SCEE: Consumers will "upgrade" to PS3

SCEE president Andrew House told OPM's Tim Clark at E3 that we're going to see people buying PS3s as an "upgrade" from less powerful consoles later this cycle

“If you look back at previous lifecycles, like PS2 versus N64, we have lots of data that suggests that lots of people bought into N64 as their entry level gaming device, and were happy to upgrade to a more powerful machine later in the lifecycle when the price point was right for them,” he said.

“I think we’re going to see this later on PS3, and the fact that it’s a Blu-ray player as well and that there’s a [greater] wealth of network based experiences than are perhaps available on the device they already have will add to the proposition. I think that will definitely be a factor in the marketplace.”

There's a full interview here.