2nd January 2013: This feature was originally published in November 2010 to mark the PlayStation 2's 10th anniversary in Europe. We're highlighting it again today to mark the news that Sony is ceasing production of the PS2 console.
PS2 is the most successful console ever produced, having sold over 150 million units. Here, someone who was there when it all began talks to other Sony staff, past and present, about what really went on behind the scenes.
The first thing I saw when I walked in the room was a duck wearing a suit. Next to him stood a grubby-looking mummy, trying to hold a glass of champagne in bandaged fingers.
In the corner, a guy in a wheelchair was talking to a girl whose eyes should have looked too far apart. She was sitting on a sofa next to a disembodied arm and a small boy. He looked innocent enough, but I knew he had conquered worlds.
This was my introduction to the games industry. It was Thursday 23rd November 2000, the eve of the European launch of PlayStation 2. Just three days earlier I'd started my new job as a copywriter at Sony Computer Entertainment Europe. Having been a gamer and a PlayStation fan for years, I felt like Charlie being given the keys to the chocolate factory.
In fact I'd been given an invite to the PS2 launch party, hosted by hip London ad agency TBWA. They were responsible for the Third Place advert directed by David Lynch, as they had been for the Double Life and Mental Wealth campaigns.
It was the stars of these adverts I was now walking past as I headed for the bar. I was about to make the most exciting discovery yet in an already thrill-packed week - at games industry parties, all the drinks are free.
You know what happened next. Well, perhaps not the thing about the bottles of Bombay Sapphire and the guy from R&D who tried to put his business card down my bra. But those are other stories. This is the story of how PlayStation 2 went on to become the best-selling console of all time.
The machine still holds that title. According to Sony's latest figures, 147.6 million PS2 units have now been sold around the globe. That's approaching double the amount of Wiis shifted and 40 per cent more units than PS3 and Xbox 360 combined.
PlayStation 2's success was down to a combination of factors, such as well-designed hardware, a price point which quickly became affordable and great games. It was also about the calculated genius and bold business sense of the people behind the scenes, along with a healthy dollop of sheer luck.
Sony's commitment to making PS2 a hit didn't begin with that launch campaign. It was established back in 1995, when Chris Deering left his native US to become the founding president of Sony Computer Entertainment Europe. Speaking today, he recalls taking a long-term view from the beginning.
"From day one on PS1, I started thinking about what I would do to make sure PS2 could win round two," Deering says.
"Nintendo and SEGA had never won two in a row. We used to say it was like winning two gold medals in two back-to-back Olympics - it just never happened. So I set that as a personal goal."
The first part of the mission went according to plan. PlayStation 1 became the first games console to achieve global sales of 100 million. It made gaming cool, as evidenced by the appearance of WipEout in nightclubs and Lara Croft on the cover of The Face, an event still cited by journalists as being about as culturally significant as the invention of books.
So Sony already had a strong fanbase onside, as senior PR manager Jonathan Fargher recalls. "We'd done some really cool things with PS1 and there was a kind of hype and expectation. There was a hell of a lot of good will towards PS2, people wanted it to do well," he says.
"It's hard not to look back then and look at things now. PlayStation as a brand was incredibly cool and cutting edge. People were genuinely excited. There was a level of buzz for the launch that was probably missing from later hardware launches." Cranking the handle on the internal hype machine was Chris Deering. He was the first member of SCEE staff to see the finished PS2 console, at a special event in Tokyo's International Convention Centre.
"I remember sending an email at 2am from Japan to all the employees in London, saying, 'It's better than we ever expected. This is going to be huge. I feel privileged to have even been in the room. This is history in the making.' It was beautiful."
UK managing director Ray Maguire was also impressed, if a bit more British about it. "The first time I saw the PS2 prototype it was just a shell made of wood. It was a complete step-change from PS1. Just the way it was constructed and designed... It was fresh, it was exciting. It looked more meaty and powerful."
However, impressive hardware isn't enough to win a console war, as Sony was aware. "A platform is only ever going to be successful as the games we produce for it," says Fargher.
Though no one would ever have said so at the time, not everyone in the company was confident all the games launching alongside the PS2 were blockbuster titles. That included David Reeves, then head of marketing and later Deering's successor as SCEE president.
"The line-up... I have to say we had a few dogs in there, like Fantavision," he says.
Fargher wasn't keen on Sony's first-party firework sim, either. "Some of the launch titles were OK, but they weren't... I mean, Fantavision... Three weeks after bonfire night and we were launching a game about fireworks.
"We got away with a hell of a lot," he admits. "At E3 we'd promised the world, basically. We'd promised games that would look like Toy Story. The games we delivered at launch, as with any platform... Not so much."
Even development champion Phil Harrison, who was head of Worldwide Studios by the time he left Sony, is prepared to admit that not all the games in the line-up were stellar. "Fantavision was great fun to play but I don't think it really fulfilled the promise of what PS2 hardware technology had been billed as being capable of," he says.
"I don't think, looking at the launch line-up, you would have extrapolated 148 million sales. It was a mixed bag. There was nothing there that you would have said was completely changing the way games were played.
"But getting any piece of software out for the launch of a new piece of hardware is an incredible undertaking. The hardware specification is a moveable target, the operating system keeps changing, the procedures for testing the games keep changing... So to launch a game with the hardware is a phenomenal achievement."
Just how important is the initial software line-up to a console's long-term success, anyway? At launch, it's all about getting consumers to buy into a brand. Or at least that was how Sony saw things back in 2000, as Alan Duncan, who today is head of UK marketing, explains.
"Those were the good old days when creative advertising agencies were the gods of marketing. Since then I've had to present PlayStation brand campaigns and it's difficult, because everyone looks at you as if to say, 'Are you mad?'"
Mind you, says Duncan, that was his own reaction on seeing David Lynch's Third Place advert for the first time. Good job the marketing boss was fully behind it, following a bit of nudging.
"The agencies really pushed us but we bought into their crazy ideas," says David Reeves.
"You can never say you're 100 per cent confident but research showed it would appeal to those people who were waiting for something to come out that was really wacky.
"I remember showing it to some of the managing directors and they looked at it and thought, 'They're crazy.' But in the next breath they thought, 'That's good.'"
And so the duck and the mummy and the disembodied arm made it to our television screens. But would the same advert get the bigwigs' approval today?
"No," says Duncan, without hesitation. "The role of TV has changed completely. Back then it was about setting up the personality of the brand... Now people interact with you via social media, and we're in a much more competitive marketplace."
PlayStation 2 did have competitors too. The Dreamcast had already been out in Europe for over a year by the time Sony's console arrived. But within six months, SEGA announced it was pulling out of the hardware market completely. So did PS2 kill the Dreamcast?
"That's tough to say but it was certainly a big contributing factor," suggests Simon Roberts, one of SCEE's games consultants back then and a senior producer today.
"SEGA did manage to mess that one up quite spectacularly, quite quickly... Although maybe it's unfair to say that. Sony is a major behemoth of a corporation with a lot of assets, clout and financial ability. SEGA was relatively new and it was probably too much for them to handle."
The Dreamcast may have been vanquished but there was another threat on the horizon. This rival had even bigger backing than Sony could provide, as Chris Deering knew.
"The Japanese were not too worried, but I knew Microsoft had five times more money than Sony. They could do anything they wanted if they put their mind to it," he says.
"So from day one, I assumed Microsoft was going to be a horrific competitor."
Deering needn't have worried so much. Xbox didn't launch till nearly 18 months after PS2 and never caught up. "We worked hard to make it as difficult as we could for them, but they didn't turn out to be as prolific and experienced as we thought," he says now.
"I overestimated their ability to get it together in Europe. They hired some good people but they were very US-centric. We built these huge defensive walls and they tended to work.
"But it was still 50 per cent luck - I'm not going to say I was a genius. I was just aware and focused."
One of Sony's key defensive strategies was to secure the support of other software publishers and their commitment to exclusive deals. "We courted third-parties intensely, like crazy," says Simon Roberts.
"I was on that team and I know how much effort we put into getting people on board, getting the right kind of games and giving them the right incentives."
According to Deering, this strategy came straight from the father of PlayStation himself. "Ken Kutaragi was very pro third-party. He said we should never allow ourselves to have more than a third of the software market or we'd drive away other investments, and I believed that."
Not everyone agreed with Chris and Ken, however. "The US paid lip service but in their DNA they still believed in the philosophy of companies like SEGA and Nintendo, who saw exclusives as nice to have for the royalties, but wanted their own titles to succeed," says Deering.
The bid to secure those big exclusives began, says David Reeves, at E3 2000. "A few weeks prior, we sat down and targeted the games we thought would be good for exclusivity. We had a list of about seven and a pot of money.
"We went off to LA and we were holed up in the Sunset Marquis hotel, where Chris and I shared a small villa. We invited the publishers in one by one and just worked through the list."
During these meetings, Deering and Reeves would offer incentives in exchange for exclusivity. These included a reduction in the platform fee, marketing support and new-generation dev kits.
"The last meeting of the day was with [Take-Two boss] Kelly Sumner," says Deering. (Reeves doesn't recall this being set up as an official meeting, by the way, but just "a few beers in the evening".)
"We picked up something called State of Emergency, which I don't think would have been on Xbox anyway. Then I said, 'What else have you got?'
"And they said, 'Well, we've got this Grand Theft Auto game... I suppose we could do a deal on that.'"
"Our technical people had said GTA III was not bad. It was innovative, but not a monster. I had just heard it was good. So I said, 'OK.'"
The precise details of the deal have never been revealed but according to Reeves, "It was remarkably cheap."
These days, says Harrison, it's no longer economically viable to secure exclusives, due to the high cost of development. "So I think PS2 was probably the last era in which you will see that happen in a meaningful way," he predicts.
For all that publisher deals were important to PS2's success, Sony's in-house titles were also key. The list is long, distinguished and peppered with landmark games, from Gran Turismo 3 ("Probably the first game that lived up to the expectations of the console" - Duncan) to SOCOM ("The fact we were doing online gaming was amazing," says Brooke).
But the game most mentioned by Sony alumni when you start talking classic PS2 titles is ICO - even though it "never, ever had any commercial success", as Maguire admits. "It was ahead of its time. People weren't looking for a relationship between two characters who interacted on the screen simultaneously."
ICO was the poster child for a component of PS2 which was close to Kutaragi's heart - the Emotion Engine. That was the brand name given to the machine's CPU, which had been designed with a specific philosophy of game design in mind.
"Kutaragi was a visionary," says SCE UK PR boss David Wilson. "Taken on its own it might seem pretentious, but to call it the Emotion Engine was making a bold statement about what we were out to achieve."
According to Harrison there was science behind the concept, too. "The idea Kutaragi and his team of engineers established was that the CPU would be capable not just of number-crunching, but of delivering the kind of mathematical capability required to simulate emotion.
"That was a very wide and lofty goal and I don't think we realised it in quite the way we planned. But it was the start of a process where you changed the way games were developed, inside the code, to be more believable."
Harrison recalls attending a silicon chip conference in San Francisco where Sony's engineers presented the Emotion Engine in the form of an academic paper. "I was fascinated by the reaction because the hardcore silicon chip experts fell into two camps," he says.
"One was, 'I don't believe it. It's all made up.' The other camp was, 'I do believe it, but there's no way we're ever going to be able to manufacture it because it's too complicated.'
"Ken proved everybody wrong. You could build it, and you could build it in volume. That was the moment Sony Computer Entertainment went from being just a games company to becoming a major global player in silicon chip design."
However, it wasn't the Emotion Engine which gave PS2 the power to reach an audience beyond gamers.
"The DVD player was a massive part of that," says digital content manager Jim Smith. "I bought my first DVD player six months before the console launched and it cost £499. They still cost that when PS2 launched, at £299. So PS2 was the cheapest decent DVD player you could buy."
The inclusion of a DVD player helped to move games consoles out of the bedroom and into the living room. "You didn't have to tuck it away in case someone came round," says Fargher. "It almost became a lifestyle accessory - people were proud they had a PlayStation in their lounge."
PS2's mass-market appeal was also increased by the addition of features which turned out to be more significant than Sony had imagined. "I think one of the defining features of the console, although we didn't really know it at the time, was the inclusion of USB ports," says Harrison.
"That proved to be a pivotal hardware choice. It allowed all kinds of alternative controllers to happen, from microphones to guitars to EyeToy."
It's easy to forget, in these days of voice-responsive cameras and magic light-up ping pong balls, that motion controlled gaming dates all the way back to PS2 days. And guess who was responsible for kicking the trend off?
"One of Phil's really great contributions was being passionate about EyeToy," says Deering. "It didn't have the full backing of the management over in the States. They thought it was too wussy, they were still SEGA-minded and anything that wasn't hardcore was possibly too effeminate for their image."
Harrison was EyeToy's champion right from the start. "It started when I gave a speech at the Game Developers Conference in March 1999. A guy came up to me afterwards and gave me his business card. He said something along the lines of, 'I think PS2 hardware is capable of doing machine vision, and I'd love to talk to you about it.'
"He ended up getting an interview and working for our R&D team in the US. And that guy was Dr Richard Marks."
Today, Marks is known as the man who explains the sciencey bits behind PlayStation Move and 3D gaming. But back then he was the creator of EyeToy, and the person tasked by Harrison with showing the technology to a room full of SCEE's software developers at an internal summit.
"I laid out a challenge," explains Harrison. "I said, 'Who wants to turn this into a commercial product? Because I think this is great technology, and it could be really pivotal for what we want to do in the future.'"
A young developer named Ron Festejo put his hand up. Harrison says he then did two very brave things: "Firstly, he voluntarily cancelled the project was working on. He said he'd seen other games that day which were better than his own game, and he didn't feel he could be competitive.
"Then, he said he really wanted to work on EyeToy. So it was a question of, 'Ron, meet Richard, now off you go.'"
By all accounts, Harrison had a way of making things like this happen. "He had a fabulous gift for presentation. He was sort of like the Barack Obama of high tech," says Deering.
"He could explain complex things well and, having come from indie development, he was conscious of the lot in life developers face."
This might explain why he developed what became known as the Phil Harrison Stare. If you were given the Stare, you knew you were in trouble.
"Yeah. I don't know if I ever experienced his full wrath, but I've seen that glint in his eye," says Duncan.
"Every creative and developer in our company knew they had someone on their side who would stand up to the fluffy marketing idiots, who would make sure we were doing a great job and doing the games justice. He understood marketing as well, so that was a really dangerous combination. There was no hiding."
"People still hold a lot of respect for Phil and how straight down the line he was," notes Fargher. "He didn't dodge questions, no matter how difficult they were."
This made Harrison a favourite interviewee for games journalists, including me. And it was during an interview, years after I'd left Sony, that I found myself on the receiving end of the Phil Harrison Stare for the first time. I'd probably asked him something facetious about PS3. I can't remember the question, or his answer, but I can't forget the way he looked back at me with a gaze so icy it could have frozen lava.
"I'm not one for shouting and banging the table, but maybe I communicate my concerns in other ways," says Harrison. "But we were all in it together, we were all part of a team and we all wanted to be successful. I certainly didn't manage by fear." Everyone I talked to would agree with that.
They'd also agree that Chris Deering helped to foster the feeling of teamwork which existed within SCEE. He famously knew everyone's name and what their role was. And along with having a smart business brain, he's a man who knows how to party.
"The company had a 'work hard, play hard' mentality," says Harrison. "No one embodied that more than Chris Deering, the guy who would be last to leave the bar but always first in the office the next morning."
Everyone's got a Deering story. For many people it's the time he somehow got the bar of the Greenwich Industrial Park Holiday Inn to stay open till 3am, after what seemed like the whole company had gathered there following a Christmas party.
Some versions say Deering achieved this by making a single phone call, presumably to the boss of Holiday Inn himself. Others have him asking the bar staff to name their price. Many have him buying boxes of Grolsch and handing bottles round to the remaining stragglers even after the bar finally closed.
Not even Deering himself is sure of the real story. "I may have paid the staff a couple of hundred quid to stay on longer. It was pumped up a bit as some sort of magic trick, but it wasn't a big thing," he says.
I was at that after-party, stumbling round in a dress I'd never let a daughter of mine wear, trying to ponce a cigarette off someone. "Oi mate," I said, tapping some bloke on the shoulder. "Got a spare fag?"
The man turned round and I almost fell over. I'd been at Sony for less than a month and I'd just called the big boss man "mate".
"Aaaa," I think I said. "Sorry. Hello. My name is Ellie. I work in, er, Creative Services."
"I know who you are, my dear!" said Deering with a hearty chuckle. "Now then, let's see if we can't find you that cigarette." And with that he began wandering around the bar, asking everyone he met for a fag "for my new friend Ellie, here". (I've since given up, by the way, so if I die of lung cancer it won't be his fault.)
With this sort of thing happening quite a lot, it's no surprise that it was under Deering's watch Sony gained a reputation for being a bit rock and roll.
There were conferences in the South of France, Malta, Portugal and the Canary Islands. There were meetings which would take place in various glamorous locations over the course of several days. "I remember starting a meeting in a hot spring in Reykjavik, then next we were all drinking vodka in Red Square," says David Reeves. "And Chris Deering had a Russian hat on."
Then there were the parties. The ones held in warehouses and under arches and in car parks. The ones where Sony staff and invited guests got to enjoy live sets from the likes of Pulp, Macy Gray, The Foo Fighters, Faithless...
"It just went with the time," says David Wilson. "We were riding the crest of a wave of optimism about being part of the social media landscape and there were a lot of people talking about videogames being the new rock and roll. It was completely fitting with that."
The best and most ridiculous party was held in East London. It took place in a warehouse big enough to hold the indoor fairground Sony had ordered as well as a huge stage.
"Jamiroquai walked out wheeling this PS2 and a TV on a trolley, going on about how he didn't want to stop playing to do the gig. We were so in awe," says Daniel Brooke.
Despite being booked to play for 40 minutes, Jamiroquai went on to perform a two-hour set. At one point Ronnie Wood, whose son's events company had organised the event, joined Jay Kay on stage for an extensive jamming session.
"I heard later that all Jay Kay was told was he'd been booked to play this Sony gig. So he was expecting to walk out on stage to see a bunch of Japanese salesmen in suits and he was really worried," says Harrison.
"But just before he went on he snuck a look round the corner of the stage and saw what kind of audience it was, and he knew it was going to be a good night."
According to Harrison, the parties were part of a strategy to keep employees motivated and proud to work for PlayStation. "When times are good it's important to share that good feeling with the staff," he says.
"It did get a little bit out of control at one point, when we were doing launch parties for games pretty much every month. So we cut back on that. Not necessarily for financial reasons, more... Health."
For all the good times, the wild parties and the ever-increasing sales figures, there were bad days at Sony, too.
"I remember a day about a month before the launch of The Getaway," says Reeves. "We realised there were a lot of brand names being used in the game that probably should not have not been used. It was things like L'Oreal and Coke.
"We had to tell the producer he had to take them out. And he said, 'I can't take them out.'
"We said, 'Sorry, you have to.' That was a very intense period.
"I think it delayed the release of the game by about three weeks because they had to remove them or blur them, and it was a lot of work, and they had to go through QA again, and it had gotten to alpha and it was kind of a beta but it wasn't really... It was a very frantic period."
Most of the time, however, the bad days were caused by hardware issues. "We had a big supply problem. It's a high-class problem but it can be horrific, and it's very time consuming," says Deering.
David Reeves recalls an occasion when he received a call from Masaru Kato, today Sony's Chief Financial Officer, to tell him SCEE wouldn't be getting shipments in time for Christmas that year.
"So we hired a Russian company who had four Antonov aircraft, which in the old days were used for moving stuff in and out of Afghanistan - tanks and things like that," says Reeves. "We hired them to fly into Japan, pick up all the PlayStations and bring them into East Midlands airport.
"That saved us. But the following year was a bit hairy again because all the PlayStations on their way for Christmas got stuck in the Suez Canal."
Sony's supply issues weren't helped by the fact that machines were complex to manufacture. "There are thousands of components in a PS2," explains Harrison. "You can't ship a machine with a note saying, 'I.O.U. one graphics chip' or ' one three-cent capacitor'. If one piece of the supply chain falls over, the whole thing gets held up."
Deering says there were also problems with the chip yield that the factories were achieving in the early days of PS2. "You budget for 50 per cent yield. If you're lucky you get 60 per cent; if you're unlucky you get 40 per cent. We had a yield as low as 20 per cent for a couple of months, and it was a nightmare."
But those problems didn't last. By the time Sony was ready to launch its next machine PS2 had firmly established itself as the number one console, opened up gaming to a new audience and asserted PlayStation's status as a fashionable, market leading brand.
Then everything changed. Nintendo and Microsoft kicked off the new console cycle with radically improved hardware. This time around Sony had to play catch-up, and to convince consumers to buy a console with a much higher launch price.
Today, Sony puts global sales of PlayStation 3 at 41.6 million - so there's some way to go to beat PS2's record figure. Can PS3 even hope to match it?
"Yeah, I really hope so," says Alan Duncan. "But the business model's a bit different in a networked world. Selling as many boxes isn't the be-all and end-all any more."
Ray Maguire points out Sony has sold many more PS3 units at £199 and above than PS2 units at the same price. "We've got a long way to go, but most of the PS2 product we sold was sold at £150 or below," he says.
David Reeves agrees the price point is key, and believes reductions will tip the balance. "I saw a prediction recently that PS3 will probably have the highest installed base of all the next-gen consoles. I do think that will be true, eventually," he says.
"I think it can sell as many as PS2, maybe more," says Deering. "In the case of both PS1 and PS2, we sold more Slim units than original models. The PS3 Slim has only been out a couple of years.
"If you could get a PS3 for a hundred pounds... Can you imagine? It could go much higher and last longer."
Harrison sounds less optimistic. "I hope PS3 can match PS2, but I think the market dynamics are slightly different. It's much more competitive. For a large chunk of its life cycle PS2 didn't really have any competition anywhere in the world, so Sony was able to sell a huge number of units. If PS3 does reach the same level it will take longer and it will be a more difficult challenge."
Perhaps the final word should go to Chris Deering - the man who brought PlayStation to Europe, and who proved it was possible to be a market leader twice over.
"Ken Kutaragi is a genius, but he got a little bit unlucky with PS3. You can't be lucky enough to get three gold medals in a row."