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E3: David Reeves Talks PS3

The Euro bundle, the new PSP and the fight to be market leader.

At a special E3 event this evening, SCEE president David Reeves announced a new PS3 bundle for Europe. Comprised of a console, two games and a second sixaxis controller, it will cost GBP 425 / EUR 599 - the same price as the standalone machine previously retailed for.

Following the announcement, sat down with Reeves to find out more about the decision not to do what SCEA did and introduce a straight price cut - plus the new PSP, future plans and who's going to win the next-gen console battle. Now you've made the announcement about the PS3 bundle for Europe, what kind of reaction are you expecting?

David Reeves: I think people will say to us, 'This is really good for the summer, what are you going to do in October?'. We think that we've offered a lot of value to keep the momentum going until the big titles come out. Then we'll look at doing something else, but for moment I think it's the right move for us.

How concerned are you about possible criticisms that you should have given European consumers what SCEA has given US consumers, i.e. the option to pay a lower price?

Well, they're not really are they, because what the US are offering from the 1st of August is a USD 599 version with one game. All they're doing is taking their stock in trade that they've got at the moment of the 60GB model, marking the price down and it will all be gone by the end of July.

So once the 60GB is gone, that will be the end of the 60GB then?

In America, yes.

Why not offer the 80GB model in Europe?

The difference between 60GB and 80GB is not really necessary. The difference in cost between a 60 and 80 is just Euro cents; it's nothing, because the cost of memory is so small.

Probably we could have gone for 80GB, but does it really make any difference? We just know that we get a better supply on the 60GB than we will on the 80GB. So we chose to continue with the 60GB until we find that we can get something better, maybe lower cost. It just didn't seem necessary to us.

But if as you say there's no difference between the 60GB and 80GB, is SCEA making the right decision in offering the 80GB?

The difference is that the 60GB we have now has about 88 per cent backwards compatibility. The 60GB they had had 100 per cent backwards compatibility. They felt that by going down for 100 to 88, for example, that they'd have to add something in - and that's what they did.

That was their decision. We just felt that we didn't want to complicate things; wewanted to have one model, and we've had one model, we've done very well with it, now we'll add value and we'll think about what we'll do closer to Christmas.

But you're still asking people to commit GBP 425 to a games console. Isn't there a problem with the perception that that's an awful lot of money to shell out?

It is, but surprisingly, people are paying that amount of money for it. Now they'll get two games and an extra controller as well. It's not just a games machine as you know - you can play Blu-ray movies, you can download games from the network, you can browse the Internet and you can play music on it.

What about the PSP? You've made it smaller and lighter, but isn't the real problem that there aren't the games for it?

Yes. It's setting itself up. It needed to be lighter and slimmer to make it portable. To solve the problem, if there is a problem with PSP, is to have better and more original games.

Not only third parties but internally, Phil's studios are working not only on PSP purposed games, but we're thinking of moving some of the stuff we have on the Network on to PSP - things like Calling All Cars. We may repurpose it for PSP.

Why not add some of the other things gamers have been asking for, like a built-in hard drive?

We looked at them and they were too expensive. It might be we can look at a hard drive later, because hard drive prices now are relatively inexpensive. But by putting in a hard drive now you add weight as well. But I think it's definitely possible later, yes.

What did you think of Sony's E3 press conference this year?

I wasn't here; I arrived this afternoon and I'm leaving tomorrow. I've heard reports that it was a bit humbler, with more humility than last year, which I think was needed, that it was quite slick, that it was focusing on games... So it seems to have been fairly well received. But it's not for me to judge, is it?

Was that humbler approach taken because you think Sony has appeared arrogant in the past?

I think they have. Not deliberately, but at E3 last year and maybe the year before, the presentations they did to a European and a Japanese perspective - yes. To an American perspective - no, because the difference in cultures is you have to go, 'Ra-ra, I'm the best.'

We in Europe, and especially the Japanese, don't necessarily accept that. You have to say, 'We're doing our best, but we're not the best.'

So you'll have missed the Microsoft conference as well... Peter Moore seemed to be saying they're in a tight race with the Wii, while PS3 is lagging behind. What's your perspective on that?

Globally, I can't really comment. I would say that in the UK, Xbox 360 is doing okay. I would say in Continental Europe it's about dead. In Japan it's dead. I think it's doing very well in the US.

Wii is doing very well. Hats off to them; not only have they done well, they've got back in stock. They're marketing the console and the games extremely well. Two years ago the industry was writing them off, but they've come back. We owe a debt to Nintendo for keeping the industry going in the last couple of years; they're the ones who have kept it going.

Would you agree that Sony is no longer the market leader?

I don't think it's to do with market leadership, it's to do with growth. If we are to look back in five years' time, what we have to say is we have to double this industry in five years. It's not necessarily who's the market leader.

I think it will be cyclical. It's the same with Adidas and Converse and Puma and Nike; they all bring out new models, but in the end they have such store presence and so much marketing they have trebled that industry in the last eight years. That's what we have to do...

We've now got to appeal to families and to older people; that's where the growth is going to come, broader franchises. They're not going to be all Killzones, they're not going to be all God of Wars or Metal Gear Solids. They're going to be LittleBigPlanets, Calling All Cars, localised SingStar versions. We're doing a Bollywood version of SingStar; we'll probably do one in Russian as well.

Microsoft placed a big emphasis at this year's E3 on titles that are out this year, whereas yours featured more about titles due out in the longer term future, and Peter Moore said it's about winning this holiday. How are you going to compete?

I honestly don't think that just having the games on Xbox 360 is enough. I know it's nice to focus on one year, but he said the same last year - 'We're going to win the holiday season.' But they didn't; they missed that opportunity.

I don't want to criticise them, but they can't say the same again. PlayStation 3, you will see, will be far and away the winner when you look at it by March '08. They really, really will. It's something that is going to be a slow burner, and suddenly it's like a tsunami; it will just overtake you.

What will cause that tipping point?

You can't take a scattergun approach of putting all the games out. The Metal Gear Solids and the GT franchises - you don't have to put them out in November and December. You can put them out in January, March, April, whenever you like. A big game will move the platform.

In fact having a window of silence sometimes in those months is very good - that's what we've found. Metal Gear Solid always does well in March.

As you say you've got Metal Gear Solid and Gran Turismo, and then Microsoft's got the likes of Halo. Then there's this murkiness around titles like GTA IV, where extra content is coming out on 360, and Microsoft is saying 360 is the only place where you can get the full GTA IV experience. Why didn't you get that content?

It's just a question of money. If Microsoft wants to pay USD 50 million just for that... Then I would say they're quite desperate. But as Jack Tretton said, we're really not in the business any more of buying exclusivity. We're more in the business of developing, from Phil Harrison's area, new IPs. We want to move on.

It's too easy to look at and say, 'We must get the GTA franchise.' By the time you've got it the world's moved on, and they'll be talking about some other game. I've got children who are 11 to 15 years old, and those kids are looking forward and not necessarily looking back.

They're the kids who are going to be buying it - the new franchises, but not necessarily the old ones that we signed up to E3 four or five years ago. They're not going to drive the market in the future; it's going to be the new ones.

Where do you see PlayStation, and the industry in general, in five years' time?

It's going to be a lot more network based, to start with. I have absolutely no doubt about that. That will bring in people who are more PC-oriented, people who are more music-oriented and downloading through iPod.

I think there will be much more focus on shorter games, episodic games, instant gratification; less emphasis on a hard console or a hard laptop. The concept of a console eventually will disappear.

Are you still looking at PlayStation 3 as a ten year machine?

Yes, we are. We think with the capacity in the hard drive to update the firmware, that's certainly possible. We're in year eight of PlayStation 2 and I think we can still get to ten years on PlayStation 3.

That doesn't mean to say that something else might come out. I don't think it will be a PlayStation 4; it will be something completely different. But something will come out before we get to ten years on PlayStation 3.

So let's say it's not a physical machine, that physical media goes away - where will that leave retailers?

Retail, as they have in the music industry, will be left with something - but not everything they want... I think eventually they will struggle. Some countries like France are adjusting. Certainly in Japan they are adjusting. Unless UK retailers move in that direction, they are going to struggle.

David Reeves is president of Sony Computer Entertainment Europe. Interview by Ellie Gibson.