• by Laurie Sullivan  @lauriesullivan, January 10, 2008

Tom "T-squared" Taylor from Syracuse, N.Y. sits in a makeshift living room in the Panasonic booth at this year's Consumer Electronics Show (CES) with eyes glued to an eight-foot screen. A wireless video game controller in his hand operates the Sony PlayStation 3 (PS3) hidden in the corner. It's connected to the Panasonic PT-AX200U projector mounted in the back of the room.

Taylor competes in the major league video gaming circuit. His team, Str8 Rippin, finished third place last year in the United States. In the last tournament, he split the $30,000 purse with his other three teammates. Now the 20-year-old has signed a major endorsement deal to help Panasonic go after the gaming market.

What's behind the endorsement deal? The Panasonic PT-AX200U, released in October, has a game mode that minimizes the delay in the response time between the player's move and the visuals on the screen, which has been a problem for gamers. The electronics manufacturer claims it's the first projector to offer this feature.

Taylor, who practices between 3 and 14 hours daily, never considered playing video games on a projector until now. "It feels like there's no lag time at all," he says. "I have a basic set-up at home to practice, eight tube TVs for four-on-four practice with teammates, but I plan to replace them with one of these projectors soon."

The projector offers a three-chip liquid crystal display (LCD), 2000 lumens, 720p high-definition video, dynamic iris setting and several high-definition multimedia interface (HDMI) inputs to connect a tuner or any of the game consoles such as Nintendo Wii, Microsoft Xbox 360, and Sony's PlayStation 3.

The projector provides general-purpose family entertainment, from watching movies to playing video games, but "targeting the gaming community is a new effort for us," says Dawn Thie, Panasonic marketing manager. "Previously, we were just going after the home theater buyer. Now we have a specific fit for gamers."

Today's impressionable video game enthusiasts typically follow recommendations from gaming professionals. Many buy top-of-the-line headphones and 42-inch plasma televisions to get the ultimate performance. The PT-AX200U retails for $2,000, but Thie says consumers can find the projector for much less.

Perhaps it's not that simple. Colin Sebastian, senior research analyst with Lazard Capital Markets, agrees that some hardcore gamers invest thousands of dollars in hardware and software to complete the experience, but it's not clear whether gaming has contributed to an increase in hardware sales, such as HD TVs.

"If the unit numbers and dollars are significant for that product, it may be worth the focus," he says. "When you have fast-growth business, it's a natural for the consumer electronics company to try and capitalize on the success."

Sebastian estimates 8,000 PS3 and 120 million PS2 owners worldwide. Microsoft claims about 17.7 million Xbox 360 consoles have been sold since the launch more than two years ago. Nintendo most recently projected the Wii would hit 17.5 million units by the end of its fiscal year in March.