Sony is the company that perhaps popularized the post-cartridge console generation with the PlayStation and PlayStation 2, both astoundingly successful. And yet it's had somewhat of a hard time of it in this console cycle, trailing the runaway hit of the Wii and -- at least in the West -- running into competitive issues from the PlayStation 3's pricing versus the Xbox 360.
Yet the company is hardly down and out, with the PlayStation 3, PlayStation 2, and PSP -- which even Sony admits was teetering on the edge with regard to Western software support before a renewed push -- all on the market and selling hundreds of thousands of units monthly.
But how does the company itself view its progress? How does it see its business? To get those answers. Gamasutra spoke to Peter Dille, senior vice president of marketing at Sony Computer Entertainment America, with additional commentary from SCEA corporate communications manager Julie Han.
To start, I want to get sort of your perspective on how things are going right now with all the platforms, not just the PlayStation 3. You just had your price drop with the PS2 as well.
Peter Dille: This is our new fiscal year; we just finished our last one. We had record revenues last year. PS3 had a healthy increase in business. PS2 is chugging along obviously into its latter stages towards that 10-year lifecycle, and the PSP hardware platform continued to go to close to 50 million.
Yet despite all those good things going on, some of our competition had even better years, particularly Nintendo, and that tends to overshadow some of our success. The other thing that sort of colors our performance is, from a corporate perspective, we were marching to a different drum than it appears Microsoft at least -- Nintendo maybe didn't have to worry about it as much.
But at Sony Corp the message was "Let's try to eke out a profit," which took certain cards out of our deck. We're not going to make a price move for PS3; we're not going to be packing five free games into a promotional strategy.
Again, we grew the PS3 base 40 percent, in selling a premium-priced game console in a tough economic environment, all things that we're very proud of, and yet I think we've got better things in store for the next fiscal year.
We've got just a fantastic line-up on PS3; PlayStation Network is really coming into its own and is going to enter a new phase in its life and help us sell hardware in its own right. So we've got big things planned, and we've got a lot planned to make clear at E3.
One thing that I've been curious about in terms of the PlayStation Network: Sony has a fairly high emphasis on getting original games and fostering interesting game development with thatgamecompany and stuff. At present, I'm not sure those games drive a lot of revenue. But is it a halo effect in the sense that having those interesting games draws people into the platform, or is it a pure revenue driver?
PD: I think it's more the former. From a revenue perspective, maybe an important point to make is that a lot of those games are profitable for us and for the developers that are making them right out of the gate.
As people talk about the games business maturing and how tough it is to make money, I think they're talking about how do you recoup investments in games like Metal Gear Solid, and obviously that's well-documented.
People can talk about how they can crack that nut and the importance of game quality and just massive releases on the scale of Hollywood. But a game like Flower or PixelJunk [Eden] --- these games are profitable the day after we release them.
They're made by small, boutique teams that are very creative, which breathes new life into the development community and gives us a chance to get closer to those folks.
But to your question, we see it as an extension of the core strategy of this business, which is exclusive content is what helps make people's minds up to buy a platform. That's the Uncharteds or the [Gran Turismo]s; it's the God of Wars. But everything can contribute to that, so it's also the platform where you can get Flower and Pain and all sorts of wonderful titles on the PlayStation Network.
I think it's kind of an interesting point. Because of the scale of the business with hardware manufacturing and stuff, those costs are not going to be offset by selling a couple PSN games per hardware unit or something. But at the same time Flower created a great deal of buzz; that's kind of where I saw the strategy.
PD: Absolutely. And again, there's a lot of downloadable content on Live Arcade. A lot of it is older, kind of rehashed games that have been around on other platforms, and there's a role for those types of games.
But what our studio organization and what we're doing as a company -- back to Flower or flOw before that -- these were games that were made specifically for the PS3, so they're made to show off a high-definition gaming experience that only the PS3 can offer.
They're not retreads; they're not experiences I've had before that are nostalgic -- and again, there's a role for nostalgia in this category -- but they're things that are new and imaginative and show off the technology under the hood in the PS3 in ways that other games just can't.
And when it comes to the PlayStation 3, you are selling units, but how do you see the battle to sell units of hardware? How do you see your performance relative to where you want to be, or do you look at it relative to your competitors? How do you balance that?
PD: Well, let's go back to something we talk a lot about. I hope that people know by now that we are serious when we talk about 10-year product lifecycles. I don't know; maybe sometimes guys in your business think that it's spin. If it were spin, you wouldn't have PS1 and PS2 doing it; we're the only company that's ever done it.
So when we say we take a long-term view, we firmly believe that the PS3 will not only be around in 10 years but it'll be driving the business -- driving this industry. I don't know if our competitors' platforms will still be viable in 10 years; I do know that the PlayStation 3 will be. So we're off to a strong start, I think; you can look at our PS3 sales versus the 360 after two years, and I think in that measure we're ahead of them.
Again, we look at our performance last year with PS3 sales up 40 percent, and we're happy with that -- and yet we're accustomed to being the leader in the business, so we're not happy enough. We have our sights set on bigger victories ahead and believe that we've got the plan to make that happen.
Relative to where the PlayStation 2 was at the same point in its lifecycle, do you make those comparisons, and have you made those comparisons?
PD: Well, sure. It's our data; it's our platform, and we're always mindful of what the PS2 accomplished and what the PS3 is doing to date. That's the bar that we've set very, very high. So again we're two years into this; a lot of folks want to write the last chapter. There's at least eight good years left ahead, so.