Games based on Bollywood movies? One company is doing so, but will be following a very different model than that of traditional computer games. Check out this CNet News report for more details.

Sony has switched to plan B for movies on the PSP: bundle movies with Memory Sticks! In a somewhat smart move, the company plans on launching two Memory Stick Entertainment Packs that will allow users to transfer specially optimized movies to the memory stick to be viewed on the PSP.

They will be available in 1 and 2 GB packs, with an installer DVD. Using the DVD, users will have to use the given unlock code to transfer one of four Sony movies to the Memory Stick. The lineup of movies includes Hitch, SWAT, The Grudge and XXX: State of the Union.

The 1 GB and 2 GB entertainment packs will be available starting next month for about $60 and $100, respectively. There is no word whether this will be launched outside of North America.

The PSP, Sony’s media juggernaut, was highly praised at first for its movie playback capabilities, but now it seems the novelty has worn off. Word comes from Hollywood Reporter that many major studios have heavily slashed the release of UMD movies, while some have discarded it completely; there are also rumors that Walmart may even drop the category from their stores.

Inadequate sales have been blamed for such decisions, with one executive from Universal Studios going on record to say, “It’s awful. Sales are near zilch. It’s another Sony bomb — like Blu-ray.”

“No one’s even breaking even on them,” says another “high-ranking” executive, which is echoed by the president of another studio “No one’s watching movies on PSP.”

So, does Sony have any plans for rejuvenating the trend of watching movies on a small screen? According to the article, SCE executives will be making the rounds to several studios to discuss plans for making the PSP be able to connect to television sets. However, this doesn’t necessarily mean that there will eventually be a PSP-TV adapter, but one can hope so… for the games, anyway!