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SCEE's David Reeves

The company's president on new announcements, price cuts, the importance of software, and winning in Europe

One of the highlights at Games Convention in Leipzig this year was the Sony Computer Entertainment Europe press conference, where president David Reeves unveiled - among other things - new hardware configurations for the PlayStation 3 and PlayStation Portable, as well as a number of new software titles and a free music streaming service.

Following that press conference spent some time with the man himself to talk over some of the key points. The press conference was announcement-heavy?
David Reeves

Yes I guess so, there were quite a few things. Were you pleased to be able to announce so many things in Europe specifically?
David Reeves

Well I think that was the point - people always say, "Why do we get things last? Why can't we save things?" I've said before, sometimes it's an advantage to be last in Europe, when everything's ironed. But this time we do have things to say in Europe. We had the music service, we're doing great things on SingStar, and there's more to come. This is a global announcement, and they recognise that the show - whether it's in Leipzig, Cologne or London - we can do the announcements wherever.

They said to us in Tokyo, "Do you want to do it here?" And we said we'd love to do it here. Let's do it. So we assume there'll be more stuff for Tokyo then?
David Reeves

You know I don't actually know, I think there probably will be, but I don't know what will be announced. It's likely to be more Japan-centric I would think. Does it also speak to Europe as having a greater prominence now as a territory, with better installed-bases, particularly for Sony?
David Reeves

I think the Japanese balance it between the regions. There are four regions - North America, we are EMEA (Europe, Middle East and Africa...but also Australia and New Zealand), there's Japan, but also there's also Asia. And Asia is becoming really very, very big now, at least for PlayStation.

And within our region, the PAL territories, we're not seeing a decline in places like the UK, Germany and France, but we are seeing massive uplifts in Russia and the Middle East, and Saudi, and Poland - our Polish guys are out there, we have an office there.

That's the difference. It's not just for us, it's the whole gaming industry, it's seeing that massive upsurge in countries that were really not into console gaming before - they were really possible PC and things like that, or Game Boy. But that has really changed. I think one of the biggest omissions from the press conference was PlayStation Home - you said nothing about that. Why leave it out?
David Reeves

The reason is that there was nothing new to say. Everything is absolutely on track. I can look you in the eyes and tell you it's on track. The closed beta has been expanding, the open beta will come in the Autumn and will be announced by the Home group - either in London or in Tokyo. I don't know when exactly, but they're in control of it.

We've got more third parties on board, and as far as I know it's all on track. And we looked at it, wondered if we should mention Home. I went through it with Nick [Caplin] and the other PR managers, and there's not much to say.

So there's nothing sinister about that, and all I've heard is good news. I'm very close to it, because it's being developed in the next building [to me]. So it looks like this will be the last Leipzig - what are your thoughts on that, and are you looking forward to Cologne?
David Reeves

Well, since you're Eurogamer, you've come to Leipzig quite a lot. It's very nostalgic for me, because I kind of set this up with EA, and Activision, and people like that. And some of the other platform holders - not Microsoft, but Nintendo originally.

The organisers here have done a fantastic job for us - here. The problem with Leipzig has been getting here and finding good hotels, and things like that. In the end we've had nearly 200,000 consumers, which is great. You have a press day, and then hordes of people out there.

But by moving to Cologne, you're going to double it. There's going to be 400,000 in Cologne next year. There'll be a press day, but it's massive. The catchment area is obviously Dortmund, Hamburg, Dusseldorf, Frankfurt, Bremen - but also you can come in from the UK, Paris, Amsterdam... it's much easier.

So we feel we can broaden the audience, double it, and that's what we think we can do. In the UK we had a show that worked pretty well, then we had two shows, and then we had no shows. Is there any concern that might happen here? Or are you confident that it'll be a success and everybody will be happy?
David Reeves

I am confident that eventually Cologne will be a success. I don't think it will be a [Heathrow] Terminal 5, although when you put on a show for the first time, you never know... [laughs]. But the Germans are very good at what they call "messe". That's why they can put them on. They have Hannover, they have Berlin - which we have next week for Sony, they have Frankfurt, they have Cologne, they have Leipzig, they have Munich. They are past masters at putting this on. They know what the businessmen want, whether it's a Tupperware show, or a pornography show, or a book fair... they know how to do it.

In London? I wish we could do it, find somewhere and say, "We'll do it there." And all the hotels are organised, I close my eyes and it works. But you have Edinburgh, and it's fun. The other thing that was very much hoped for was a price cut. There was some expectation of a price cut, but it was confirmed by Sony before the show that there wasn't going to be one.
David Reeves

There is no price cut, that is true. Not this year, at all?
David Reeves

No. Shuhei Yoshida [president of Sony Worldwide Studios] has said that the software line-up is far more of a hardware sales driver than price point - do you agree?
David Reeves

I do. Do you think that for Europe as well?
David Reeves

Yes, absolutely, and I think it's the games the Nintendo whatever price they were. I think the games have really, really driven it. We started off at the beginning of the year with GT5 Prologue, and then we went to GTA IV, then we went to Metal Gear Solid 4, then it's LittleBigPlanet. Then we move onto PES and FIFA, and all those. We're on rails, and I think those games are going to drive it.

The other thing is, as a bit of background, when you do focus groups with people, whether it's in the UK or not, it's amazing - not necessarily children, but an 11 or 12 year old boy, has in his mind... he picks up messages from everywhere. He wants a PS3 because of this game, or because of this particular feature. He doesn't necessarily think of the price, he doesn't really have a perception of it.

So he'll say to his parents that he wants a PS3, but the parent says, "Ah, we can't afford that, can we get you a Wii?" Parents don't always think like that - if he wants a new bike and he gets an old bike, he's not going to be very happy. So children don't think about the price so much.

The press think about the price, that it's got to come down. We have not announced a price drop, but we've got an 80GB instead of a 40GB - twice as many games - and there is a 160GB with EUR 70 worth of downloadable content.

So we think we're keeping that value there. The former boss of Sony Computer Entertainment was Terry Tokunaka, and he answered the question of will there be a price cut: "I'm not saying in the long term future we're not going to drop the price. What I'm saying is that we're not dropping the price this year." So does that speak to your priority in terms of leveraging platform exclusives?
David Reeves

It does. I've had this question before in terms of exclusives, and I put it this way: we believe that investment in our own intellectual properties - as particularly Phil Harrison and I tried to do in the last five years with SingStar, or with The Getaway, or with Buzz! - these are ours, we can put them in our cupboard. It's like a patent. We can take them forward.

We have to accept more and more that platform holders themselves cannot have exclusives unless they're given millions and millions of dollars not to develop a particular game for one particular platform.

But for developers, and you could take someone like Quantic Dream for example - a great game, it takes a lot of time to develop, they need a little bit of funding, external development. In exchange, it's exclusive - that works. So exclusivity possibly with developers is more likely that exclusivity with publishers.

So you're going to the source - you're looking at the new games that are coming, and that's what drives it. Heavy Rain next year will be I believe a platform driver, and there will be others. Shuhei can tell you what else is coming out, maybe he's told you already, but there are certainly from Japan going to be some really, really good stuff - both on PSP and PS3. You haven't seen it yet, we only see it in development, and they are external and internal developers.

So I think we have to accept that exclusivity is not a thing of the past, but it is probably with publishers. We might do a few things, where we feel that we need a push here or a push there. Probably the most obvious thing to talk about there would be Final Fantasy - that was a bit of a shock announcement at E3 - how do you think the fact that it's going to be a cross-platform release is going to affect hardware sales?
David Reeves

I think that just as we got a massive blip up from GTA IV, which was not exclusive, we'll get exactly the same blip up with Final Fantasy. I know it will look great on PS3, and it's up to Microsoft to clarify this, but it's still exclusive in Japan. NPD, GfK and Media Create just announced a link-up on sales data - how significant is that accurate global picture?
David Reeves

We do have our own panels. We've verified them against GfK in different countries, the problem with GfK in Europe is that they can't give you a unified picture in Europe, because they have it from different sources in different ways. They can, for example, match up GfK France with GfK in Australia, but they can't match up Germany with France.

But I think it is important to have that, because everyone disputes the numbers if it's not to their advantage. But we are absolutely sure of the numbers that we have - the sold through numbers and sell-in numbers. And do you track your rivals as well?
David Reeves

We track the rivals - we track Nintendo and Microsoft on exactly the same basis, exactly the same panels. Sometimes you might find a catalogue like Argos which isn't included, sometimes there's a huge catalogue deal and you won't see it in Chart-Track. Or as happened in Australia recently, we sold in 70,000 PS3s with Bravia TVs on a Sony deal, but GfK don't pick that up. But all of those sold through, so you see it come down. It needs explaining sometimes. You talked about services, with music and video. How important would you say visual media are to the general consumer - do you believe that people will choose to watch music videos on their PS3s? Will it be a driving factor?
David Reeves

It's what prompted it. In the focus groups, and not just in the UK, music definitely came number two. Video was number three, photos number four. And that was very, very consistent. People wish they can listen to music, and see it as well - because you can listen to it, you don't have to see the music video, and play your game at the same time. And that to them was very important.

So what we've done is something with VidZone, so what you'll have is streaming to start with, and then later - end of next year - there'll be a download service. That's not necessarily with VidZone, it might be totally different - although with VidZone they already offer a streaming service on PC. We're very comfortable working with them on a streaming service, but it doesn't mean the download service in the future will be VidZone. It might be a Sony service, I don't know.

On the video side, you'll appreciate that when a movie comes out in Europe, if it's a Fox movie it's not always Fox in Europe, or Fox in Australia. So you can't always take content in the USA and talk to Fox in Europe - because they don't have it, and that's happened with several movies.

So we have to talk to a thousand different people to get the rights, and it does take a little bit of time to get that sorted out for Europe. And we've got all the different languages and all the different cultures. So we're a bit behind, but we'll get there. You said at PlayStation Day that you were ahead of Xbox 360 sales in Europe.
David Reeves

We are indeed. And you're still comfortable with that?
David Reeves

In PAL territories we are ahead of Xbox 360, we are absolutely confident of that. So why does Microsoft think it's ahead?
David Reeves

I have no idea. I'm supremely confident of that statement. Sony would not let me say that if they hadn't seen all the numbers. You know what Sony are like, they would not let us say that, and we are 100 per cent confident of it.

David Reeves is the president of SCEE. Interview by Phil Elliott and Pat Garratt.

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