Sony Worldwide Studios boss Shuhei Yoshida is, in many ways, the gamer's gaming executive. Enthusiastic and personable, he juggles the responsibility of managing Sony's software output with a willingness to constantly engage with gamers on Twitter, where his rapid, honest responses to questions about PlayStation have probably earned Sony more goodwill and positive headlines than any carefully formulated PR plan could ever hope to. He's also responsible for driving the company's engagement with indie developers and small studios, and often seems to be part of an engaging double-act with Vita and PS4 system architect Mark Cerny - the two faces of Sony's reinvention and resurgence.
Yet Yoshida's ebullience can't disguise the magnitude of the challenges Sony faces. PS4 may be riding high on a wave of goodwill, but gamer affection for PS Vita hasn't translated into sales - and Sony itself, the parent company, remains deeply troubled, so much so that powerful American investors in the firm have called publicly for it to be broken up in order to shed unprofitable divisions.
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GamesIndustry International sat down with Yoshida in at Sony Studios Japan's offices in Tokyo in the weeks after the Tokyo Game Show to discuss all these challenges and more. Today, we publish the first half of that interview - covering PlayStation Vita, Vita TV, mobile strategy and the intriguing notion that the diminutive Vita TV might find itself built into future devices from other Sony divisions as well.
GI: How was Tokyo Game Show for you? Did you get a good response?
Shuhei Yoshida: For us, the SCEJ press conference event was the big thing in terms of announcing information about PS4 for the Japanese market, and introducing the new PS Vita and Vita TV. It was a huge thing. TGS is an important event, of course, but in terms of business strategy and new product introductions, that was already done a week before. We wanted many people to come to TGS, so we announced all the things that you could try at TGS, prior to TGS.
"Whether it's portable or it's console, it doesn't matter. If people see the games that they want to play, they'll go and purchase that hardware"
TGS is a consumer-focused show, compared to something like E3 - E3 is trade, so we can do the announcements during the show, but TGS is a consumer show. We make sure that people know what they can expect when they visit TGS.
I'm very happy that so many people visited TGS. The PS4 area was huge - lots of kiosks had to stop distributing the tickets for their game trials. I felt sorry for people who were there but were a bit late in the day and couldn't try the games that they wanted. In terms of reaction, it was very very positive. As for PS Vita TV, that's something we were able to keep close to our chest until the announcement, and it's been getting quite good reactions as well. I'm very happy about the reactions.
GI: PS Vita TV is Asia-only at the moment - you still have no plans for North America or Europe?
Shuhei Yoshida: I don't think we are saying that we have no plans - we have no plans that we can discuss!
GI: What do you see as the difference between the Asian market and the North American or European market that makes PS Vita more sensible for Asia but not for those other markets - at least at the start?
Shuhei Yoshida: Vita TV is a very versatile device. There are so many different things that that small device can do, and there are quite distinct usage and distinct consumer targets that we can pursue. The market situation is very different between Japan and the Western market in terms of whether it's a portable market, whether it's a console market... Especially the situation with Vita in Japan right now is quite healthy. Lots of new titles have been announced and we're launching the new hardware here first. The messaging and the targeting have to be carefully planned - that's why we decided not to go global with one message. We'll tailor our message and focus first on the Japanese market where the Vita is most active.
GI: You mentioned that the portable market and the home market are differently balanced in Japan compared to the West - I've seen figures saying that around 65% of games sold in Japan this year are portable games. Why is that? Is it something that you think will happen in the West as well?
Shuhei Yoshida: There are many ways that can be explained - many factors contribute to it. To me, the biggest thing is what games are available in each market. This may be a bit counter-intuitive, but whether it's portable or it's console, it doesn't matter. If people see the games that they want to play, they'll probably go and purchase that hardware whether it's portable or console. When you look at the most popular titles in Japan now, they're more often found on a portable platform. It's completely different in the US and Europe - the most popular franchise there was just released a few days ago, GTA V, and that's a console title.
"Vita TV is quite a low barrier of entry compared to a console. We're targeting a casual audience that perhaps used to play games back when games were more popular in Japan"
Of course, there's also a difference in the lifestyles. You live in Japan now - I don't know how big a mansion you live in in Tokyo [laughs], but if you want to throw a home party, it's a bit challenging here in Japan, right? People like to get together somewhere outside, and games like Monster Hunter on portable hardware are very convenient for that. There's also the long commute. Everyone here spends hours on trains and portable devices are very popular to play games on.
Because I lived in the USA, I don't know about people in Europe - but American people love large TVs. They love playing big titles on big screens and getting people to their home, throwing parties... It just fits with their lifestyle, I think.
GI: Thinking about that lifestyle side of things - you're thinking about consumers who already own a PS Vita now buying a Vita TV so that they can just continue those experiences when they get home? Do you think you'll also get people who don't own a Vita already using it as a new way into games?
Shuhei Yoshida: In Japan, we've got two distinct consumers in mind - and I believe we're crafting messaging for the launch of Vita TV which caters to two different groups. One is a more casual audience. Because of the price and size of the console, the Vita TV could be a nice entry product for people who want to try Hulu or Tsutaya TV or many other video services that haven't quite caught on in popularity in Japan compared to the western market.
For the launch of PS Vita TV, our hardware teams approached many TV services companies who haven't created services on PS3 or PS Vita as yet, but targeted the launch of Vita TV to make their video services available. The primary usage for those groups, at under $100, is to enjoy movies and TV shows using these services - and on top of that, if you're interested, it can play games as well, games like PS1 emulated games. There are lots of great games like the Final Fantasy series there for around 600 Yen ($6). It's quite a low barrier of entry compared to a console. We're targeting a casual audience that perhaps used to play games back when games were more popular in Japan, around the PS1 days, but have kind of moved on to some other things - but still like to watch movies and so on.
"Talking about cloud gaming, all you need is a screen, the ability to decode and take input from a controller and send it back to the server. All kinds of hardware can do that. There's even interest from other hardware manufacturers"
That's one group. The other group is people who own PS Vita, and when PS4 launches, people who own PS4 can connect Vita TV to services that they're enjoying. What's most exciting to me is that PS Vita TV signifies a new way of thinking for us at SCE - a new way to define the PlayStation platform. Rather than a platform being tied to each individual console hardware, we are trying to shift what "PlayStation" means onto the services side. So, if you already own PS Vita and have purchased maybe 20 digital games, the chances are that maybe 10 of them will work on PS Vita TV and you can just download them without any additional cost. Just by buying the hardware, if you own a PS Vita you can enjoy what you already own - you've already bought into the PlayStation digital ecosystem, and by adding another hardware device you can just expand the usage.
That's pretty exciting, but that's nothing new for other kinds of content on other platforms like iOS and so on. In a sense we're trying to catch up, but on the PlayStation we are so focused on games - we believe that that's something quite unique in this very crowded market.
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GI: It feels like a continuation of the network strategy that you started with PS Plus.
Shuhei Yoshida: Absolutely, yes.
GI: I own a PS3, I have PS Plus - I'm bound to buy a Vita sooner or later because I have free Vita games piling up...
Shuhei Yoshida: Already, yes! So that's why we're bundling three free months of PS Plus service with the launch of PS Vita TV. People will see that with the PS Plus service they can get these games, and they can enjoy them on PS Vita TV or on PS Vita itself, if they were to buy another piece of hardware.
GI: You said that Vita TV is a new way of thinking for SCE; is it also something that you want to push out to the rest of Sony? When I look at a tiny box like that, with all the innards of a powerful console, for under $100 - I can't help but think that that should be inside every Bravia TV and Vaio PC next year.
Shuhei Yoshida: What's exciting about PS Vita TV for the future is, of course, that once the cloud gaming services are started this is a very easy, low-entry product that will let you enjoy libraries of hundreds of games without downloading or any storage. SCE is now much closer to other parts of Sony - Kaz Hirai took over Sony, and our headquarters office is now inside the main Sony building.
It's a very strange feeling; you know, I used to work for Sony, a long time ago, around 17 or 18 years ago. I was a Sony employee, for the electronics company. When I joined the launch of PlayStation 1, I quit Sony and became an employee of Sony Computer Entertainment - and moved to the Aoyama area, because SCE was incorporated there. I never imagined that I'd come back to the Sony headquarters building, many years later - but now Kaz' strategy is that gaming is one of the three pillars of Sony's electronics business. Kaz is pushing that with the tagline "One Sony"... It's interesting, so many companies are using "One"... Anyway, with the One Sony strategy, there are lots of interactions among engineers, among product planning people, between Sony Computer Entertainment and the different parts of Sony. That's great, so, to your question of whether we're "pushing"... Rather, they're coming to us! They'd really like to work with us and we'd like to work with them.
"Many big decisions at SCE had to get approval from Sony headquarters. I was very scared, seeing these interactions - some people had no idea how video games work"
There are so many things we could do, but we have limited resources. We have to take one step at a time. Especially talking about cloud gaming, all you need is a screen, the ability to decode video and take input from a controller and send it back to the server. All kinds of hardware can do that - so there's a lot of interest from the Sony side to working with us. There's even interest from other hardware manufacturers, because Gaikai used to be independent before SCE acquired them. They already had relationships and business discussions ongoing with other major hardware manufacturers around the world.
We're trying to figure this out, but even covering the PlayStation products' different hardware is an engineering challenge. It's a matrix of what content to serve from the server, what devices to serve to and what area in the world to cover - because we need servers close to the market, since latency is so important. These three things, it's a puzzle; we have to figure out which order makes most sense. The current strategy is that the first step is to launch in the USA, to launch with the PS3 content first, because there's a great library already, and to target devices like PS4 and PS3 first, along with PS Vita close afterwards. Then we'll expand along all of those three different axis - that will include other product lines.
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GI: You mentioned One Sony, Kaz being in charge... When Kaz took over, there was a feeling that this was PlayStation taking over Sony.
Shuhei Yoshida: That's a western way of saying it, maybe. The eastern way of saying it is... Well. I was very very afraid, to be honest, when Kaz was one of the candidates. The electronics business and the video game business are very different - market strategy, business models, it's all very very different. Because I've been a part of the management group of SCE headquarters I'd had a chance to have some interactions with Sony executives at that time. Some people understood. Other people had no idea! And they were in a position to say yes or no to investment - our business plans, investments, the acquisition of Gaikai, many things like that. Many big decisions at SCE had to get approval from Sony headquarters. I was very scared, seeing these interactions - some people had no idea how video games work. If they had the final say, we'd have to spend extra effort to explain and educate them. Kaz being on top is so... Relieving!
GI: You have a more relaxed life now?
Shuhei Yoshida: Yeah, yeah! [sighs] It's not that we are getting any favours, but being understood by the top management is such a comfort, it's a great feeling.
GI: Lots of people say that PlayStation is a differentiator for Sony. There are lots of electronics companies in the world and Sony has a tough time competing against companies like Samsung and so on - but nobody else has PlayStation. Samsung doesn't have a brand or content like this. Is the rest of the company, maybe thanks to Kaz, starting to feel that PlayStation is something Sony can use to make a clear difference between its products and the competition?
Shuhei Yoshida: Yes. I'd say that PlayStation is recognised as one of the strengths, the differentiations that Sony can have. The other example may be image sensors. It's not a secret - many people know that one of the most popular mobile devices uses Sony's camera technology. There are a number of things where Sony is either number one, or at least near the top. Kaz and his management group is identifying and trying to help to leverage these strengths across different product categories. That's how they see gaming and PlayStation - as one of the pillars - and they're pushing the interactions between different groups.
They acquired Ericsson's share of Sony Ericsson, and it became a 100 per cent subsidiary, Sony Mobile - so that Sony has no hesitation to share all the best tech or engineering know-how, even people get sent to Sony Mobile. Recent Xperia phones like the Z and the Z1 are taking a lot from the image sensor and the camera group's expertise, and trying to differentiate the Xperia from other mobile phones. Step by step, it's showing results - it's quite exciting to see that.
GI: I wanted to talk a little bit about the mobile situation. You have a PlayStation Mobile system, if you buy an Xperia phone there's PlayStation Mobile there - it's a bit clunky, you have to install a new app for some reason which is a bit strange...
Shuhei Yoshida: Yeah, yeah. And it's not easy.
"We've totally changed our approach to mobile products. In the past, we felt like these guys were competition to our portable games. Why not try to include them in the PlayStation ecosystem?"
GI: A lot of people feel like mobile and tablet is a threat to consoles. From what you're saying now, it sounds like you feel that they're so different that they can always exist side by side. Is that really how you feel?
Shuhei Yoshida: Ah, yes. What we're saying now is that we've totally changed our approach to mobile products like smartphones and tablets. In the past, we felt like these guys were competition to our portable games, in general - but now, everyone owns these smartphones and tablets. It's like everyone had a PC before - it's a tool that people use every day. Why not try to include them in the PlayStation ecosystem? Not that we're releasing lots of games on these mobile products, but to somehow push our PlayStation information to these devices that people already use every day.
Lots of people don't seek out game-specific info - they're busy. But because they use social network services, App Stores... Let's push our info to them. That's why we are creating the hook, releasing the official PlayStation apps on Android and iOS at the launch of PS4. That has many functions - if you own a PS4, it's your connection to your own games or console, or your PlayStation Network community. Even if you don't own a PS4, it can be a way to find out what's happening in the PlayStation world; or you could use these devices as an input device for PS4.
We've totally shifted our way of thinking. Through the companion apps, the official PlayStation app and game dedicated apps... In some cases, we're creating small games that go with PS4 titles. We're releasing a puzzle game themed around Knack that you can play for free. It's fun, and by playing the game you earn some items that you can use on PS4. People might be motivated, because they've already unlocked some items, to take a look at what this Knack game on the PS4 is all about.
That's the much broader approach that we're taking, trying to embrace mobile products. It's totally different from PlayStation Mobile - we'll continue to support that, but more as the entry SDK for people who are less professional... We talk about indies for PS4 and PS Vita, and those people typically have many years of experience of making games somewhere very professional, of making professional-quality games, but they still have to go through a developer contract, purchase a development kit and SDK. For PS Mobile, you don't need any dedicated hardware. You just download the SDK, just click certain buttons and now you can develop games on PlayStation. In that way, we believe that has a purpose. These are two different activities.
GI: Even with that positive outlook, saying you'll use mobile as part of your strategy - haven't smartphones and tablets hurt PlayStation Vita? In Japan, it's not been too bad, but in the west, Vita has had a very hard time. Is that because everyone has a smartphone, or is there another reason?
Shuhei Yoshida: That's a really big part of it. The price point... We were very excited to be able to launch PS Vita for $250, that was our target pricing - under $300, because you have to buy a memory card. But people already own smartphones, right? They're paying lots of money to own smartphones - it's subsidised but they're paying back through a monthly subscription, two years of paying $80 every month, for example. That's a lot of money they're already spending.
So for them, that's already committed - and in order for them to play games on a smartphone, incremental investment is almost zero. It's hard to compete with zero price, which is also why the free-to-play model makes sense for casual players.
"We don't necessarily talk about catching up to the 3DS - but we'd like to increase the installed base of PS Vita"
To your question, I was asked during TGS how badly this hurts portable gaming consoles, and my answer was - quite. Quite badly. There's no question. But that's not the only reason, in terms of the installed base - compare it to 3DS. The 3DS is doing much better.
GI: You're redesigning the Vita, and it's slimmer and lighter - it's a lovely console - but what, aside from that, can you do to catch up at least to 3DS, if not to the smartphones?
Shuhei Yoshida: We don't necessarily talk about catching up to the 3DS - but we'd like to increase the installed base of PS Vita. For us to be able to provide better hardware, in our mind - the new PS Vita is slimmer and lighter, easier to hold, has some internal memory from the get-go, so it's a bit more value - but the important thing is to continue to provide great games and game experiences. The games can come not only from PS Vita's dedicated games - Vita and PS4 are designed with each other in mind, to connect to each other. If you own a PS4, you can play PS4 games via remote play, and once we start the Gaikai service, you'll be able to play PS3 games on PS Vita. We continue to add our services on PlayStation, and for PS Vita, the enjoyment and the sources of games will expand, not just from PS Vita dedicated games. Those are the strengths that we have on PS Vita compared to other products - it's a device that you can use to enjoy PlayStation content from different sources.
GI: So you see it as an accompanying device to the rest of the PlayStation world.
Shuhei Yoshida: Yes, and the next step is PS Vita TV.
GI: One of the things that every review of the original PS Vita loved was the screen, and you've changed that in the new model. What was the reasoning for that? Was it a cost problem?
Shuhei Yoshida: The quality of LCDs is increasing very rapidly - you can talk to media people who cover gadgets, and they know that LCD has made huge advancements. When we chose OLED for the launch of PS Vita, we really wanted to have a great display and we're proud of what we have on the original PS Vita - but when our engineers approached the second generation, there were a lot more options on the LCD side. We worked with LCD vendors and got their latest and greatest, and we're very happy with the quality of the screen.
LCD has other benefits. You talked about the cost, but it's not just cost - new Vita is much thinner and lighter, and being LCD helps us to achieve that.
People in Japan in particular like things that are thinner and lighter - it's always surprising when I talk to people, especially American people, and they say "original PS Vita is perfect for me - if it gets thinner, it may not hold as well!" or something. They don't mind at all, which is quite interesting.
GI: Will you continue to sell the original alongside the new Vita for some time, so people can choose?
Shuhei Yoshida: Yes, because the new Vita is Wi-Fi only. For the 3G version, we'll continue [the old model]. By focusing on Wi-Fi, we were able to make the engineering much easier.