GP: PS2 was the leading-selling console this holiday. We were surprised. Can you speak to that? How did you do that?
TRETTON: It started with the original PlayStation, and we said "ten-year product lifecycle." [Before that], no platform had lasted more than five years. We were rolling a boulder up a hill [with the PSX after five years], because the industry assumed you abandoned the technology after five years no matter how successful it's been.
But that effort has now paid dues on the PS2, because the developers see the continued relevance of the PS2, and consumers do, too. A gamer's original $299 investment for PS2 is still paying dividends seven years later. Many of those consumers like PS2 so much that they bought the new one when we redesigned it. I think we'll be doing the same thing with PS3 -- it's just that we're looking at a 60-day window compared to seven years with the PS2.
The PS2 is extremely relevant. Some of the best games that have ever come out came out in 2006, and will be coming 2007. God of War II will stack up to any game on any system, and will attract hardcore types who are on the leading edge of technology. I think the PS2 is a great machine. I have access to every game on every platform, and I still find myself gravitating towards PS2 games. What it lacks in state-of-the-art technology it more than delivers in value and quality gameplay. That means a lot to consumers.
GP: Who are these people who bought a PS2 this year?
TRETTON: This holiday season, I think they were a lot of the same consumers. With the launch of the PS3, I had the privilege of being at the register and meeting some of the first people in line. Guys would introduce themselves to me at the Metreon and said "I don't know if you remembered me, but I was number seven in line for PSP and number four in line for PS2. And I'll be here for PlayStation 4 and I hope you will be, too."
We've never let the consumer down, and that's one of our advantages. Can I guarantee that every PlayStation game anybody ever bought was an investment that they cherished? No. But I think the vast majority of the PlayStation owners really [feel as if] they got their money's worth, so there's a confidence level that PlayStation will deliver for them.
Before we entered the games business in 1995, critics said that games are for 12-to-17 year-old boys. I think the PlayStation brand has ushered in people who, ten years, would never have considered themselves gamers. We're really contributing what is now a form of mainstream entertainment, rather than a niche audience.
We're clearly expanding the marketplace. It's not just happening in North America, it's happening worldwide. We've got 102 million for the PSX; we're at 115 million now on the PS2, and there's a long way from end of the line. This year will be as robust in terms of interest and hardware as last year. Clearly we've brought a lot of new people to the party, and PS3 will bring more people.
Devices like PSP and PS3 will be a real Trojan horse for the gaming industry. We have consumer data that says that there were technophiles who bought the PlayStation 3 because it was the best Blu-ray player on the market, and far and away the best value. They didn't buy it as a gaming machine, but in a year or so I'll bet you big money that they'll be gamers and we'll all sell them software for years to come. It's tough to get a controller into somebody's hands, but if you provide them with a great experience, you'll hook 'em.
GP: What does Sony need to do to make the PS3 as big as PSX and PS2?
TRETTON: Never resting on our laurels. We got lightning in a bottle with the PSX. We ushered in a new demographic, a more diverse gaming experience, and 3D graphics where people were used to 2D. And we could have said "we were successful there, so let's do a [PlayStation 1.5] and see if we can milk this audience a little bit longer." But we decided that we really needed to go back to the drawing board and provide that wow factor for PS2.
Consumer expectations keep rising higher and higher. The easy job would be making a PlayStation 2.5, and it retailed for $199 or $299 and was clearly improved over the PlayStation 2 but only marginally better. We could have said, "We're already the market leader, we've got the momentum, so why take risks?" But we've never been about that. So we're going to take some risks and give consumers the technology that they'll need for the next ten years.
A lot of people in early 2007 are saying "Well, I don't need PS3's technology." But we know, given where technology's headed, that they're going to want it. And they'll want to invest in it, and they'll pay more for it than [they would with] the PlayStation 3. You're already seeing it now, where people are adding new configurations to hard disk drives, movie players, and so on. Technology that we integrate into the PlayStation 3.
GP: Let's talk online strategy. What does PlayStation Network have that Xbox Live doesn't?
TRETTON: First and foremost, it's free. And there's no "free, but..." You plug it in, log onto the network and you're immediately downloading demos and movie content. You're able to play Resistance: Fall of Man against people all over the country. You're having a robust online experience without signing up for some service [like Xbox Live]. There's content available for purchase, if you want to download something like Blast Factor, but that's your choice. There's no cost of entry.
But the caveat is, we're only a few months into the PS3 online experience. By no means have we revealed our entire hand in what we intend to bring to consumers. That promise requires consumers to take a leap of faith. But the best proof points are, "were you satisfied with your PS2 or PSP?" The research we get is overwhelmingly positive.
The online experience is very robust right now, but honestly it's nowhere near where we want it to be. It's still in the very early stages. It's the grand opening of the store and the paint's still drying, we're still hanging up all the merchandise. You'll see that evolve very quickly. Ultimately, the consumer will be able to choose what interests them, and they won't be force-fed: they can go from publisher to publisher, from business model to business model, and find the one that interests them. Some players may only care about SOCOM, and they don't want to pay for another game that they're not interested in. That's not to say that everything will be free on the PlayStation Network, but it is not force-fed to you in a subscription format. As a consumer, that's how I prefer to buy. I don't like to order my food before I go into the restaurant, I like to look over the menu and decide how hungry I am and what I want to eat.
GP: In the future, what's in store for PlayStation Network online? Can you give us a sneak peek?
TRETTON: We have some key advantages that other competitors can't provide. First of all, the PlayStation heritage lets us tap into thousands of games from the PlayStation and PlayStation 2. We can give consumers to games they've never seen, games that were only released in Europe or Japan. For another company to do that, they'll be limited in their resources.
Another thing is we're putting a serious effort behind development of downloadable games, to deliver content in a non-retail environment. Games with full 1080p, games that may be a bit smaller in scope, but from a technology and pricing standpoint are very attractive. A significant effort there, with 30-plus games in development from our worldwide studios group alone.
And another one people tend to discount. You can't ignore those four letters that are on the outside of the PS3: S-O-N-Y. Sony Pictures is the number one box office company in the world, and Sony BMG is a leading music publisher, and we have access to all their content and technology and strengths. And home theater technology, too. Sony is sitting at the sweet spot of the [entertainment industry] better than any company in the word. It's a matter of us taking advantage of our internal resources, and we're just starting to flex our muscles in that area. But it's not hard to imagine us taking advantage of that.