Sony Fires Back

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On hard stats

He talks about a hardware battle that isn’t getting much in the way of column inches - PS2 versus Xbox 360. “PlayStation 2 is outselling Xbox 360 for the year;  we’re out-selling Xbox 360 month after month.  The same machine that beat the Xbox in 2001 is beating the Xbox 360 in 2006. That’s amazing and that’s big news, but you don’t read a lot about that. I’ve been with this company twelve years and I don’t think it’s ever been better positioned.”

For Tretton, what’s most relevant is Sony’s achievements in the past. “We launched the original PlayStation and we did 250,000 units and that led to upwards of a 100million worldwide. And then people said ‘are you aware that no company has ever led the industry two generations in a row?’  So we shipped 500,000 [PS2s] at launch and we’re now up to 41 million [in North America] and we’re 30 percent ahead of where we were on the original PlayStation.”

On retail commitment

Meanwhile, for retailers the puzzle of PlayStation 3 isn’t just academic. They have brutal Holiday targets to achieve, the unforgiving matrix of floor-space yields and maximum margins.

How can they be expected to give over precious real estate for the sake of a few dozen units? Tretton says Sony’s history of success is a swinging factor. “It would have been much more difficult in 1995 when we had no shelf space and no heritage. But we have built up a lot of credibility with retailers by delivering time after time after time, platform after platform.

“They’ve seen that PlayStation 2 helped sell PSP and PSP helped sell PlayStation 2 and that PlayStation3 will not only generate revenue for them, it will also have a positive effect on the other two platforms.”

One part of Sony’s marketing is shipping 15,000 interactive pods to retailers. “Every consumer, whether they’re able to buy a PS3 or not, will have an opportunity to sample the hardware on day one. Retailers would like to generate as much revenue as they can on November 17 and over this Holiday season. But they also want to establish themselves as a destination for PlayStation 3, and that requires commitment just like it does for us and for anybody in the business.

On games publishers

He says the same dynamic works for publishers, who, at launch at least, will be selling to a small user-base. But support up front is expected and beneficial. “A publisher could say ‘development costs are so high, let’s just stay on the side-lines, wait until the installed base gets up to 10 million and then we’ll put out our first PlayStation 3 game.’ But they know that they can’t afford to do that because they’ve got to go through the technology learning curve. They’ve got to make a statement to investors that they’re on the cutting edge of software development. They want to be out there establishing themselves as a pre-eminent player. Fortunately everybody has the long term view on this.”

On rivals

We’re running out of time, so I don’t get to ask about the software library, Blu-ray as a format, Sony’s online plans, the whole kaleidoscope of activities that are going into this extraordinary product. But I do get to ask about Sony’s fabulously entertaining rivalry with Microsoft and Nintendo. When will PlayStation 3 overtake the Xbox 360 in North America?

“The honest answer is we can’t overtake them until we ship more units than they’ve sold. But we will ultimately accomplish our goals. Our goals aren’t necessarily about overtaking Xbox 360 or overtaking Wii. It’s our goal to maintain our leadership position.

“We entered this 12-17 year old male dominated toy business in 1995 and we’ve led the change to this being a mainstream entertainment business, that now appeals to a much larger demographic. The goal for PlayStation 3 is having a machine that has the staying power for the next decade. If there are 125 million television households in North America, we’d like to be in all of them. Right now we’ve made it into about one out of three so there’s two out of three households that we’re not in.

“If our competition gets to all the same number of consumers, you know, we’ve still accomplishing our goal. I’d be very disappointed if we were the world’s tallest midget.  If all three platforms failed but we failed less than the other two I would not cheer ‘well at least we beat those guys!’  To me that would be disastrous. It’s not about doing better than the competition. It’s about doing better than we’ve done in the past even though the bar has been set very, very high.”

Provided by Next Generation—
Interactive Entertainment Today