Wii sales are sliding and Xbox 360 is showing a year-on-year dip. How has PS3 managed to buck the trend?
We are still benefiting from the launch of the PS3 Slim at a different price point. This is related to the fact that we are getting more consumer recognition over the value of the experience on PS3. We are now adding to that sense of value with more and different services. So it’s a combination of the 299 price point, video downloads, catch-up TV, the growth in Blu-ray and our newly-announced art house film service – Mubi. People are starting to see the full picture of what this very powerful device can offer them.
Blu-ray functionality appears to have been pushed aside in favour of your other services. Is Blu-ray still a big USP for PS3?
I think it is one of many USPs. What we have done over the last year is shift our marketing strategy to talk about a portfolio of entertainment experiences – with gaming at the heart.
I actually take issue with the term ‘pushed aside’. I think a better way to put it is that we aren’t having to place as much emphasis on communicating Blu-ray because there is a general rise in awareness for it. We are still benefiting from it without having to make it front and centre of the communication.
How does Sony view Move? Is it this major competitor to Wii and Natal or is it more an additional add-on such as what the EyeToy was?
I think it is somewhere in between. It would be wrong to deny its EyeToy heritage and we learnt a lot from the EyeToy experience. But Move really is so much more.
There were two things that drove the thinking behind Move, one was that a different control interface doesn’t have to be about party games. If developed in the right way it can enhance the experience for conventional games across all genres. The second thing is how the amazing degree of accuracy in a 3D space can change and improve the immersion of the experience as much as it can broaden out to a new category of people.
Launching Move at a point when PS3 is seeing such year-on-year growth can be a great springboard for us. We are going to see some great growth I think.
So you don’t feel you’ve come too late to the motion-sensing party?
Absolutely not. The ability to reach out to an audience that has already been introduced to that form of gaming through Wii, and use Move to usher them into a deeper, more immersive and more powerful gaming experience, is a great opportunity for us.
Is Sony worried about the PS3 being inundated with shovelware because of Move?
The strength of our first party studios ensures that there will be a quality set of games. And what we are hearing from developers is the surprising ease with which they can adapt existing franchises to Move. The way Move becomes an enhancement to an already strong franchise with a proven track record should guard against shovelware.
Move is just one of your new innovations, 3D is the other. What are Sony’s expectations for 3D?
What we are trying to do in 3D is part of a broader cross-Sony initiative. Our chairman [Howard Stringer] has made it very clear, very early on that 3D is the next big thing where consumers will trend. What we have realised, particularly for a younger audience, is that games can be an easier way for people to engage with 3D than movies. It is an opportunity that’s too big to miss.
So you don’t agree with those that say it is just a fad?
Absolutely not. This is something that will be on the cutting edge of gaming for the next year or two. If Avatar taught us one thing in an age of global communication, when consumers embrace something it moves very quickly. I think it is a long-term trend and the numbers I have been seeing on 3D TVs are very positive. This is definitely a wave of the future that we intend to ride.
People have only just upgraded to HD TVs. Do you really expect them to jump on 3D so soon?
We are still in tough economic times and people are still being judicious with what they spend on entertainment. Having said that, the fact that there was a massive 3D success with the biggest movie release of all-time and the fact that people will consistently spend more at theatres for a 3D experience, argues that people are willing to invest in 3D.
Everyone appears to be rushing towards the digital sector. As a digital platform holder, is there room for all these major players?
What is necessary for us is to make sure that there is this big leap in install-base numbers that third parties can sell to.
There’s a couple ways to look at digital delivery. One stand is the Hollywood model whereby digital is just viewed as a different parallel distribution system for the same content. If companies are letting consumers get their content how they want it and where they want it, that is a strong ingredient for success.
The other strand of digital for me is the revolution that is taking place around social networks and how the younger consumers are growing up with social networks as part of their every day life. That is a set of expertise that we as an industry is still learning and probably the next generation of devices will be heavily informed by social networks. I think there is room for tremendous success for many companies in this area but the critical thing is understanding the new consumer behaviour.
You made a brave move in launching the digital-only PSPgo, and sales have been low. Do you feel consumers perhaps weren’t ready for a digital-only console?
One of the reasons we launched PSPgo was to understand where that consumer behaviour was going. We were getting signals from consumers that this was the kind of device that they wanted. But we need to recognise that consumers like their packaged media library. It was introduced in a mature lifecycle to learn more about what the consumer wanted and we’ve definitely learnt a lot. Is that measured by success in sales? I don’t think it is.
Why has PSP been such a phenomenal success in Japan when it hasn’t been across Europe?
Handheld gaming as an activity for an older audience, who by and large live in dense urban environments where almost all commuting is done via public transport, means inherently there is a bigger potential market. I think the time to play on handheld devices is probably greater in Japan.
That, coupled with the fact key publishers supported the platform really early on – such as Capcom – who built entire franchises around just for the PSP, fed further into that success and created a phenomenon around those games. Also, there is inherent brand loyalty for Sony from Japanese consumers. But I’m just speculating.
How can you turn things around for PSP in Europe?
We need to offer consumers a different range of gaming experiences and I think minis is important to that. At the same time, if people are going to invest in a dedicated handheld then there has to be value-for-money. Essentials is a great play for us there. We think there is an enormous appetite for value PSP games.
Have you taken any learnings from Apple and their success in gaming?
We have certainly looked at the gaming behaviour on iPhone. In some sense it confuses the content provider market. You have such a preponderance of free content out there, which is perhaps downloaded once, played once and forgotten. It is an incredibly crowded market and difficult for the average consumer to navigate all of the games on there. What we’re learning is yes, consumers want instant access but they want an assurance on quality and value-for-money. I still think there is a strong group of consumers that want a more immersive experience than something that is pick up, play and forget.
What are you doing to tackle the piracy issue on PSP?
Piracy is a huge threat to the platform holder and publishers. What we are looking at, and you’ll hear more about this to, is ways that we can strengthen the security system. Another way is making the price of entry much more accessible with our Essentials range. One hopes this will lessen the attractiveness of going through hoops to get content for free.
You made huge announcements at E3 and Gamescom last year. Will you be doing that again? Or focusing more on E3 this year?
I was proud at my first GamesCom to share the stage with Kaz Hirai [SCE CEO] for a major global announcement. It made a very strong statement that Sony takes a global approach to its games business. It’s not the case anymore that big announcements only happen in the States or in Japan, they happen when the time is right and regardless of where the audience is.