"It's not good for us, but it's not good for the development community. We can look at data from BitTorrent sites from the day Resistance: Retribution goes on sale and see how many copies are being downloaded illegally, and it's frankly sickening. We are spending a lot of time talking about how we can deal with that problem."
Dille says that older hardware units are the most problematic but hopes that upcoming blockbuster titles such as Assassin's Creed and MotorStorm should help struggling software sales.
"Those numbers are correct," he added, speaking of the 50 million units figure. "There's a lot of hardware out there; toothpaste is out of the tube. We're not going to get that hardware back into the toothpaste container.
"I'm not naive, but I do think that most people are inherently honest. We learned a lot from the music business, and it became so easy and so common to download illegal music - everyone was doing it. It's almost like people lost sight with the fact that, well, 'If everyone's doing it, then it can't be that bad.'
"But, it actually is bad; it's bad for the platform. Again, I'm not saying that that's a magic wand; I think that we have to make sure from a technological perspective that it's not as easy as it is to do that."
Dille finally added that over the years the company faced a mass exodus of third party developer support for the handheld noting that many were "just about ready to jump off the cliff and pull support for the platform".