samsung Galaxy S II Skyrocket HD adds a bigger 4.6-inch Super AMOLED screen to the current Skyrocket model as well as a removable battery. Also, as widely leaked, AT&T is getting the Galaxy Note, a 5-inch cross between phone and tablet.

W.P. Hong, Samsung’s head of global product strategy, comes out to explain why we actually need such a thing.

It’s coming to the U.S. exclusively with AT&T and comes in blue and white. U.S. head Kevin Packingham is brought out to add to the Galaxy Note pitch.

He touts the pressure-sensitive pen capability, 5.3-inch screen and other features.

“And yes, it does make phone calls,” Packingham said.

De la Vega says AT&T also wants to bring LTE to the masses and is doing so with a lower-end LTE phone and tablet from Pantech as well as entry-level phone from Samsung.

10:50 am: De la Vega said the Pantech phone will be available for under $50, with a bundle coming that offers the tablet and phone for $249 (as long as you sign up for contracts for both, of course.)

The tablet, the Element, is also waterproof, notes Pantech marketing chief S. Jay Yim, who is now on stage.

Yim ends his talk by dipping the tablet in water, with de la Vega handing him a towel to dry off himself — and the tablet.

The Samsung Exhilarate, an eco-friendly budget LTE phone, will also be priced at less than $50, AT&T said.

10:57 am: OK, Windows Phone time, with de la Vega saying it sees a lot of promise in the platform. AT&T has been the biggest backer of the technology.

AT&T will be first with LTE Windows Phones. And, out comes CEO Steve Ballmer.

“The devices are blindingly fast,” Ballmer said, promising more details will come throughout the day. (Think Nokia event at 3 pm.)

Ballmer draws a contrast between Windows Phone and its app-centric rivals and says that others’ approach puts distance between a user and what they want to do.

“That doesn’t mean we don’t love apps,” Ballmer insists. Microsoft’s approach lets apps work together more easily, he said.

Ballmer notes that the company now has 50,000 apps in its marketplace, with 300 more coming each day.

As for Windows and Windows Phone getting more similar, Ballmer said, “We’ll continue to move in the direction of sharing more technology.”

Ballmer’s also sneaking in a quick pitch for Windows 8.

There have been 3 million downloads of the developer preview version of Windows 8, released at the Build conference last fall, Ballmer said.

Beta coming in February, Ballmer reminds developers.

And, he wraps up with his now-familiar chant of “developers, developers, developers.”

11:08 am: On to Windows Phone devices. Nokia is coming, but first up is HTC.

HTC CEO Peter Chou comes on stage to show that company’s first LTE-capable Windows Phone.

He shows off HTC Titan II, with its whopping 16 megapixel camera.

“I’ve tested it,” Chou said. “It’s blazing fast on the AT&T network.”

The press conference is running over and it’s fingernail biting time in the press row as our laptop batteries all dip into the red.

11:15 am: Chou is cracking up Ballmer and de la Vega. Maybe if he keeps it up there won’t be any time for Nokia.

11:16 am: Nope, here’s Nokia CEO Stephen Elop.

De la Vega said AT&T is betting on Nokia and on Elop. “We have bet on this person because I think he is the right person for this job.”

Elop starts out with his now-familiar line about the battle of devices turning into a war of ecosystems.

He also repeats his assertion that Lumia 710 and Lumia 800 were “the first real Windows Phones,” a phrase that is now doubt giving Chou fits backstage.

Elop promises first 4G LTE phone will be with AT&T.

But he also says that Nokia will share “more details” later this afternoon at its press conference.

And with that, the presentation is over.

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The drop-off in players affected almost all developers, but did not hit all titles equally.

For example, Electronic Arts saw 1.2 million fewer monthly users over the past week for its top title The Sims Social; Zynga’s Empire & Allies game lost one million monthly users, and its newest game, CastleVille, lost 900,000, according to AppData, which publishes such information.

On the flip side, many of the games that performed well were old favorites; these logically would have longer-term, more-committed players, who would make a point of returning during the holidays to take advantage of seasonal promotions.

The games that benefited from the holidays include Zynga’s Words With Friends and FarmVille, which gained 1.3 million and 800,000 monthly active users, respectively, according to Inside Social Games. Other gainers rounding out the Top 5 were Tetris Online’s Tetris Battle; Wooga’s kingdom-building game, Magic Land; and Men vs. Women, a role-playing game by Social Point.

Still, the general direction for the week was heading down.

That contrasts with other game platforms, such as consoles, PCs and mobile, which largely benefit from the holidays and from more free time in general.

Console games often skyrocket in popularity as kids and adults unwrap new titles for Nintendo, Xbox or PlayStation on Christmas morning.

PC gaming also typically surges during the season. EA timed the launch of Star Wars: The Old Republic ahead of the holidays, in hopes of drawing new players who would be sold on sticking around for months, after spending time on the game during their time off.

But perhaps the biggest competitor came from mobile, which benefited from breaking records for the number of new Android and iOS devices that were gifted during the holidays. Flurry reported that more than one billion apps were downloaded worldwide during the last seven days of 2011, breaking the all-time weekly record. Games are often one of the most-downloaded categories of apps.

So the more important question to ask is, why would Facebook be an exception, if other platforms performed well?

Clearly, all of the platforms are competing for a limited number of minutes in the day, and so are other forms of media, like the Internet, TV and the movies. But when it comes to Facebook, a larger driver may be the environment — after all, it’s no big secret that a lot of social networking and social gaming is done in the workplace.

In a study conducted last summer, advertising agency Saatchi & Saatchi found that 47 percent of respondents said they play social games at work during a typical day, and that 28 percent play for at least 30 minutes. Without that dedicated time in front of the computer every day, people may have had the opportunity to be more obsessed with other screens, such as phones or TVs.

Another potential reason that Facebook and social games did not see a lift from the holidays is because they have not yet figured out how to capitalize on the Christmas economy.

For years, console games have been timed with the end of the year, so they could be wrapped up and placed under the tree. More recently, smartphones and gift cards for music and apps have helped mobile prosper. Perhaps there wasn’t enough hype and promotion for social games to compete for people’s dollars.

Regardless of the reasons, the drop may ultimately be a small a blip on the radar screen for most game developers, who also see several spikes in activity during the year.

The bigger impact may be felt at Facebook, which takes a 30 percent cut of all virtual goods sold inside social games, and would feel the cumulative impact across all of the games.

According to research outfit Media Create, which closely tracks the Japanese console gaming industry, Sony sold just 72,479 Vitas during the crucial shopping week before Christmas. That’s a massive decline in sales following the device’s debut — well over 75 percent.

In fact, at 72,479, the Vita actually sold fewer units that its predecessor, the PS3.

So what happened?

That’s not at all clear. Certainly, inventory issues could be to blame. The decline could also have something to do with early reports of problems with the device. While Sony was quick to refute such allegations — which ranged from laggy gameplay to freezes and crashes, it wasn’t able to stamp them out before reports echoing them appeared in the broader tech media.

Could such negative chatter have put this big a damper on holiday sales? Maybe. A more likely explanation, though, is the Vita’s high price, its underwhelming lineup of games at launch, and Nintendo’s decision to debut its wildly popular Monster Hunter game at the same time. Knit those three things together with reports of software glitches and you’ve got a pretty big wet blanket.

Either way, those hiccups will be well behind Sony when the PS Vita hits the U.S. and Canada on Feb. 22, with a pretty impressive lineup of launch titles.

(Media Create chart courtesy of Neograf)

That’s in spite of Zynga, the rising star of social gaming, garnering much of the media’s attention last week, when it raised $1 billion in its initial public offering.

In November, Nintendo’s portable handheld, the 3DS, had its biggest single month of sales, representing an increase of more than 215 percent over the previous month; it has now sold nearly 2.5 million units since launch.

The Wii had its biggest Black Friday ever, with more than 520,000 units sold — six years into the console’s life.

The Japanese company also set a software record. Super Mario 3D Land, which was released Nov. 11, is now the fastest-selling portable Super Mario title in U.S. history, and Mario Kart 7 was the fastest-selling Mario Kart game.

In an interview with AllThingsD at the company’s U.S. headquarters in Redmond, Wash., Nintendo’s North America President Reggie Fils-Aime explained what’s driving strong holiday U.S. sales this year, and what’s on the horizon for the maker of games and hardware.

He also left the door wide open for Nintendo to experiment with new business models, including free-to-play or subscription, although he questioned the long-term prospects of social gaming companies, like Zynga.

Here’s an abbreviated version of our chat:

AllThingsD: It seems videogame sales this holiday kicked off with a bang.

Reggie Fils-Aime: We had a strong Black Friday for both our Wii and 3DS business.

The time frame from mid-November until the end of the year is critically important to us, and is driven by a number of software and hardware initiatives.

For the 3DS, we launched Super Mario 3D Land in November. It had the fastest sell-through for a handheld Super Mario game. That gave us a lot of momentum going into Black Friday, and right after Black Friday, we launched Mario Kart 7, which ended up being the fastest-selling Mario Kart, as well.

Together, that propelled our 3DS business. We’ve sold through more 3DS’s in eight months time than the original DS sold in the first 12 months. Our handheld business has a lot of momentum right now.

But it took awhile to get there?

What’s interesting is that we had a very good launch. The first week sales [of the 3DS] were fantastic. The initial rush of sales was really strong. But what happened after that in the spring and early summer time frame is — that’s when sales slowed down a little bit.

It was driven by not having great first-party software, and we were late in bringing some of the online functionality to the 3DS, and that’s when sales began to fall.

That’s when we took drastic action to reduce the price, right after the launch of The Legend of Zelda: Ocarina of Time 3D. Our bet was to regain momentum and make the holidays strong. We are having a strong holiday.

A lot of retailers were concerned that we would see a Black Friday rush and then things would trail off after that. Is that what you are seeing?

We haven’t seen that. We have seen things accelerate as we’ve gotten closer to Christmas Day itself. We are anticipating this week, across all of our businesses, will be the strongest sell-through week of the year.

What about the Wii?

The Wii had a strong Black Friday, too, driven by strong retailer promotions. This was our sixth Black Friday, and it was the best Black Friday week we’ve seen to date, so we’ve had very positive results.

It’s driven by software, and in this case, a new Legend of Zelda: Skyward Sword. It’s a game that’s been recognized by the gaming press to be one of the best games of the year.

The momentum continues for our Wii business, and sales are right on objective.

How does it continue to break records six years in? That’s baffling.

It’s because, even today, the Wii provides a family experience that you can’t get anywhere else. I love the stories I hear of grandparents playing with parents and with the grandkids.

Those are experiences that you can’t get elsewhere. That’s why we continue to break records. Plus, this holiday is the first holiday that it’s available for $149 or below. It’s reaching a whole new demographic that’s wanted to buy in, but couldn’t do it before.

And for consumers, there’s over 1,000 games that have been published, so the breadth of the gaming experience is extremely wide. The Wii continues to be the fastest-selling home console ever in the history of the gaming industry in the U.S.

Does that change as we get closer to the next-generation console, the Wii U?

The market is going to continue to differentiate based on the types of experiences that consumers want. As an example, if I’m the head of a household of a family of four, and my disposable income is $50,000 to $60,000, I’m going to continue to look at the Wii because of the software, and it’s a great entertainment device. For consumers who want to have the latest gadgets and have a higher disposable income, that’s for the Wii U.

We haven’t announced pricing or availability or any other details, but given the current pricing of the Wii, it’s not going to be there.

We’ve been very clear, the market is going to decide how long these products will coexist side by side. Our goal is to launch the Wii U and drive it into the marketplace, but it will speak to a different consumer than the one that is buying the Wii today during the holidays.

What about the other consoles? Both Sony’s PlayStation and Microsoft’s Xbox are about the same age.

All of the competitors haven’t talked about what’s next for them, and given the investments they’ve made in their technologies, for them to move to new systems — at least on the same timing we want to move at — would probably be pretty challenging. But in terms of what they are going to do, when they are going to do it, you’ll have to talk to them.

What do you think of Microsoft’s move to make the Xbox the entertainment hub of the living room?

In the end, the consumer decides what equipment to have in the living room. The interesting thing we’ve found — because of the family entertainment we provide, and the inclusion of Netflix — the vast majority of Wiis are set up on the main TV in the living room.

Are you considering adding more content like live TV or movies?

If the consumer wants live TV, they can get it through the options they have today. We always ask the question, ‘What can we do that’s new and provocative?’ And we will continue to think of new and provocative experiences for the user.

I’ve spent the past week covering Zynga’s IPO. What’s your perspective on social gaming?

What’s the share price? It will be interesting when it breaks below $9 … I have a couple of thoughts on social gaming.

Consumers want to be entertained in a variety of ways, like watching TV or reading a book. The thing about entertainment — as consumers have a range of experiences — their desires for what’s new continues to be pushed out. So delivering the same experience all the time … consumers will move on.

So when I look at gaming experiences on social networks, there’s a variety of entertainment value. Some are strong, some are not. But in the end, how will they evolve? Doing the same thing over and over again is no longer fine.

Is that really fair when you have Mario Kart 7 coming out?

We continue to evolve the experience by providing a level of customization that’s new, or different ways to race with a sail and a propeller that allows you to drift under water. What we’ve done with Mario Kart 7, for some of the tracks, you can actually win when you go off the track, which never existed before. We’ve continued to make it more fun and add more enjoyment for the consumer.

You don’t see that innovation happening in social gaming?

The companies that will win in the social gaming space need to show an ability to provide the new and different experiences, and a way to monetize it. In the end, these are businesses that need to make money.

Is that your comment on the free-to-play model? Will you experiment with free-to-play?

I have two comments on that.

First, we make games for Nintendo devices, and that is a competitive advantage for us. You can only play Mario on a Nintendo device, so from that standpoint, I wouldn’t expect to see our franchises on other platforms, and I would argue Facebook is a platform.

My second point, on whether we will experiment with other forms of monetization?

Certainly.

How that comes about, or which ones we do first, that’s all experimentation that’s going on right now in our various studios.

“This November marks the best November on record for sales of new physical content,” said NPD Group’s Anita Frazier.

Activision said within the first five days of sales, Call of Duty shattered all previous entertainment records, grossing more than $775 million. In fact, its first month of sales beat the game’s predecessor by about 7 percent, NPD added.

In NPD’s report released today, it analyzed videogame sales for November, taking into account sales made at retail across both hardware and software. It excludes the sale of digital content, like mobile games and downloadable content.

In November, NPD said software sales totaled $1.7 billion, jumping 15 percent from $1.45 billion in the same month last year. Hardware sales weren’t so lucky, falling 9 percent to $982 million from $1.1 billion in November 2010.

The second-most popular title during the month was Bethesda’s Elder Scrolls V: Skyrim for Xbox, PlayStation and the PC. “In one month, Elder Scrolls V: Skyrim is just about half a million units shy of matching Elder Scrolls IV: Oblivion in lifetime sales. Its first month performance was a five-fold increase over Oblivion’s first month sales,” Frazier said.

The rest of the titles in the top 10 are:

• Battlefield 3, Electronic Arts
• Assassin’s Creed: Revelations, Ubisoft
• Just Dance, Ubisoft
• Madden NFL 12, Electronic Arts
• Uncharted 3: Drake’s Deception, Sony
• Saints Row: The Third, THQ
• The Legend of Zelda: SkywardSword, Nintendo
• Batman: Arkham City, Warner Bros. Interactive

A year later, Microsoft is hoping a large lineup of games — 75 in all – will fuel a repeat performance.

And, if more sports and dance games won’t work, then it’s also integrating the speech- and motion-controlled Kinect capabilities into all aspects of the Xbox to seal the deal.

“It’s not just something for videogames. It’s something that will have a fundamental change in how people interact with technology,” said David Dennis, group product manager of Microsoft’s Interactive Entertainment Business.

Dennis declined to provide an update on how many Kinect sensors the company has sold since last season. To be sure, it has a long way to go to a majority of owners having it.

More than 55 million of the latest Xboxes have been sold to date, compared to the 10 million sensors sold, based on last year’s sales figures.

But he said the 75 new Kinect games available for the Xbox coming out this holiday are four times the number of games that came out for the launch last year.

Sony’s PlayStation Move, which it says has sold eight million devices, expects to launch a third of the titles, or 26, between September and December this year.

Tony Key, SVP of Sales & Marketing at Ubisoft, says its company has a dozen games, especially made for the Kinect, coming out this holiday.

“We are big believers and we’ve had a lot of success on it. We are going to continue to invest in the space, and it’s a great way to broaden the market,” he said. “Motion-controlled this year will sell more than last year. Kinect has a bright future. We have more Kinect games and a higher forecast on Kinect games.”

The range of games has expanded vastly beyond the dance, fitness and sports genres that launched last year. However, in general, the games still tend to still be more family-friendly and casual and aren’t meant for the hardcore demographic.

“It was about breaking down the barriers and making it easier to play. The games we launched with fundamentally and absolutely exploited the magic of Kinect,” Dennis said.

But that’s slowly changing. For example, some of Ubisoft’s titles — such as Just Dance 3, Just Dance Kids 2 and Your Shape Fitness Evolved — follow the status quo, but the publisher is bringing Kinect aspects to all future Tom Clancy games, including Ghost Recon Future Soldier, which comes out early next year.

In the game, players use hand gestures to customize weapons and voice controls to choose different attachments.

Dennis said there are many more examples of games that have Kinect features that aren’t necessarily Kinect-only games.

For instance, in Forza Motorsport 4, a racing game, players can look to their left to see a competitor’s car out the driver’s side window. Electronic Art’s Mass Effect 3, coming out next year, will allow players during battle to use voice controls to talk to their squad mates, including something like, “take cover on the left!”

More broadly, Kinect is also being integrated into all aspects of entertainment on the Xbox, including the ability to use Bing to search the music, games and video catalog on Xbox Live, or control Netflix.

In Xbox’s latest Kinect commercial it illustrates how Kinect has everything to do with it being a replacement for a remote control, and never even shows anyone playing a game.

Here’s a video showing off Ubisoft’s Tom Clancy’s Ghost Recon’s GunSmith feature:

Electronic Arts is taking its Battlefield 3 franchise head to head against Activision’s Call of Duty: Modern Warfare 3, which can only be called a match-up between two giants.

Millions in marketing dollars will be spilled and billions will be mined from consumers seeking to play realistic role-playing war games.

However, the first round has been won by Activision, which clearly had the upper hand going into it based on last year’s success of Call of Duty: Black Ops.

Today, the company announced that the release on Tuesday shattered its own first-day sales records, leading them to declare that the game has become “the biggest entertainment launch ever.”

In all, Activision sold more than 6.5 million units in North America and the United Kingdom in the first 24 hours at an estimated sell-through rate of more than $400 million. Last year, the company’s first-day revenues totaled $360 million, or roughly 5.6 million copies, on day one sales of the game’s predecessor Call of Duty: Black Ops.

Comparatively, Electronic Arts’ Battlefield 3, which came out late last month, sold five million units during its first week of sales.

Analysts were bullish on Activision’s early results.

“We believe the MW3 Day 1 sell-thru is a positive datapoint, and the stock should react positively on the news,” said Citi’s Neil Doshi, who added that if Activision can hit sales of $1 billion in five weeks or less, the stock should jump once again.

Analyst Arvind Bhatia of Sterne Agee wrote in an note to investors that Activision’s runaway success could result in revenues of $700 million to $750 million in the first week alone.

While both games are heavy on the hardcore action and realistic shooting, the battle between EA and Activision is as real as it can get.

Electronic Arts is calling Battlefield 3 the largest and fastest-selling first-person shooter title in the company’s 25-year history.

Both companies will also be banking on making additional income from digital components. Activision has developed a standalone social network, called Call of Duty Elite, where players share video and create profiles for free. But the premium version, which includes competition for prizes, costs an additional $50.

Making the competition even more intense is that Activision and EA aren’t the only two battling for the hardcore players this holiday season.

Ubisoft’s Assassin’s Creed: Revelations is now available for preorder ahead of its release next week. PlayStation’s Uncharted 3 went on sale Nov. 1 and Rocksteady’s Batman: Arkham City was released on Oct. 18. Microsoft also published its own first-person shooter, Gears of War 3, back in September.

Activision’s shares fell 17 cents, or 1.3 percent, today to trade at $12.81 a share. Electronic Arts’ shares jumped 30 cents, or 1.3 percent to $23.87 a share.

Vita, the upcoming handheld device, is hoping it’s in a class of its own, says John Koller, Sony’s PlayStation director of hardware marketing.

It better be.

In the three years the device has been under development, smartphones and tablets have become mainstream and the need for dedicated portable gaming devices has been weakened.

And if Nintendo’s 3DS is any indication, Vita’s prospects aren’t good. The 3DS struggled after missing the holidays last season, and Nintendo was forced to cut the price drastically almost immediately.

“This is a larger game experience. We think we are insulated from the competition,” Koller said. “We love mobile games. Mobile and tablets games are additive.”

As an example, while an HD game on the iPad is large, a game on the Vita could range from 2GB to 4GB. That would take up a substantial amount of the iPad’s memory, and take an awful long time to download.

The horizontal device is large and fits in your hands comfortably.

There’s a touchscreen on the front and a touchpad on the back, there are both forward-facing and rear-facing cameras, there are dual analog sticks to support first-person shooters, and there’s integration with the PS3, which will allow game makers to provide the ability to start playing the game on the console, leave the house and pick up where you left playing on the Vita. If developers allow it, users will also be able to stream games that they bought for the console to their handheld using Wi-Fi.

The Wi-Fi version starts at $249 and the 3G version costs $299, not including a data plan with AT&T.

As with any new connected gaming device, it will also experiment with things such as augmented reality, social features — such as Twitter and Facebook integration — and location-based services.

Koller described the demand as robust. Of the current PlayStation Portable owners, 60 percent have said they will upgrade in the next 18 months, and of the console owners, 63 percent said they would buy one. Of course, those two markets have a lot of overlap.

Initially, the device was expected to come out before Christmas, but after it was announced at E3 in June it faced delays. Recently, Sony announced it would come out in Japan first, and then hit the U.S. and other areas on Feb. 22.

Koller said the delay was due to meeting demand and that pre-orders are “substantial.”

He added, “We’ve increased production materially since E3. We learned our lesson to make sure you have enough product.”

Koller argues that the PSP launched in March 2005 and it still sold one million units in the first week, so missing the holidays is not detrimental.

He believes with more than 100 substantial games in development worldwide, there will be plenty of reasons for people to buy it right away. That’s where the Nintendo 3DS faltered: Not enough 3-D games at launch to justify buying it.

Today, Sony is announcing a special bundle that will launch a week early for those who are particularly anxious to get their hands on the device.

The PS Vita First Edition Bundle will be available for pre-order starting today. For $350, consumers will get the 3G version of the device, a 4GB memory card, a travel case, and the game, Little Deviants. The devices will be available for pick-up on Feb. 15.

As the guy who’s responsible for every single Sony product a consumer can pick up, Kazuo Hirai, the company’s executive deputy president, talked during a wide-ranging interview at AsiaD today about the company’s new tablets, game players and efforts to regain market share. He would not, however, talk about whether Sony is interested in buying out Ericsson in its Sony Ericsson joint venture. Below, video highlights of the session: