If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

This is Living

SCE president Kaz Hirai on winning the console war, converting PS2 users to the PS3, and the latest on PlayStation Home

Last week GamesIndustry.biz published a set of five questions that we put to both of the top men at the Sony and Microsoft games businesses.

Here now is the interview with Kaz Hirai, president and group CEO of Sony Computer Entertainment, presented in full - with some interesting comments on how the company is approaching new control devices and the latest on PlayStation Home.

GamesIndustry.biz What's been the most important breakthrough of this generation?
Kaz Hirai

I think that there are so many different perspectives on that, but one of the things that I think is most important perhaps from a gaming experience is the fact that with PlayStation 3 we've been able to move the consumers from a standard definition environment to a high definition environment.

Also the fact that the Cell processor when compared to the Emotion Engine. Put it this way, the leap between PSOne and PlayStation 2 was considerable, but the leap from PS2 to PlayStation 3 is even bigger. Including the high definition, as well as the raw graphics and computational power that the Cell processor brings, and I think that the publishers and development teams have yet to unlock all of what the console can do.

You probably saw the testimonial video [in the press conference] - some of the development teams are now actually starting to talk about finding out, harnessing the power of the SPUs, and not having to rely on the core processor, so there's some more head room there as well.

And when you look from a macro standpoint, that's one of the biggest leaps that we've been able to achieve with the PlayStation 3, if you compare with consoles from previous generations.

GamesIndustry.biz And how is the transitioning from PS2 to PS3 going for you?
Kaz Hirai

I think that the beauty there is that transition can be done when the consumers feel that it's the right time to do so - because PS2 is still a console that, nine years into it and 130 million units later, is still going strong. So we talked about a ten-year life cycle, but it doesn't mean that we end after ten years.

If somebody bought a PS2 today, for example, it doesn't mean that in twelve months they've got to migrate over to PS3. That console's going to be here for another while, so it's really at the consumers' time line - as opposed to a time line that we dictate - which I think is more or less what the industry has gone through with all the other consoles, but for the PlayStation platforms.

I think that's a huge difference, and therefore the transition of the PS2 consumers ultimately to the PS3 is very important, but again - that can be done at the consumers' choice of when, as opposed to something that we dictate. I think that's a huge difference in your messaging to your consumers.

GamesIndustry.biz How relaxed can you be about that time frame? There's obviously some financial pressure involved - you're keen to have profitability in the games business by the end of this fiscal year, is that something that would be accelerated by a quicker PS2-to-PS3 transition?
Kaz Hirai

Well I think that ultimately since we know that most PS2 consumers will transition over to the PS3, number one - that's not something that we look at in fiscal year terms, and number two - quite honestly a lot of people ask me if we make money on the PS2 hardware…well we make money on the PS2 hardware, and we have some good tie ratios, so it's not an all-or-nothing proposition. The PS2 business is very profitable for us, so consumers that stay with the PS2 this year, if they transition over next year, that's fantastic for us.

And ultimately, when you look back, a PS2 consumer that just came into that fold today - and if they then transition to the PS3 - we've done business with them on the PS2 and the related software, and then on the PS3 and that related software, as opposed to them just coming to PS3. So I think we can have it both ways, have our cake and eat it too.

GamesIndustry.biz Do you think that some of the backwards compatibility issues would potentially prevent people from making that leap?
Kaz Hirai

I think the PS2 users, especially those that come into the PS2 at this point in time, enjoy the console with the PS2 software. It's been well documented that compatibility between the PS2 and PS3 is no longer there, it was a conscious decision to move over, but it's not like the PS2 suddenly stops working as soon as somebody buys a PS3.

So it means that if they want to play their PS2 games they'll keep their PS2, and then play the PS3 games and do all the other fun stuff you can do, on the PS3.

GamesIndustry.biz What do you consider the most important product of this generation?
Kaz Hirai

I think that it goes without saying - the most important product is the games that play on the PS3 first and foremost. That's always been the most important. I think what differentiates this generation of hardware is, in addition to the games, all the other non-game service and content that we can provide to the consumers through the PS3.

[In the press conference] we talked about the video delivery service launching here in the United States, and that's a non-game content service that we're providing. We didn't have much time to talk about it and demo it, but Life with PlayStation - completely unrelated to a gaming experience, but nonetheless something you can enjoy on your PS3.

Home is somewhat related to games. It will start as being a very games-centric experience, but it has the potential to expand into other non-game service and applications. This is a B2B play, but the dynamic in-game advertising for example - again, another revenue source that's not related to the traditional way of selling videogames.

So games have always been important, but if I were to single out another element that is going to become more important to the PlayStation business, it's all the non-game-but-network-enabled services and content, which really allows us to expand the horizon, and hopefully the installed base of the PlayStation 3.

And if we can really enhance these services, as well as different content that is considered to be non-game, I think we have two avenues to bring consumers into the platform. One via the traditional way of great videogame console, but there's so much stuff to do. On the other hand, if you're not interested that much in videogames but if there's so much other things to do, they'll buy the PS3 for the other services they can enjoy - and then, since it's a videogame player as well, there are some games they might enjoy. So we can have it both ways.

GamesIndustry.biz Do you see yourselves as active or reactive?
Kaz Hirai

If you look back at the history of our business - whether it's PSOne, PS2, PS3 or PSP - it's pretty much the situation where we've decided where we want to go, and provided the content and services to make sure it gets us there.

There haven't been too man instances where people can point to us and say: "Aha!" It's been pretty much all original, whether we're talking about the way we architect the hardware, the peripherals, as well as content and services as well.

Obviously with games we have first-person shooters, so I guess somebody can point to that and say it's not original, but I think that's taking it to the extreme, and I don't think that's where you were going with it.

But there haven't been too many instances that I could really point to that says we're basically just following whoever else is going into the market with something that resonates, and then we follow along.

Even a great example would be that there's been all this talk about casual gaming, social gaming, and all that good stuff - that's true to a certain extent and I don't deny that, but quite honestly it's something that we've been doing since about year six of the PlayStation 2.

And unless we've been successful in the casual gaming market, you don't get to nine years and 130 million units - because you've got to appeal to the real light users at that point in time.

So casual and social gaming? Yep, been there, done that and we have a pretty good track record. The input device may not be so eye-catching, but the numbers speak for themselves.

GamesIndustry.biz On the subject of input device - we've had some impeccable sources reveal to GamesIndustry.biz that Sony is working on new game controllers - what are your plans in that area, and what do you learn from others' success in that area?
Kaz Hirai

I think we would approach it from the other way around, to basically say that whether it's a first party game, or a third party game, for the user to really enjoy the experience the controller we already have doesn't really do the job - and so we need a controller that look like this, and does X, Y and Z - then let's go ahead and make sure that we have something like that so the gameplay can be enhanced.

We'd approach it from the software entertainment side.

GamesIndustry.biz Like Buzz! for example?
Kaz Hirai

Exactly, or even the microphone for SingStar, or whatever it is. It didn't come from "Okay, let's do a microphone, what can we do?" We wanted to do that game, so we needed a microphone, so we come at it from the other way around.

If ultimately, whether it's a fishing game or whatever it is, if that's something we need for the PS3 we'll do it - but it's not a question of Nintendo having this Wii controller, so let's go ahead and do something that's similar.

GamesIndustry.biz Are you working on new concepts to see what might be appropriate at the moment?
Kaz Hirai

This isn't something we suddenly decided to do on a whim - we've always looked at a wide variety of controllers. Some are perhaps smaller in terms of a market size, in which case we'll look for a third party to come up with a specific game, specific controller.

Other times we'll see there's something that's got a big enough market, and do it ourselves. So we look at a variety of things, we've done that in the past and right now we're doing the same as well.

GamesIndustry.biz Who is winning this generation?
Kaz Hirai

I think that 'winning' and 'won' are two different things. Where I stand, we look at it in the context of a ten year life cycle as we've done with PSOne and PS2, which is certainly on its way.

So it's really a matter of looking back after ten years minimum and asking what you've actually accomplished in terms of the installed base, in terms of the business that you generated for the internal first party studios, in terms of the business you've generated for the third party studios, in terms of the business you've generated for the retailers…

And that's when you actually look back and say, "Yes, this platform was successful, it wasn't successful, it was so-so," - whatever the case may be. So we're still only two years into the PS3, and I think the true test is really like the situation we find ourselves with PS2, where nine years later and 130 million units later we can look back and say, "Yeah - it's been a pretty successful platform."

So I know some people have been talking about who will be number one in this generation, and what have you, but before we get into that question, what about the life cycle management? If we want to compare apples to apples, let's see a ten year life cycle, because I don't see that anywhere else.

If somebody wants to say that they're going to have a larger installed base, we should compare notes after ten years, because otherwise we're not talking about the same thing.

And we certainly don't do the consumer the disservice of basically saying that the consoles have gone by the wayside because we have a new one. Right now, a prime example? PS2 is nine years into it. Where's the Xbox? Where's the GameCube?

Same thing with the original PlayStation. At some point we looked around and asked what happened to the Saturn? Where's the N64? So if we're doing that, let's compare apples to apples, and for me, because we're on a ten year life cycle, unless we're talking ten years it doesn't really make that much sense to me.

GamesIndustry.biz What's happening with PlayStation Home? We didn't see much more in the press conference, and some people are asking questions about how it will be received - are you concerned that when the product does come out that it will end up being an anticlimax?
Kaz Hirai

Well I would put it the other way around - because we got so much buzz, had we launched it before we thought it was the right time and the right features and functionality to launch it - with the high anticipation, people would go there in droves the first time around, they would check it out and say, "This isn't fun at all, so I'm not coming back again."

The other scenario, at least if I had a choice, that I'd like to go down - which is the path we're doing - okay, we've been dinged, I've been personally dinged many times, but if I know we're doing it for the right reasons and that once we launch the service this Fall it's going to be something that the consumers once they go there see that it's actually going to be a fun service, that to me is a lot better than doing it the other way around.

I've said this on many occasions, and right now we're aiming for a Fall open beta programme, but no beta should be opened before its time, and it's important enough of an initiative for the platform and for SCE, that we don't want to prematurely launch it and then be dinged for having a bad service.

GamesIndustry.biz Something like the Warhammer MMO has been delayed in order to bring the quality up, and people were disappointed, but understood that it's about quality?
Kaz Hirai

Right, and quite honestly I don't want to diminish the importance of software titles, but this is a platform initiative which means that we need to be extra careful that we've crossed all the 't's and dotted all the 'i's.

Kaz Hirai is the president and group CEO of Sony Computer Entertainment. Interview by Phil Elliott.

Phil Elliott avatar

Phil Elliott