An Au­di­ence With…

The PlayS­ta­tion boss on smash­ing sales tar­gets, Vita’s turn­around and the fu­ture of PS4

EDGE - - SECTIONS - BY NATHAN BROWN

PlayS­ta­tion boss Andrew House dis­cusses PS4’s fly­ing start and the new life given to PS Vita

Andrew House joined Sony in 1990, and be­came part of the PlayS­ta­tion di­vi­sion at the very be­gin­ning in 1995. Af­ter nearly a quar­ter of a century at the com­pany, he has risen to pres­i­dent and group CEO of Sony Com­puter En­ter­tain­ment, and re­cently helped to bring about the re­mark­able trans­for­ma­tion of the PlayS­ta­tion busi­ness that has seen PS4 surge to an early lead over Xbox One. Ahead of De­velop in July – where he and Mark Cerny will dis­cuss the past, present and fu­ture of PlayS­ta­tion – we catch up with House to re­flect on PS4’s fly­ing start, Ja­pan, and the per­ils of work­ing for a boss who used to do your job.

PS4 passed seven mil­lion con­soles sold re­cently. How does that stack up against your ini­tial ex­pec­ta­tions?

Mas­sively be­yond them. Back in Septem­ber, I’d laid out a goal of sell­ing in [to re­tail­ers] five mil­lion units within the fis­cal [year, end­ing March 31]. For us to sur­pass that by a very large chunk – and, in­deed, to sell those units through to con­sumers – has just been a phenom­e­nal re­sponse, for which we are enor­mously grate­ful. We are sub­stan­tially ahead of the adop­tion curve for PS2 at the same time in its life­cy­cle, which ob­vi­ously bodes ex­tremely well. And we’re al­most at a point where we’re strug­gling, re­ally, to meet de­mand. I think that’s con­tin­ued right through from launch. Hav­ing said that, we were able to ad­dress a very wide ge­o­graph­i­cal mar­ket, which we thought was im­por­tant. One of PlayS­ta­tion’s strengths is that it’s such a strong brand in Europe, and in places like the Mid­dle East and East Asia. We wanted, re­ally, to draw a bal­ance be­tween main­tain­ing good solid sup­ply – which has been very chal­leng­ing – but also mak­ing the plat­form as widely avail­able to as many con­sumers as we could around the world.

Yet you launched last in Ja­pan. That seems like an un­usual de­ci­sion for a Ja­panese com­pany.

It was a hard de­ci­sion to make. I’ll be frank with you and say that we took a lot of… I wouldn’t say crit­i­cism, but dis­ap­point­ment, which was ex­pressed fairly [strongly] by the Ja­panese gamer com­mu­nity. And that’s al­ways very hard when you know you are, if only for a few months, dis­ap­point­ing a very ea­ger and loyal au­di­ence. But we felt that it was very im­por­tant to es­tab­lish a re­ally strong base­line of con­tent for a new plat­form, in­clud­ing con­tent com­ing from Ja­panese pub­lish­ers and de­vel­op­ers, which was due just a lit­tle bit later than it was for some of the US and Euro­pean [com­pa­nies]. And we felt it was im­por­tant that, if the plat­form was go­ing to have a good solid start in our home base coun­try, we had to launch when we could see a roadmap of good con­tent, and I think the ini­tial launch num­bers and the con­tin­ued sales in Ja­pan have borne out the sen­si­ble­ness of that de­ci­sion.

There’s been a shift away from home con­soles in Ja­pan. Does liv­ing-room-based hard­ware still mat­ter there, or has mo­bile gam­ing taken over com­pletely?

Ob­vi­ously mo­bile gam­ing has be­come very prom­i­nent. I think con­soles still have a very strong point of rel­e­vance, but that rel­e­vance is go­ing to be de­fined by con­tent, and by the so­cial ex­pe­ri­ence around con­sole gam­ing. When I fired up my PS4 at home right af­ter the Ja­panese launch, I could im­me­di­ately see people on­line shar­ing game­play, lots of Ja­panese com­men­tary – the same sort of ac­tiv­ity around PS4 as we saw every­where else in the world. What’s also been re­ally pleas­ing is that the ini­tial au­di­ence that’s buy­ing PS4 in Ja­pan is much younger than we’d first an­tic­i­pated. We’re see­ing a sweet spot any­where from the mid-to-late teens through to the mid-20s, and that is con­sid­er­ably younger than where we’ve seen con­soles tra­di­tion­ally be­ing played in Ja­pan. It says to me that there is the op­por­tu­nity for a re­vival of con­sole gam­ing for a whole new au­di­ence.

You’ve been with Sony for al­most 25 years, and worked on PlayS­ta­tion since the be­gin­ning. How does a Welsh­man with an English de­gree end up work­ing for Sony in Tokyo?

I put my gam­ing his­tory back a lit­tle bit fur­ther than that. I cut my teeth on De­fender dur­ing a mis­spent youth in the ar­cades of We­ston-Su­per-Mare, when my par­ents thought I was at band prac­tice. My only gam­ing claim to fame is ac­tu­ally hav­ing beaten De­fender on one 10p piece back in the day. I cer­tainly don’t have the skill and re­ac­tion times any more, but I still cling on to my youth.

I was work­ing in com­mu­ni­ca­tions for Sony cor­po­rate [when PlayS­ta­tion be­gan], and I ac­tu­ally vol­un­teered for the project at a time when there weren’t that many tak­ers within Sony. It was felt to be rather like a toy, and was seen as a ven­ture that was go­ing up against very en­trenched com­pe­ti­tion. There was, I think, a con­sid­er­able amount of scep­ti­cism. But I had the priv­i­lege of meet­ing [Ken] Ku­taragi, [Terry] Toku­naka and Akira [Sato], the founders, very early on in the project, and was just ab­so­lutely con­vinced that the plat­form they were de­vel­op­ing and the rein­ven­tion of the busi­ness model they were un­der­tak­ing had the

op­por­tu­nity to change the game mar­ket, and [that they] were point­ing the way to a whole dif­fer­ent form of home en­ter­tain­ment. I think I made the right bet.

How does the Sony of to­day com­pare to the com­pany back then? What in­ter­nal changes had to be made in or­der to cre­ate PS4?

I like to think there’s a new gen­er­a­tion of lead­er­ship at the com­pany. I would point to Mark Cerny and my­self, and Shuhei Yoshida – and also Masayasu Ito, who runs the busi­ness di­vi­sion – as sort of the core of that. Among the four of us, there was a re­al­i­sa­tion of the need for an ab­so­lutely re­newed fo­cus on the gamer and, by ex­ten­sion, the de­vel­oper. We are at our best at Sony when we [fo­cus on that]. I think the com­bi­na­tion of some­one with a very strong de­vel­oper fo­cus [in Cerny], some­one whose back­ground has come through con­sumer mar­ket­ing in terms of my­self, and some­one who lives and breathes to­day’s con­tent cre­ation in Yoshida – cou­pled with an en­gi­neer­ing team that was will­ing to take risks and to put aside the past and do some­thing very dif­fer­ent – is re­ally the com­bi­na­tion that’s brought about the PlayS­ta­tion 4 that you see.

Does it help hav­ing, in Kaz Hi­rai, a CEO who un­der­stands both the con­sole busi­ness as a whole and what PlayS­ta­tion needs?

Well, it’s both a help and, I have to say, some­times a curse. When you’re giv­ing pre­sen­ta­tions to a boss that has held your role pre­vi­ously, you [get] an aw­ful lot more de­tailed ques­tions than you’d get from other CEOs. Jok­ing aside, Kaz hav­ing come through the PlayS­ta­tion or­gan­i­sa­tion and un­der­stand­ing the fun­da­men­tals of what makes a strong plat­form has been enor­mously help­ful in sup­port­ing our ef­forts.

The re­sult, of course, is that PS4 is fly­ing. Can you pin­point the key de­ci­sions you made that brought it such in­stant suc­cess?

One was – and we did, if not ag­o­nise, then give an aw­ful lot of con­sid­er­a­tion to this – the de­gree to which we in­cor­po­rated the Share but­ton, plac­ing a lot of em­pha­sis on broad­cast­ing and shar­ing. Sim­i­larly, with con­sid­er­able fi­nan­cial im­pli­ca­tions, doubling the size of the core mem­ory was a very hard-fought de­ci­sion. Mark and my­self and Ito were just con­vinced that this would be the step change. It was an ab­so­lutely fun­da­men­tal ex­am­ple of where we re­ally did lis­ten to what de­vel­op­ers were telling us [about] what they needed for their games to sing, and we re­sponded in kind.

“WITH RE­MOTE PLAY, VITA HAS NOW ES­SEN­TIALLY BE­COME AN EXTENDER OR AN EN­HANCER FOR THE MAIN PLAT­FORM”

But how many of them will need it all? Epic CTO Tim Sweeney says the com­ing gen­er­a­tion will see a third of the num­ber of triple-A games that we saw in the pre­vi­ous gen­er­a­tion. Does that stack up with your strat­egy? Indies are more im­por­tant than ever, but it’s still block­busters that sell con­soles, surely?

I think both are ab­so­lutely im­por­tant to hav­ing a vi­brant ecosys­tem. Look­ing at the first year of both new IP and triple-A con­tent [on PS4], it cer­tainly seems to be on par with, if not sub­stan­tially above, what we saw in the ini­tial year or two of PS3. I’m not sure I agree [with Sweeney]. There is def­i­nitely a con­cen­tra­tion on a smaller num­ber of much more per­va­sive and pow­er­ful fran­chises, but that’s why we’ve put so much em­pha­sis on reach­ing out to in­de­pen­dent talent, tak­ing ad­van­tage of the fact that for the first time we have a very vi­brant [and] con­nected com­mu­nity. It’s an op­por­tu­nity to lower the bar­rier to en­try by de­liv­er­ing games dig­i­tally, and to show­case new IP and new fran­chises from brand-new de­vel­op­ers. All of which feeds into an ecosys­tem that re­ally should al­low new talent to emerge within the in­dus­try as much as it should for large fran­chises to dom­i­nate at the top end.

PlayS­ta­tion Plus might be your big­gest com­pet­i­tive ad­van­tage over Xbox One. Was there not a con­cern when it was mooted that it might be too gen­er­ous?

I think we re­alised fairly early on that there was an in­her­ent re­ten­tion op­por­tu­nity there, self­ishly; if people were able to build up a li­brary over time, [then] that would en­cour­age them to stay part of the pro­gramme. But I think we recog­nised, since we launched PS Plus a sig­nif­i­cant de­gree of time af­ter our com­peti­tor, that we had to work harder. We had to build a propo­si­tion that was more con­tent-based, that wasn’t re­liant on a sin­gle fea­ture like on­line mul­ti­player, and I think that just made us work harder.

What we did mon­i­tor very care­fully was how mak­ing games avail­able free of charge to a very en­gaged au­di­ence was hav­ing a pos­i­tive ef­fect on sales through word of mouth. That helps in get­ting pub­lish­ers and other de­vel­op­ers on board. [We can tell them that] giv­ing IP away for free would ac­tu­ally be a net pos­i­tive, since it

would drive word of mouth and additional sales for your games to an even wider au­di­ence.

So much at­ten­tion has been paid to PS4 that Vita has been over­looked in re­cent months. Those who have one tend to love it, but how do you get it into more hands? What does it take to mar­ket a gam­ing hand­held these days?

Well, the first mar­ket that I would point to is Ja­pan, where the ded­i­cated por­ta­ble mar­ket has al­ways been very strong. We’re re­ally en­cour­aged to see the start of a very pos­i­tive spi­ral in the Ja­panese mar­ket around Vita. Weekly sales are get­ting to that point where we can re­ally see that this is a plat­form that has got some legs. That, def­i­nitely, is hav­ing an ef­fect on the Ja­panese pub­lish­ing and de­vel­op­ment com­mu­nity.

Over­seas is more chal­leng­ing. That said, we’ve taken a more holis­tic view with our plat­forms. With Re­mote Play, Vita has now es­sen­tially be­come an extender or an en­hancer for the main plat­form for other rooms in the house, or when some­one else wants to use the main screen. As the life­cy­cle of the plat­form pro­gresses, there’s an op­por­tu­nity to po­si­tion Vita for a younger au­di­ence as well with the ap­pro­pri­ate fran­chises.

And it’s be­com­ing a very ac­ces­si­ble and easy on-ramp for in­de­pen­dent de­vel­op­ers, those who have had some suc­cess in the mo­bile space and now want to work on games that are that lit­tle bit richer, that have a more ded­i­cated gam­ing in­ter­face. And we’re cer­tainly see­ing Vita be­ing em­braced by that com­mu­nity very strongly.

You an­nounced the stream­ing ser­vice PlayS­ta­tion Now ear­lier this year. Is that meant to add value to PS4 and Vita, or is it more about reach­ing other screens and other people?

I think it’s the lat­ter. It’s [about] try­ing to broaden out to au­di­ences that per­haps have not em­braced a con­sole be­fore – to deliver re­ally great con­sole-level gam­ing ex­pe­ri­ences with the con­ve­nience of a de­vice that they al­ready own. It’s a longterm strat­egy, and it’s one that we will un­der­take very care­fully. Dis­tri­bu­tion shifts and stream­ing have trans­formed the way that other en­ter­tain­ment con­tent businesses op­er­ate. We think that there’s a re­spon­si­bil­ity to take an in­dus­try lead­er­ship stance and have that trans­for­ma­tion hap­pen in the best in­ter­ests of the con­sumer.

You also have a re­spon­si­bil­ity to make sure it’s done right. It’s a big tech­ni­cal chal­lenge, isn’t it?

Ab­so­lutely, and it [needs] con­sid­er­able server in­vest­ment. We felt that the guys at Gaikai brought some sig­nif­i­cant tech­ni­cal and in­dus­try know-how, and that’s why we were keen to part­ner with them. I think the first fruits of that for us have been Re­mote Play, which grew out of tech­nol­ogy that the Gaikai guys had de­vel­oped. That is, I think, a har­bin­ger of where we will be able to take the busi­ness once the tech­nolo­gies come more fully on­line.

E3 2014 is al­most upon us now. Last year’s was a dream event for Sony, but do you think you can ever have an­other E3 like that?

I think that was a very spe­cial mo­ment in time. It’s go­ing to be ex­tremely chal­leng­ing to sur­pass the lev­els of ex­cite­ment that we had last year. What I hope we’ll do at E3 this year is get people very ex­cited about where PS4 is headed. We’ve got some great games [and] some great fran­chises that are com­ing to the plat­form that’ll keep people ex­cited about PlayS­ta­tion 4, or will be the prompt that’ll bring new people on board.

Mi­crosoft’s mis­judged poli­cies played quite a role in your suc­cess last year, but the com­pany has changed enor­mously since, along with Xbox One it­self. What’s your view of your clos­est com­peti­tor now?

I re­ally don’t think it’s my place to com­ment on some­one else’s strat­egy or lead­er­ship. It’s a cliché, but it’s a tru­ism: our fo­cus is go­ing to be ab­so­lutely on PS4. [We’re] keep­ing a stead­fast fo­cus on the gamer and the de­vel­oper that builds those games for that au­di­ence, [and] be­ing sure that we are the best place to play. I think we will see a broader reach of en­ter­tain­ment on our plat­form as well, but first and fore­most it has to be about great games. That’s what we’ve been in the busi­ness of do­ing for 20 years now, and we’re ab­so­lutely com­mit­ted to en­sur­ing that we deliver the best.

With over seven mil­lion units sold, PS4 has flown past Sony’s sales fore­cast of five mil­lion units shipped. That fig­ure would have put it on par with Xbox One, which had 5.1 mil­lion con­soles sent to re­tail by March

Vita’s slow start had many pro­claim­ing its death, but PS4 Re­mote Play and free games through PS Plus have done much to jus­tify its ex­is­tence. In Ja­pan, it jos­tles for po­si­tion with 3DS in the top-sell­ing hard­ware charts weekly

With no new hard­ware to show off and Mi­crosoft un­likely to re­peat last year’s mis­takes, House and team will have to work a lit­tle harder at this year’s E3. Games will be the pri­mary fo­cus, but ex­pect stream­ing ser­vice PlayS­ta­tion Now to fea­ture heav­ily

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