Nintendo brought in a whole new audience with its highly accessible Wii in 2006, and Microsoft loudly muscled into the market with the Xbox in 2001. But it’s arguably Sony’s multifarious PlayStation machines that have been the primary force in growing the industry. With 150m sales, PlayStation 2 was the biggest console of all time. PlayStation 4, launched last November, is currently on 10m and selling faster than all its predecessors.
The world is, however, very different from when the first PlayStation launched 20 years ago. In the fragmented 21st century, mobiles, tablets and social networks have emerged as major gaming platforms. There’s a question mark over whether the latest Sony machine can really define a space for itself.
The person with the most responsibility for ensuring that it does is Andrew House. The president and group CEO of Sony Computer Entertainment, he’s the big boss of Sony’s entire PlayStation operation. Yet he doesn’t come across as the archetypal CEO, and is certainly more hands-on. It was House who brought in the veteran games developer Mark Cerny to design the PlayStation 4, and House who had to decide on the inclusion of two key elements: a hard disk drive, and 8gb of system memory rather than the previously mooted 4gb. According to Cerny’s calculations, each of these could add $1bn to the PlayStation 4’s manufacturing costs. Both went in.
House still recalls the deliberations: “The balance of the discussion was Mark advocating for the voice of the developer, and the consumer experience that he could deliver. I had to offset that with some fiscal responsibility. I basically felt that the memory increase was a slam-dunk. It was articulated very well by Mark as to what it was going to do for the majority of PlayStation 4 game experiences.
“In essence, we were placing a little bit of a bet that we were going to be good at reducing costs on the hardware and finding other trade-offs and offsets.”
20 years of PlayStation
House was born in Wales, and spent his formative years at state school in Weston-super-Mare. In the early 1990s, he moved out to Tokyo to teach English but later found himself working for Sony’s international PR department. He joined the nascent PlayStation division and found himself at the sharp end of Sony’s marketing drive to bring games to an older audience.
“My memories are about getting involved with the project even prior to launch – when it was still a nascent little thing, and nobody was sure whether it would go anywhere,” he says. “But the big turning point for me was the launch of PlayStation 2, where we had this sense that it was moving games out of this position as a kid’s toy and more into the entertainment mainstream.”
Emulating the PS2
PlayStation 2 is the biggest selling home console ever made; it’s understandable that House wants to emulate that success with the PlayStation 4, the first iteration that is very much his baby. He’s aware of the ever-mutating nature of the console business – that there are now a lot more devices that consumers can play games on, from phones to set-top boxes. But he believes the new machine could even outdo the PS2.
“So far, so good,” he says simply. “We’re significantly outpacing the ramp-up on PS2 to date. The PS4 is a much more fully-fledged general entertainment box, which I think increases its mass appeal. Analysts ask me about life-cycle comparisons. I always answer very honestly: that it’s tough to calculate, because there have been several major shifts since the PlayStation 2, all of which can pull in different directions.
“With the PS2, we were pretty much unable to have any kind of business in Latin America or most of the Asian markets, because of piracy, but the PlayStation 3 got us to the point where we can actually have a healthy software business there. We’ve had recent positive signs around China and our ability to launch PlayStation 4 there as well – that didn’t exist on previous life-cycles.”
Consoles and the 21st century
With the PlayStation 4 now successfully launched, Sony can start thinking about the peripheral technologies and services that are de rigueur for any console in the 21st century.
PlayStation 4 owners are particularly keen to start using PlayStation Now, an online service which will allow them to stream PS3 games to their console over the Internet. A recent US trial trial of the system drew some negative press due to its rental pricing model that charged users $2.99 for just four hours of play. Sony said the model was experimental, but this is a whole new area for House to navigate.
“Consumer satisfaction levels with the streaming quality and low latency have been very, very good,” says House. “But it does depend on the strength of your connection. We’ve been very clear in our messaging, saying if it’s not working for you, these are the reasons why. Fortunately, such issues have arisen in a very, very small minority of cases, and we’re already, looking at ways we can iterate and make that a better experience.
“The other area for experimentation has been more around the business model itself. People were doing comparisons between the rental price and the purchase price. What we didn’t do a good enough job of communicating was that the rental price had all of the downloadable content associated with the game as well, so it wasn’t a fair equation. But this is why we’re in beta: learning as we go along.”
What about the content itself? “It’s going to be PS3-based mainly, but I think there is the opportunity, via emulation, to then offer up a broader catalogue of PlayStation 2 and even PlayStation content where appropriate,” he says.
Apparently, there is no firm launch date yet – Sony is seeking to build a viable service in the US before expanding elsewhere. And PS4 is only one platform that the PS Now service will run on. “The exciting thing for me is not delivering PlayStation 3 experiences to a PlayStation 4, but delivering them to a smart TV,” says House. “The next frontier of engagement for us is going to be with the TV manufacturers.”
Then there’s Project Morpheus, the prototype virtual reality headset for the PlayStation 4, which will allow gamers to inhabit games rather than view them on television screens. Virtual reality floundered as a consumer proposition in the early 90s, mostly because the technology wasn’t advanced enough to produce a convincing experience. However, the hype surrounding the Oculus Rift VR headset for the PC, which has received millions in investor funding and has sold over 100,000 development kits, has thrust it back into the technological limelight.
In his keynote at this summer’s Develop gaming conference, House said that virtual reality has reached a “Tipping point.” Strikingly, few of the early Project Morpheus demos – which include street-luging and being suspended in a virtual shark cage – don’t feel like conventional game experiences. Is that what we can expect from the technology? “They could be short, but very compelling and intense – get in, get out experiences,” says House. “We’ve had a lot of interest from the movie studios – not necessarily in replicating a film experience, but even developing a sort of promotional tool for an upcoming film, which gives you a sense of what that movie is going to be.”
So how is Sony managing the development of this new platform? “We’re getting to grips with the nuts and bolts of the hardware itself, and doing things like reducing any sense of nausea and so on,” says House. “What you’re experiencing right now is not the final product. The benefit of engaging with a wide range of developers this early is that we’re all learning together. I think it’s important to open up to the broadest range of what those experiences could be, because that could create excitement for the platform overall. But as we move towards productisation and launch, we’ll narrow that down in the more traditional way.”
“I see my role as trying to strike a balance between the health of our company [Sony Computer Entertainment] and contributing to the health of the business [Sony as a whole]. We’ve got to have a really good business in the here-and-now, but also be placing some bets on where we think technology could take us.”
Making TV for PS4
Although they’re 20 years apart, House sees similarities in the way that the original PlayStation and the new PS4 represent key transitions for the games industry. The first machine switched from expensive game cartridges to much cheaper and more versatile CDs; the PlayStation 4 era is moving away from “boxed products” altogether toward the digital distribution of games. “We have a networked audience that has now reached scale,” says House. “For me, that has been the defining shift between PlayStation 3 and PlayStation 4. We’ve got something like 52 million monthly active users on PlayStation Network. When I put that audience in front of Sony Pictures it blew them away.”
Armed with that audience, House is taking a similar plunge to the likes of Netflix and Amazon, and has commissioned an original TV series for the PlayStation Network called Powers – based on a series of Marvel comics, it will be available free to PS Plus subscribers. Twenty years after the launch of PlayStation, Sony retains the experimental approach to the industry; back then it was marketing to twenty-somethings and putting games on CDs, now it’s virtual reality and TV. But it seems the underlying philosophy remains: give it a try, but concentrate on quality.
“I didn’t really want to go charging out there with a raft of reality-based content and different kinds of shows,” says House. “TV content is new and experimental for us, but we’ll make something that people will watch and talk about, and then we’ll see where we’ll take it.”
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