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Andrew House

SCEE's boss talks price points, the impact of Blu-ray and the importance of the Network effect

Andrew House

Probably the highlight of most people's time at Gamescom this year will have been the Sony press conference, and specifically the PlayStation 3 Slim reveal and price cut announcement.

Shortly after that, GamesIndustry.biz caught up with SCEE president, Andrew House, to dive into the ramifications of those announcements and what it would mean for the business.

GamesIndustry.biz What's the reaction been like so far?
Andrew House

I always turn those questions around, and ask what you're reaction's been? I think what I've heard anecdotally is that this is the point people were waiting for - a redesigned model and, in Euros, a significant price reduction. That's people's cue to jump into the business. I think as well that the pleasing thing when I look at the European landscape is that this is coming on what was already pretty robust sales, year-on-year. Even at the higher price point our PS3 numbers have been bang on track through this year, against a challenging economic environment. So I think we feel this can only mean a huge amount of growth for the business, particularly in the next three months. It's an exciting time, and it's great for us to be able to continue to deliver on the Sony promise - evolving, changing and hopefully delivering a better value proposition to the consumer.

GamesIndustry.biz Sony hardware has a tendency to work well, but the problem was always that in a difficult market it was always too expensive for most people - particularly when Microsoft and Nintendo were at a much lower point (regardless of inherent value). Sales may have been on target this year, but you're confident this will really speed things up now?
Andrew House

Absolutely. I hesitate right now to make solid number predictions... let's get the thing on the shelves first.

GamesIndustry.biz And ultimately, there may be green shoots of recovery, but we still don't know which way the economy will go...
Andrew House

No, we don't, and I think the other factor as well which I think is in our business as well given that seasonality is such a factor, it's always a bit of a mistake to start extrapolating out what's going on in the summer months, either positively or negatively, until you've seen what the full year is going to deliver. I'm quietly confident that we'll see a significant impact, and I think that's based on past experience. When we executed on price moves of similar magnitude in the past on PlayStation 3 for example, the impact's been really very impressive indeed. So we're hoping that, with some cautiousness around the economic environment right now, that there's still going to be some good impact. The other thing I'd point out, that we're hoping to do, is - yes, we've got a redesigned model, yes we've been able to pass on fairly significant cost savings to the consumer while maintaining the same overall device capabilities... But the other thing is that we deliberately spent a lot of time talking about the Network business - we talked about the ways we're constantly improving it, we talked about the ways we're adding services, adding functionality. What I hope we're getting to there is a kind of confluence of positives, whereby we're delivering something impactful for new users coming on board with PS3, but at the same time what's exciting for me is that with the first properly mass-market networked device we're able to add more value ongoing to existing users as well. I think that's something that people will appreciate - so yes, you're right that entry price point was always going to be a big decision for people, especially when they're really watching their Pounds or Euros. But having said that, if there's a sense that they're now part of a network that 27 million people have registered for, now they're getting video delivery service given to me, now I'm getting the opportunity to access comics on my PlayStation Portable, now I'm getting better navigation... the Network itself starts to deliver more and more value as time goes on. That's great for the existing users, and hopefully that translates and conveys encouragement to people to join in. So I think what we're trying to build is a fairly positive spiral there, and we think that's a good strategy for the long term. We've never pretended we're in the short term toy-style life cycle - we're about building this into a consumer electronics life cycle... in the same way that people don't generally expect to upgrade their TVs or video delivery devices every few years - they want to have something that's reasonably future-proof. I think for the long term that's a solid strategy.

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