Catching Up With PlayStation: Peter Dille On Sony In 2009

Obviously, Sony has a long-term strategy, we have a 10-year cycle, you're in it for the long haul -- we understand that. But there is a now. I'm not saying you're doing badly now, but some of your answers do certainly take the long view. How do you balance that?

PD: Let's stick with now: We had record revenues last year with seven billion dollars at retail. I'll challenge you; take Sony out of the picture. Take seven billion dollars out of retail; take seven billion dollars out of this industry -- take seven billion dollars out of the third-party performance.

People want to discount the PS2 and pretend it doesn't exist, but it was the most-played system last year. It's a profit-driver for every third-party. Ask them what their business would look like without PS2. We'll talk about now all day long; I think a lot of folks want to talk about the future, so we'll engage with them in that conversation, but we're extremely proud of our performance.

As I said, it's a record year. I think it's the second or third consecutive seven-billion-dollar year. No one else has done that. We're doing things people haven't done before; we went to Destination PlayStation and said we're going to do it again -- and we try not to say things that we don't think we can back up. It's kind of the way Sony operates.

So when we say we're planning another seven-billion-dollar year in an economy like this -- we've got three platforms that we've got successful at one time -- we think that speaks volumes about the math, and we're not embarrassed in any way, shape, or form about that performance.

Something that I think is interesting is the question of attracting the Wii consumers. Do you find that it's important, from your perspective, to attract people from the Xbox 360 to the PS3? Or are they near enough as an audience that it's a challenge or irrelevant?

PD: It kind of comes down to the consumer. There are many consumers -- hardcore gamer audience in particular -- who buy more than one console, and so getting people to convert or to buy both is part of that dynamic.

I think, as you get further into a cycle, you've got folks who are more characterized as the followers. Marketers always come up with names for these groups of people. Those are people who are going to make a decision and buy one or the other, and so it becomes increasingly important that we convince them to buy ours.

You have lots of data -- years of data. What percentage of people actually do buy more than one console in any given generation? Do you have any data on that? Because that's a phenomenon that I would guess is overrepresented in the enthusiast press and the enthusiast audience compared to the broad consumer.

PD: It might be overrepresented. I'm not sure I have a percentage for you, but you're probably talking millions of people and not tens of millions because we know that there are tens of millions of consoles that get sold. It's not the majority; it's the minority of folks.

But they happen to be the 80-20 rule, right? They may be in the minority, but they're buying an awful lot of software, whereas once you get to the broader audience of folks who buy a lot of hardware, they buy fewer games -- back to your tie ratio question.

JH: The other point, I think, to what Peter said earlier, is that PlayStation products tend to be at the living room hub. Even if folks are playing playing the Wii and have a PS3, the Wii tends to stay in the closet, and the PS3 is...

PD: Yeah, I don't want to steal [CEO] Jack [Tretton]'s quote, but he's fond of saying: "Microsoft owns the office; Sony owns the living room; and Wii owns the closet." And that's an aggressive, probably quotable line.

But the point he's trying to make is something that we find backed up in a lot of our research and focus groups: that people who are playing the Wii bring it out when friends come over and then put it back away -- that the console that stays connected to the TV is a different system.

I don't know if that's your experience or of guys you talk to or the way you play the system marries that with some of the stuff we hear in our focus groups and in actual research, but we believe the PlayStation 3 is, again -- if you buy the PlayStation 3, you're going to connect it to your TV, you're going to connect it to the internet, and you're going to leave it connected; it's not going to be something you take out from time to time.

JH: What's at your living room hub; what's connected to your TV?

I live in the city, so I have several roommates. In the living room, there's an Xbox 360 there now -- primarily because I have all my stuff in my bedroom. My roommate wants a PS3; he was unemployed for a while, so it has more to do with that.

PD: And that gets back to the price issue. Again, this -- we hear it in all of our focus groups. These guys will tell us that they are convinced PlayStation 3 will emerge victorious. If they haven't bought it yet, they're intenders, and what's keeping them back is largely the price issue.

Every console that was launched has reduced the price over time, and when that day comes for PS3 we think a lot of these guys -- it's going to be like ringing a bell: "Come and get it!"

We're encouraged by the fact that there's still tremendous loyalty behind the PlayStation brand and our products; they're saying wonderful things about the PlayStation 3 and are highly aspirational. If they see a different price, I think it's going to be an entirely different conversation.

But one thing that engendered a lot of loyalty to the PlayStation brand -- on the PS2, you had a huge variety of exclusive games, and a lot of them were third-party games. The era of platform-exclusive third-party games is -- I don't want to say "drawing to a close" because it's a bit melodramatic and maybe not accurate -- but it's certainly reduced significantly. Short of funding and developing games, which you do a lot of, how do you handle that?

PD: Well, our answer to that is pretty straightforward. We know that the world has changed; we know that third-party exclusives are perhaps not extinct but not as abundant as they once were based on the economic model the third-parties are working under.

Because of that, we know it's our obligation to make sure that there are great exclusive games on our platform that we've made, and so we've invested in a studio organization that's larger than Nintendo and Microsoft combined. We've got a line-up that we're incredibly excited about this year; we had a great line-up last year.

We've got some tremendous momentum: Killzone, MLB, Infamous, Heavy Rain, MAG, SOCOM, Ratchet, God of War -- I'm not even including them all; there are some I'm being careful not to mention because they haven't been announced. We're keeping a couple of surprises, but you begin to see the depth and breadth of that.

I think, again, our competition has some great software titles; it's my view that they tend to talk about one or two things at a time, and I run out of time to say all the things that we have. I just don't know any other first-party that has that many exclusive titles going on.

I'll say it again: I haven't even mentioned any of the PlayStation Network exclusive titles that we've got going on: Fat Princess, Flower -- some wonderful games that people like yourself at judging conventions are saying are some of the most innovative products that they'll see in the marketplace this year.

We really have a great line-up; it's something that we're very excited about and believe will help us drive hardware sales, but it's a long answer to a short question. It's that breadth and depth of content across multiple genres and multiple demographics that addresses that exclusivity question; we'll do it ourselves.

It's a tough road.

PD: It's something we have to do.