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What's the Dille? Sony's Marketing Head Gets Heated
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What's the Dille? Sony's Marketing Head Gets Heated

July 24, 2007 Article Start Previous Page 6 of 6

With the PS3, is it mostly going to be PSN stuff that's going to be targeting a casual or broader market?

PD: No. You mentioned SingStar, and we at SCEA didn't get behind SingStar at the same time Europe did on PS2. But on PS3, SingStar will launch this fall on the PS3 both in the U.S. and in Europe. We want to make sure that we're there on the outset with that. That's one example. Other examples are games like Ratchet & Clank Future -- core gamers will like it, but it's an accessible action platformer in a 3D world. That genre is very accessible.

I think something like Little Big Planet has great crossover. I think core gamers will love it, but I also think that it's very accessible to casual gamers to mess around with it and upload content and share it with their friends. It meshes well with the current trends in user-created content and community that you're seeing across the broader Internet.

It strikes me as a chicken-and-egg situation. My perception is that the casual users have yet to pick up a PS3 for various reasons.

PD: Price among them.

Certainly. Do you think this kind of content is going to lure people in, or is there another way?

PD: Well, price has certainly been an issue, and we've got a lower price now. I think that will open up some more people. Maybe not all the ones down to the certain level that are playing with the Wii, but before we know if they'll come, we have to build content. We're building some things now. A lot of it is PlayStation Network casual games, but we'll also be doing some Blu-ray stuff. The way it'll probably work is that it's not just core gamers -- we're going out to the next concentric circle.

We're still at $499 -- we're not down to the PS2 pricing. What will happen is that maybe the primary purchase driver is you, but maybe your spouse, sister, or brother starts to say, "Hey, I saw this cool game on the Network store," and we've got a game downstairs where you're bowling with the Sixaxis. It's very un-PS3-like in many respects. Some people are thinking that the PS3 is just Killzone and Resistance, but you get a whole different experience.

Sony's unique PS3 sandbox title LittleBigPlanet

Does the price drop extend the time before which the business becomes profitable, on the hardware side?

PD: We're comfortable with the price drop from an overall business perspective. There's already a lot of efficiencies from a manufacturing perspective, getting the first several million PlayStation 3s out, and Blu-ray as a format is coming down across the board with standalone Blu-ray players. Some of these things are a natural progression, and others are a chicken-and-egg part of this business.

The more hardware we sell, the more money we make from a software perspective. You weigh all that together, and we think in this territory that the price move was the right thing to do. Having said all that, we're seven months in, and I don't think we're going to float to a profitable model in July of this year, but we thought that it was the overall right thing to do for health of the platform.

In the past, it used to be that the five-year console cycle was in part to reach profitability on the hardware side, and now we're on the ten-year thing for everyone except for Nintendo.

PD: And except for Microsoft, too.

No, they're not profitable.

PD: They're also not ten-year. The first Xbox was around for four or five, and then they stopped making software for it.

I'm saying five years before you're going to reach profitability, and then you have to go five years past. I feel like Sony and Microsoft are both in that camp. It's like a longer tail before your hardware makes you money.

PD: I don't want to be argumentative, but I take issue with Microsoft either having a long tail or being profitable, because they've never done either. They've never made a dime in this business, number one. Number two, they've never had a tail. They've never been successful enough to have a tail, so the notion of a back half of the curve doesn't exist for them. They stopped the Xbox, and I feel for the guy who bought an Xbox a month before they said, "We're out of business, and we're moving on."

The reason I get a little emotional about that is that it's a stark contrast to our approach. If you buy a PlayStation system, we're going to stand behind you for ten years, and we're going to deliver games like God of War II in the seventh year of the cycle.

I'm saying they've got to if they want to stay in this business.

PD: I agree with that. They do have to, and we'll see if they do.

I was just saying that for this generation, it seems like a similar boat, but you can certainly take issue with that.

PD: Let's just pose a couple of questions. So their prospect for a ten-year lifecycle with the Xbox: you've got an inconsistent design. Some of them have a hard drive, and some of them don't. None of them have a Blu-ray player, and the HD-DVD will be out of business in a matter of months. Is this a ten-year product? By the way, it doesn't even work, so do they want to be selling it for ten years and refurbishing them all for ten more years? I don't think that's a ten-year product. You or they could disagree with me, but I'd put that up against the PS3 anyday.

What they have now is a lead, and I wonder if the PS3 will be able to get enough exclusives to where it's really going to matter to enough people to buy more of them than the 360.

PD: What they talked about at their press conference was GTA and Rock Band, and both of those are on our platform. What we talked about was Metal Gear, Haze, and Unreal, which actually will have exclusivity. Some are forever, and some are for a period of time.

What we also talked about from a first-party perspective was that we've got a development organization that will deliver 15 Blu-ray exclusives and 80 downloadable exclusives, so I think there's an awful lot of exclusives that we have. They have some, one of which is a big deal, and the others are not. It's a good question. It's really where the rubber hits the road. Does the consumer respond to one thing, or many things?

It's also a question of how big of a deal that lead is when things are coming out on multiple consoles. It'll be interesting to see how this shakes out. I was talking to someone about the Wii's lifecycle, and how they can afford for it to be short if they want since they're profitable out of the gate.

PD: I agree. We get asked about the Wii a lot, as you might imagine, and I actually like to hear about people like you. I'm not convinced that it's a long-term proposition just based on whether gamers want to fundamentally shift the UI that drastically, or is it more of a fad that you take out during the holidays and the whole family's visiting? It's fun to play that type of game sometimes, but is it the way you want to play games all the time?

We'll see if gamers have that issue, because it may be the non-gamers that make this whole thing happen. Are they going to buy a second game? Who knows. They might buy it for Wii Fit, and that's all they do. It's certainly going to get more people to think they can have fun in this space though.

PD: If they're successful at that, I think it's good news for everybody.

Article Start Previous Page 6 of 6

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