On Tuesday, we published a report that PSP software support from third-parties has been on a steady decline since 2006, a trend that, if continued, would lead to the abandonment of the system entirely. To get Sony’s take on the data we spoke to SCEA director of hardware marketing John Koller, who explained what caused the decline and why it will reverse in 2009.

Koller acknowledged the reality of the situation. “On the software side we’ve been very open about the fact that there are fewer games this year,” he said, alluding to earlier comments made by Sony Worldwide Studios head Shuhei Yoshida. According to Koller, the major reason for 2008’s slow schedule comes down to the nature of the development cycle, relative to slower PSP hardware sales in 2006.

“Decisions made 20-22 months ago from a development cycle perspective are affecting the quantity of titles available today,” Koller explains. “20-22 months ago developers and publishers were looking at the PSP hardware and thinking ‘It’s not selling as well, maybe it’s time to move our resources elsewhere.’” Koller also mentions that publishers and developments were also measuring the viability of the then very new next generation consoles at the time.

Koller also stated that publishers were not familiar with how demographics were shifting on the PSP, leading to improperly targeted games that did not meet sales expectations. “When we launched the PSP it launched at a 28-year old, heavily male, New York subway [demographic], and that slowly trended down. Now we’re in the mid-teens with a lot of tracking even younger than that. Our research shows that in the next 12 months young moms actually are set to have the highest propensity to purchase the hardware and software for their young children.”

As a result, Koller says, “a lot of publishers that were making mature-rated games that were ports from console found they weren’t selling very well.” He calls the old PSP software release trend of ports a “failed strategy” in general.

In order to get third parties on the same page, Koller reveals that Sony has been on a six to nine month “road show.” Visiting all major publishers, this tour sought to “calibrate and educate” game makers on the PSP, where it’s headed, and Sony’s “recipe for success” for software on the system.

“The recipe for success on the PSP resides simply in providing franchise games that are strong brand names like on consoles, but have unique gameplay on the system,” Koller describes. “You cannot have ports. We used God of War: Chains of Olympus this year as an example of that, as well as Final Fantasy VII: Crisis Core, and Midnight Club, which is going to be launching in the next few weeks. Those three games are titles that have very strong brand names on console but are coming over with unique gameplay on the PSP.”

The other component is, of course, the PSP’s strong hardware sales. Koller points out that, “hardware sales were down in 2006, but they rebounded very strongly in the first half of 2007,” thanks in part to the price drop in April of that year. And sales have stayed strong as Sony has kept the hardware fresh with updates that helped to “excite the market.”

“We’ve gone to every publisher and they’ve been noticing the hardware is on fire,” he says.

So Sony has been working hard, and Koller things that the fruits of that labor will appear in 2009. “I think going into next year we’re going to see significant growth. We’re counseling retail to be ready for it. We have a number of very strong franchise games on the docket that will be launching next year. We haven’t gone public with those, and many third-parties have not yet either because they’re concentrating on holiday, but we have a number of very strong titles coming.”