Countdown to PS4 – PlayStation UK talks stock, the failure of PS3 and indie retailers

After a generation stuck in last place, PlayStation UK has never been in a better place to reclaim the No.1 spot from rival Xbox.

MCV speaks to sales director Alex Coultate, marketing boss Murray Pannell and managing director Fergal Gara on the launch of PlayStation 4

Eight years ago, PlayStation was the biggest brand in games thanks to PS2. Fast-forward eight years and it limped in last place. What went wrong? How are you fixing that with PS4?

Fergal Gara, UK MD: The two fundamental points that were against PS3 was price and coming out late. With PS4, addressing both of those points were of the highest priority and they have been successfully addressed. To come out 75 below the PS3 launch price several years later with inflation and everything is a hell of an achievement. To make it to market at the right time from a competitive point of view is a huge start. That puts us in a dramatically stronger competitive position.

But I think you’re probably touching on manner and style. Certainly as the UK team, the way we go to market, we’re definitely making a huge effort to be partners with those we work with, to listen and to respond. It’s not all ‘my way or the highway’ – but it’s ‘let’s collaborate, be partners, find a way, solve problems, find solutions and be on the front foot dragging the business forward together, that’s the kind of attitude we aim to have.

David Wilson, Head of PR: There’s been a few departures from the norm. Normally we announce in Japan so announcing the PS4 in New York was pretty radical. With the West and development leading it rather than engineering with our Japanese organisation, that has given PS4 quite a different impetus and flavour.

The other thing I should note from my perspective is the huge depth of warmth for the brand. The PlayStation memories thing was amazingly revolutionary. There’s such warmth for the heritage and that’s been almost like another side to the equation.

Gara: There’s a definite sense that gamers are welcoming us back. Whether you look at the views on the ‘Since ‘95′ YouTube video, the spontaneous PlayStation Memories reaction or our pre-order data, there’s a real sense that we have found our focus and people believe we’re walking the talk.

Can you take PlayStation back to market leadership in the UK. Is that the goal?

Gara: I think there are a number of goals. Clearly we want to deliver first and foremost for the gamer. And of course, we have a corporate obligation, so we need to deliver for our shareholders. And, as competitive guys, if doing that puts us back into a market leadership position we’ll be immensely proud and that will be a good ambition.

You’ve already told us that this is your biggest marketing spend ever. What does it involve?

Murray Pannell, Marketing Director: We started a long time ago with paid for media. The strategy started with the gamer, making sure they’re aware of the console, the functionality, the features and the games. That’s been running for months.

November 15th is when our main campaign kicked off and that’s when the high profile TV, outdoor, cinema advertising started. That’ll run for the rest of our financial year and it’s a massive investment for us – tens of millions.

Yes, we know that stock will be tight at launch. But we think we’re going to drive demand not just for people who want a console this Christmas but get them to want a console next year, trying to cement their loyalty to the PlayStation brand as early as possible.

Then relatively quickly and aggressively next year, we are going for the more casual gamer. I’d say half of our launch line-up is what I’d call casual games, three-plus games. Whether that’s Skylanders, Need for Speed or PlayRoom – a whole bunch of games that will appeal quite broadly.

Has your proximity with the Xbox One launch impacted what you are doing with your campaign? Have you had to ramp up what you are doing?

Pannell: You’re always thinking about your competitor but our campaign build up would have broadly taken a similar kind of approach. So we keep an eye on what might be happening out there but you stick to your plan.

Your line-up has been weakened slightly by delays. And Xbox has been actively discussing its strong release schedule. Do you need to ramp up your product pipeline for the next six months?

Gara: DriveClub and Infamous are both post-releases and already announced titles. So in terms of the content pipeline, even without new announcements we feel invery strong shape.

It’s true to say that we’d have loved to have Watch Dogs and DriveClub at launch. But the launch units are effectively sold, so it’s a nice second wind of the campaign as stock situations improve and more exclusive PS4 titles land. Some of the most anticipated titles like Destiny align with significant PlayStation points of difference. That gives us huge encouragement.

Sales of current-gen blockbusters have fallen. Is that due to people waiting for PS4 and Xbox One?

Gara: That seems to be a factor at play. If you look at the year to date, the software market is quite healthy. We all know that one phenomena – GTA V – has helped fill the void, but considering the stage of the life cycle, how consoles are tailing off and for the software market to be in growth is remarkable. That’s even after those games you are referring to with numbers weaker than people might have expected.

There’s definitely a transition dynamic in there. I certainly would not sit here and say that those franchises are in trouble by any means. It’s way to early to judge that. I think we can start to really form a view once the next-gen consoles have landed.

It’s logical to say the recent titles are rather gamer focused. These are the people we want and expect to come into PS4 very early. So it’s more interesting to wait until Christmas or early into the New Year and see how these games have performed across the generations.

We might be about to see a more aggressive switch and therefore different balance of sales for those franchises.

What are your plans for PS4 at retail?

Alex Coultate, sales director: We’re trying to work closer with our retail partners, so there’s definitely something with education and engagement. It’s making sure the buyers are close to the product. Showing and telling them how we think as a business. We’ve done more retail conferences this year than ever. More hands-on and more head office talks than we’ve ever done versus previous console launches. There’s definitely been a big engagement piece.

From an execution perspective, there’s two phases. There’s a launch plan, pre-awareness in-store now, and we go into rounding off our volume and maximising the opportunity to Christmas. The world doesn’t end on December 24th, so making sure we’re set up for 2014. There are more places to play PS4 in-store than we did with PS3.

When are all retailers going to start selling digital PSN cards?

Coultate: GAME has had what we called ESD for two and a half years. You’ve probably seen we launched with some independents. We’re working that through our partnership with CentreSoft. We’re working with third-party publishers and there’s a dedicated bay for ESD with selected indie retailers. You’ve got individual and chain independents signed up as well.

Gara: We’ve been saying all year that we want retail support for our digital business. We want them to play a part in it and take a slice of it.

We’ve got the independent move which takes us into the rest of the specialist sectors, which is nice, but our ambitions are broader. There are tools for every retailer to take part in that digital business. It’s a discussion we have regularly to bring more retailers with us. It’s a work in progress.

How active have you been with supporting the indies?

Coultate: They’re really important to us. As Fergal says, we view the specialist sector as GAME and the independents. There’s a huge amount of focus on them.

How is the PS4 stock situation?

Gara: We’ve got some. In keeping to delivering to the plan, the stock is arriving on time with no wobbles. I won’t give you a number, but versus the forecast we had earlier in the year, we’ve been raising those expectations and the business is helping us meet demand. Would we like more? Yes. But have we got a healthy volume for a big launch? Yes.

There’s been a lot of talk in the media about PS4 titles having an improved resolution over Xbox One games. Does it have an impact?

Gara: We said we want to be the best place to play, and to be very developer friendly. We hope that’s true. Some of that evidence suggests we are at delivering that.

Are we ahead of the competition? You’ve got to ask the publishers or independent reviewers for their views on that. One thing for sure is we are coming out well in the noise and that means we are delivering. Are you confident that PSN is robust enough? A lot of people were having issues with GTA V when that first came out.

Gara: I don’t know the specifics of that issue, but have we invested in and recognised the importance of PSN? Yes. Our network will be crucial in the future of what we do. That has been recognised and acted upon so we’re all just putting that in action.

The Vita Connection

Over the summer, Sony has proactively promoted PlayStation Vita as a great product for kids. But this Christmas the focus switches back to the core gamer as Sony sells it as the ultimate PS4 accessory.

We’ve had our opportunity to get people hands on with Remote Play recently and there’s been a lot of news breaking on Remote Play demos, says UK MD Fergal Gara.

It feels very compelling, very relevant to the core gamer. Vita’s role in a PS4 world is one of the things we’re very excited about.”

As a result, the team at PlayStation UK is advertising Vita connectivity, both in-store and with above-the-line TV Advertising. It is also putting together an ‘Ultimate’ console bundle, which includes the Vita and a PS4.

Sales director Alex Coultate adds: One of the things we get asked most is: ‘Are you going to do a PS4 and Vita bundle.’ We have been working on one and we’re now talking to retail about promotions pre-Christmas that includes PS4 and Vita.

We believe they work brilliantly together, so why not proactively put that together for the gamer?

Marketing boss Murray Pannel says: That is one of the questions that keeps coming up on the forums, so it’s another case of listening to our customers on what they want.”

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