It may seem strange to many, but there are several developing markets, where the PS2 is still the highest selling console. India is one of those markets, and Sony has relied primarily on the old warhorse to expand the PlayStation brand in India. It's now time, however, for its successor to start pulling its weight. Five years after its launch, the PS3 is set to become the flag-bearer for PlayStation in India, and Sony is taking several steps to make sure it plays its cards right.
Atindriya Bose, country manager at Sony Computer Entertainment India, talks to MCV India at length about this shift in the PlayStation business in India, touching upon various topics, including local replication of PS3 games, Vita sales, Bollywood tie-ins, price-drops, bundles, and lots more.
How close are you to starting replication of PS3 games in India?
Technically, it's been tested and the line is ready. What is pending is a full understanding of the tax implications, so that we're very clear on the costing models for both our products as well as those of third parties, as and when they come on board. So it's the cost and pricing side of it that's remaining; technically we're ready to go. We want to get this right, because this is a very important long term investment for us.
So by when can we expect to see PS3 games replicated in India on shelves?
We were initially planning to start with this fiscal, but these legal evaluations have taken longer than anticipated. Once that is done, we're ready to begin ASAP. We'll probably begin with a test run of one title, because we don't want to jeopardise the supply conditions around Diwali. So we will definitely begin this year.
Are you planning to localise these games in any way; if not in terms of in-game content, then by way of manuals or box art in Indian languages?
Well, the packaging will have minor additions, such as ‘Replicated in India' or ‘For sale in India only', but in terms of language localisation along the lines of what's being done internationally, we aren't planning that as of now.
Would localising the packaging with a different language deter people from exporting games manufactured here, and thereby allow you to price the games lower?
In the long run, those options will be considered for two reasons. One, as a marketing benefit to us, and the other is to deter people from illegally exporting. As far as illegal exports go, we really haven't seen that happening on the PS2, so it isn't much of an issue. So it's more a case of whether localisation will give us a marketing advantage.
Once local replication does get underway, what price are you targeting for a new AAA release, such as The Last of Us?
It's a bit too early to say, but we would definitely love to see the impact on game prices brought on by unfavourable currency exchange rates being negated. That will be our starting point. On the top-end (AAA) titles, I don't see a lot of price erosion, but at the catalogue levels, we'd definitely like to see a more India-oriented price.
So you're looking at Rs 2,499 for a new AAA releases?
As of now, yes, that would be a realistic target.
What sort of pricing can we expect for a back catalogue title? Uncharted 2, for instance.
Currently, the Platinum range is at Rs 1,499, so crossing the Rs 1,000 barrier would probably be our first target.
Have any third party publishers come on board as yet for local replication of PS3 games?
We're in talks with all third parties. Some discussions have advanced further than others, especially with the publishers who are already replicating their PS2 games in India. It will be easier for them to come in because they already know the processes. So we're in various stages of talks with many publishers, but since nothing is finalised yet, I wouldn't want to name any publishers.
Is the majority of your marketing focus in India still on the PS2?
In terms of numbers, the PS2 is still our biggest console. Interestingly though, growth in the mass category has actually been driven by the PSP of late. The PS2 has seen a slightly flatter growth as opposed to last year, but the PSP has seen a 30-35 per cent growth this year. That was mostly down to the E1000 SKU that we launched, which did very well in the distribution segment. We didn't expect that, so while the PS2 was flat this year, the entry level audience has continued to grow via the PSP.
Last we spoke, you said the PSN registrations from India were around 91,000. Where does that stand now?
Those figures were around the time of the PSN service outage. That has now almost doubled to around 170,000. However, the percentage of active users has remained the same – around 50-55 per cent of the install base. These are the users who regularly log in and download content, but we aren't seeing a big growth in online purchases. One thing that is encouraging is we're seeing a rise in PlayStation Plus subscriptions. The biggest challenge is the quality of broadband internet in India, so even though PlayStation Plus offers members great games for free via the Instant Game Collection, the fact that it will probably take all night to download a game makes it less attractive.
Is there a possibility of making prepaid PSN cards available in India?
To be honest, we haven't been able to estimate the demand for PSN cards, and again, the applicable taxation is very hazy – is it a product or a service? So we aren't looking to introduce PSN cards in the near future. What will change is that we will engage PSN users a lot more. Indian users haven't been receiving emails about product and service updates, but that will now begin on the lines of what's being done globally, with a degree of localisation.
How has the Vita been faring?
It's been tough because unlike the other markets, Indian consumers aren't very inclined towards multiple ownership. Those who are, picked up the Vita at launch. It has now settled down to around 700-800 units a month at organised retail during peak months, and around 500 per month otherwise. There is, however, an influx of import units. We also didn't bring in too many 3G units initially, so that probably worked against us. Overall, the Vita is performing as we expected, but that said, our expectations were very conservative to begin with, especially at this price point. There is a lot of interest in the Vita, but then the price comes into play and people start comparing it to the PS3, which is priced lower.
How many Vitas have been sold in India so far?
Not more than 4,000. We had brought in about 3,000 at launch, 60-70 per cent of which was sold. The 1,000 we got after that are still in the market.
Can you give us the current install base of the other PlayStation consoles?
The PS2 is currently at about 8,30,000, and it keeps growing. For instance, we sold about 57,000 PS2s this summer, which is good. The EyeToy [relaunch] helped at large format retail, Sony Center outlets or wherever it is demoed. In the distribution segment, a lot of people have also picked up the two-game console bundle. We'll keep both running for a while. The EyeToy software has also received a good push. What also helped the PS2 this summer is the release of some previously unavailable titles that are popular with the younger audience – Naruto, Ben 10, etc. What the PS2 requires now is new products at regular intervals, or at least something that is deemed new for this market. That creates a bit of excitement and it works wonders.
The PSP install base is currently 3,60,000 to 3,70,000. We're in line with what we were targeting for this year, which is around 1,30,000. The biggest constraint here has been the lack of new titles.
The PS3 is today at around 1,55,000, and this is the segment that has given us the biggest growth. What's encouraging is that for the mass segment, 30 per cent of sales happen in the first three months, while for the PS3, sales always tend to be higher in the second half of the year.
Are you planning any more games targeted at the Indian audience?
We will be rolling out Street Cricket 2 for PS2 and PSP around Diwali.
Is this also being developed by Trine Games?
Yes, it is an extension of the franchise they created. The game is looking good. We're hoping to get it out pre-Diwali.
There's been a lot of talk about a super slim PS3 4000 model.
I can't really comment on this. If there is something like a product change coming up, we will be exposed to that information at a much later stage. So I don't know if it's true or not, but at a local level, we can't comment.
Any chances of a PS3 price drop around the corner?
As of now, we have no such plans. In terms of the India market, this is a very tough environment to even be discussing a price drop. We're seeing a lot of uncertainty on the exchange rate. While we have done very well this summer, the overall consumer sentiment has not been what we had hoped it would be. It was dampened in May, and June did see a bit of a recovery, but consumers are still a bit wary of the environment, so it's also creating some uncertainty on how we plan things.
If there is to be a price drop at Gamescom, would that be reflected here?
If there is such a change internationally, we will not be isolated, and that I can guarantee. We will get those corresponding benefits. However, with any change in prices for any console, the reality of the exchange rate always will remain.
Are you planning any promotions or bundles around either console?
Initially, we focussed on the PlayStation Move bundles. Around 85 per cent of all PS3 console sales were Move bundles. In the process, we avoided some of the big game bundles. When we did game bundles in the past, a mistake we made was not offer an alternative, so stock would get stuck in the market. Now that the PS3 pie is big enough, we will start bringing in the gamer's bundles” once again. We are also looking to do that with the Vita.
Are there any particular game bundles that we can expect?
As of now, nothing is decided. In the past, we've generally avoided third party bundles, because with the Indian pricing, it's been a little difficult. But now, we will look to bundle third party games that will help the format. FIFA and Assassin's Creed are the most likely choices. I don't think we can think beyond that. Call of Duty, perhaps. The big first-party titles, of course, will get bundles.
Are you worried that unlike previous years, Sony doesn't have the one big first-party title this calendar year?
This may sound rote, but in India, the whole movement towards gaming is happening quite differently to how it's happening in the rest of the world. The back catalogue is what drives sales here. The Uncharted Trilogy, for example, is flying off the shelves. Move too has been a great entry point into PS3 gaming, and as I said, 85 per cent of all PS3 console sales in India are of the Move bundles.
We have Sports Champions 2 coming up, which will be big in India. PlayStation All Stars is an exciting title and it's a very big game from an Indian context. There's local multiplayer with lots of button-mashing fun. Even with the Vita, Reality Fighters did surprisingly well, especially in north India. Somewhere down the line, you will also see Move Street Cricket 2. That should arrive in this financial year. Cricket is big. The Street Cricket games so far have sold around 200,000 units. If we take away Cricket from the console bundle, the dealers come back to us and complain. The sales of Ra One were second only to Cricket.
So are Bollywood tie-ups the way forward?
To bring in the mass market, yes. Ra One was a success. It was also a very good seller for us. Indian consumers need names, faces and brands they can associate with. I'm waiting for another similar tie-up.
In the past, Sony has always chosen to advertise the entire PlayStation brand in India, rather than a particular console or game. Will that continue?
I think the market has matured enough now that you can focus on your star product. Up to a year ago, we had to focus our marketing on the entry level consoles (PS2, PSP). The star product now is the PS3, and I think it's important that the migration to the current generation console begins. So in terms of communication, the focus will now become the PS3. The games are exciting. There are wonderful opportunities coming up in the form of Wonderbook. Our overarching message will be that the PlayStation brand adds to the fun quotient of the family, but the tool we will use to get that message across will now mostly be the PS3.
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