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Sony's David Reeves Interview
PlayStation 3 PlayStation 2 PSP Interview by Ellie Gibson
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Yesterday Sony published figures for the last three months of 2008. They revealed sales of all three consoles were down year-on-year, with only PS3 software showing an increase. Bad news for Sony, you might think - but David Reeves would disagree.
We sat down with the Sony Computer Entertainment Europe boss to ask why he's happy with the figures, and who he believes is winning the console battle. Plus, when we can expect a price cut, what's next for PSP and whether Sony has started work on PlayStation 4.
Eurogamer: What's your reaction to the Q3 financial figures?
David Reeves: On PS3, the target is still 10 million sell-in. PS3 was the number one priority, and the Corporation is going to meet that target. We're very happy about it overall.
PSP was not hit so much by demand, but by economic factors. I can only talk specifically about Europe, but we've lost volume in Russia. A lot of retailers there have been sucked up by oligarchs, and they didn't have the financial support. They were not able to buy in the product, even though the demand was there.
Also unemployment has rocketed in Spain, and to some extent in Italy. The demand was not there. Not just for us - for Nintendo or Microsoft, it's exactly the same.
Eurogamer: Why do you think sales of PS3 have fallen year-on-year?
David Reeves: We've said it would be 10 million, and it is 10 million. We had a price decrease in the previous year, and we didn't have a price decrease this year. Xbox 360 did, and Nintendo was already quite low.
The plan wasn't necessarily to hit sales, it was to hit a profit target - to do better than break even in Q3. The financial results show a break even in Q3 for Sony Computer Entertainment worldwide. So rather than then going for market share and sales, we went for profit, at least to break even.
"Xbox 360 is not ahead by a million units... Our installed base now is very close to 8.5 million units in PAL territories. Our numbers show we are absolutely neck-and-neck."
Eurogamer: But the fact is PS3 sales fell year-on-year. Do you think the console might have peaked?
David Reeves: Absolutely not. We're two-and-a-half years into a ten-year cycle. For October, November and December we were in a holding pattern, especially with the pricing. We had to demonstrate we could make a profit with the business model, and that's what we've done.
Eurogamer: In an interview with us in July 2007, you predicted that PS3 would be "far and away the winner" by March 2008...
David Reeves: In March 2008, we were a long way ahead of Microsoft. We launched PS3 six months later [in Europe] than the US, we launched 18 months later than Xbox 360 and we were beating Microsoft in terms of installed base - so that came true.
Eurogamer: How about now? According to NPD, Xbox 360 outsold PS3 2-to-1 in the US last month. Microsoft is claiming to be ahead by 1 million units in Europe. Can you really say Sony is the winner?
David Reeves: I don't want to talk about the competition too much, but Xbox 360 is not ahead by a million units. We sold through 500,000 PS3s in November. We sold through 1.1 million units in December. Our installed base now is very close to 8.5 million units in PAL territories. Our numbers show we are absolutely neck-and-neck.
What happened was, we overtook them, and they dropped the price. It's almost as if we've gone ten rounds as Mohammed Ali and we're still standing, because we didn't drop the price. We held firm.
Now, going into the remaining rounds and the next seven years, we are going to be very strong. The last few weeks have shown we are clearly number two in the market. I'm as confident as I was before.
Eurogamer: Sony Computer Entertainment boss Kaz Hirai was recently quoted as saying the Xbox 360 "lacks longevity". Do you agree?
David Reeves: I'm not going to comment on that. I simply don't know what their plans are. I'm not going to be as arrogant as to comment on either Nintendo or Xbox 360.
"I simply don't know what their plans are. I'm not going to be as arrogant as to comment on either Nintendo or Xbox 360."
Eurogamer: Do you think what Kaz Hirai said was arrogant?
David Reeves: I don't think so. He was probably misquoted, because I don't think Kaz would say that.
Eurogamer: He also said Sony still has "official leadership" of the industry. Isn't it really about who's shifting the most boxes? Doesn't that sound a bit arrogant?
David Reeves: I look at it differently. In the videogames industry, we've all been winners for the last two years. We've had more people coming in who have never played games before. The industry is not recession-proof, but it has done extremely well.
Eurogamer: But there are more and more stories about people being made redundant and studios being shut down. Just today, for example, Kuju has announced impending redundancies. Is the industry really doing well when people are losing their jobs and studios are shutting down?
David Reeves: It's a function of the economic situation that you are going to find people who are resilient, who do not play with their pricing, who are very efficient. Those people in that particular studio, they don't have a job, but I think in a few weeks you'll find them housed in other studios.
Of course there are going to be some people who fold. But the videogames industry is inherently very healthy. It's not a question of survival of the fittest, it's the survival of people who are professional, and don't just go around cutting their prices and destroying the market.
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It's the recession innit so people don't want to be spending £300 on a games console when they can pay half the price for a competitor's system and play 90% of the same games on it. It's as simple as that.
Sony need to drop the PS3 to below the "magic" £200 price point if they want sales to pick up. In the current economic climate it doesn't really make much sense to be selling your console at twice the price of your competitors. Sony need to be more competitive even if it means taking losses in the short term. |
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Sometimes, it's really like Ellie takes the questions out of my head and asks them. She's like a psychic Paxman with nicer hair.
Also, "Heavy Rain is a good example. That will be, de facto, an exclusive; we haven't just given them a paper bag full of cash, we've built up a solid, long-term relationship." So now it's a CONFIRMED FACT- They gave Konami a paper bag full of cash to keep MGS4 exclusive* *May be a complete lie I made up based on twisting his words
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superjag86
30/01/09 @ 14:38
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Yeah really good interview - especially liked the question on why it costs more for a download than it does for a retail copy, shame Reeves skipped the question though...
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Get Ellie to do the next Age of Conan interview please kthxbye
David Reeves: It's still possible, but it's going to be later rather than sooner. Eurogamer: Not this year, then? David Reeves: No, I'm not saying that. You didn't give me your timeline - whether it's minutes, weeks, months or years... Eurogamer: Is it minutes, weeks, months or years? David Reeves: There is no timeframe. LAWL
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most recently on 30/01/09 @ 14:41
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YobRenoops
30/01/09 @ 14:41
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Why did you ask him questions in relation the US/NPD figures? That makes no sense. He's here for Europe where things are much closer. That's just ridiculous.
I'm going to ask the Sony US man about the Sony Japan figures in how the consoles doing in the US? Get a clue! And they've never grilled Microsoft like this. |
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YobRenoops
30/01/09 @ 14:46
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I should point out, other than that wrong use of the statistics, it was a good interview. Asking the hard questions, even if the guy dodges them, is most welcome. I'd like to see the same with Nintendo ("Why are most of your games wank and the VC criminally missing some console classics? Are you going to update the Mii channel? Or Update anything?!) and Microsoft (Whats the fail rate now? When can we guarantee Jaspers for everyone? How much is exclusivity costing you?) for a good new years grilling.
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solidSnake04
30/01/09 @ 14:48
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brilliant. i look forward to some MS comments or MS execs interviews.
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Thunderbolt!
30/01/09 @ 14:50
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I imagine it must be quite uncomfortable at Sony right now as they are not used to losing.
Last year I could think of £300 of a reasonable price however this year its a fortune. |
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Economic recession in the world, right? Still, didn't the MS X360 division post a profit? (Wii division surely did.)
This guy seems to be Sony's Prime BS Guy That Can Still Look Sensible. He was asked about numbers GTA4 sales in the US. He ignored that and went on to talk about sales in Europe. He didn't give any figures. Can we get the figures and view them alongside what he said? He was also just talking out of his backend about iTunes and boxed products. Boxed products 'normally' lift up the price of the comparable digital version. Not the other way around. But there are people who come in having done their research, thinking, 'PS3 has got all the games, it's free to go online, it's got a Blu-ray player. I know I'm not going to have to ring up the customer careline saying I've got three red lights.' Right. If I had done the research I would probably just go for a PC. PS3 does not have all the games, the PS3 game library is smaller than the X360's - fact. However, there are many good recent multi-platform games. Free online. Good. Blu-Ray player. Good. If I was interested in Blu-Ray movies and if I had a HD TV. Which would probably be unlikely with the groups of people he pointed out in the start of the article. He also takes a cheapshot at the X360. Anyone with any knowledge would know that the RROD problems are now quite alot fewer and far between, especially with the new Jasper machines. Someone who would ahve done their research, as he puts it, would also know that.
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"But there are people who come in having done their research, thinking, 'PS3 has got all the games, it's free to go online, it's got a Blu-ray player. I know I'm not going to have to ring up the customer careline saying I've got three red lights.'
But I WILL have to call them if I get a the ol' blinking yellow/red light combo... |
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good interview, but on that Game store question... Consumers are idiots and they don't research shit, they go in an buy either the Wii, because their kids/mates have it and they want it. or the Xbox because it's cheap and has all the games anyway. (well, apart from a couple that is). Just today I had a colleague at work banging on about that he bought a PS3 for his son (who turns 6 in a couple of weeks... yeah). this bloke thinks he's always right but when I told him that the PS3 had no backward compatibility he turned slightly purple... hm, that's the research out the window then ey.
Sony have to lower the price, otherwise they are not going to break even anytime soon, or make a profit. |
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designerheadache
30/01/09 @ 14:57
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Good interview, Ellie gave ol' Reeves a bit of a grilling and he held his own pretty well considering.
To be honest, i think sony (europe at least) are happy with their progress, and while not as great as their competitors the number 1 aim in business is to turn a profit and have a solid business model which they seem to be achieving, Obviously once this financial year is over, and they are profitable, you can expect them to start upping the pressure on their competitors. Also he didn't act like a twat as i have become so accustomed to all the consoles execs acting, so +100 points. actually i am surprised i just wrote all that... times must be changing indeed! |
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That was pretty good, and some decent questions that I think have been swirling round many people's heads of late. But there was too much evasion, when he disagreed with quoted figures he (or the PR person with him) didn't counter with any figures from Sony, and there were a couple of answers that were absolute bollocks. The comment about 'hearing' someone in Game buying a PS3 'because it has Home on it and I've heard of that' - rubbish. Doesn't sound even slightly believable. Also the answer about the iPhone - that didn't make sense at all.
But generally OK. |
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"You talked about people going into stores - I've heard people in GAME say, "But this one's got Home. I've heard of that, I'll buy that." I don't know how many people buy PS3 because of Home, but I'd like to think it's a lot."
I seriously doubt anyone would buy a PS3 for home. Nice interview though, pretty civilized altogether. Would have liked more of a kicking on PSN or it's lacking support here though.
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crispyduckman
30/01/09 @ 15:14
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"I don't know how many people buy PS3 because of Home, but I'd like to think there's a lot of barefaced moronic suckers in the world."
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"Straws! Lovely straws! How short and slightly out of reach you are! Yet, grab at them I must!"
Sony do still have some arguments on PS3 - yes, it's more powerful and yes it plays Blu-Ray. But how many people who don't read Eurogamer every day know about the red ring of death? Microsoft have done an amazing job of keeping that PR disaster quiet. In the meantime, Sony did far too little, far too late to make their latest console a success and now they might be living on borrowed time. |
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local_celebrity
30/01/09 @ 15:24
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Sony's steadfast refusal to drop the price of the PS3 is insane. They're like a kamikaze pilot, flying to their doom.
I said this before, and I'll say it again. Reduce the price to £200 and I will buy. And so will millions of others. Carry on down this path, and you'll end up as the next Matsui. Or even the new Amstrad. With people getting shitcanned left, right and centre, you'd have to mentally ill not to drop the price. |
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Kenshin001
30/01/09 @ 15:26
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I've said this before but it goes ignored everytime, next time EG have an interview with a Sony exec please give us prior warning. I'm sure there are a lot of questions PS3/PSP owners want answered and most of them have little to do with console wars shit. Would like to see the distinct lack of communication with SCEE addressed for a start. PSN cards? Games on US store, not on the Euro store? Virtual region locking of Home? That interview told me little.
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canIdoyabombsforya
30/01/09 @ 15:32
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but we've got blu ray and free online.................
but we've got blu ray and free online................. but we've got blu ray and free online................. but we've got blu ray and free online................. but we've got blu ray and free online................. |
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Sony's refusal to drop the price to GBP200/€300 really surprises me. They invest serious money in games like KZ2 and LBP but then hinder proper sales of those titles by building a wall in front of their potential customers - the current price of the system simply doesn't work. It must be extremely frustrating for devs like Guerilla to release a game that many people won't be able to buy/play because Sony refuses to do now what they're sooner or later will have to do anyway.
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"Spekingur, someone who did their research would merely have a look at the RROD thread on the forums here to know the problem is still prevalent."
Err...no. It's hardly as active as it used to be and remains mostly dormant. You should ask psycho as he's the only one that keeps a cross forum record of all machines declared dead. |
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Thunderbolt!
30/01/09 @ 15:38
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Hey Evil,
'I like the fact that Sony gain exclusives by good relations rather than cash. unlike some other company.' Yes, I see what you mean, I consider the Kaz interview the epitome of good relations. LOL "We don't provide the 'easy to program for' console that [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is what do you do for the rest of the nine-and-a-half years?" explained Hirai. |
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kangarootoo
30/01/09 @ 15:39
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"But how many people who don't read Eurogamer every day know about the red ring of death?"
Well, 60% of customers in the first year as I read it (I own a 360 - my third - and like it very much, so don't let your head explode). Anyway, good interview I thought. Some tough questions, met with some relatively candid answers (quite honet commentary about console pricing and not being able to afford some paid-for exclusives). No doubt this thread will decend into childish nonsense, and then we will wonder why interviewees in the future aren't as frank. |
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kangarootoo
30/01/09 @ 15:39
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"Could Eurogamer be anymore hostile !!! Wow"
Nothing wrong with strong questioning, so long as it is applied evenly to all comers. |
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kangarootoo
30/01/09 @ 15:40
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"Xerx3s, next you'll be telling me that the rate of failures is acceptable..."
Thats just a strawman. The initial failure rate WAS unacceptable. The current failure rate is NOW much reduced. |
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I have to say I really cant see the PS3 being a 10 year machine TBH. Unless they mean that it will be around for that long and co exist with the next Sony console whenever that may be released.
I guess if we are to believe all this about it being practically untapped in terms of power then perhaps it could be but I dont really see any evidence of that right now. Its a great machine and Im glad Ive got one but Im not convinced its got any more metal than my 360. We'll see I guess but I wont hold my breath........ |
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that was a decent read. its good but did feel the questions was well tough he would say 1 thing then next question would question him on what he said seconds before like about K.H being ignorant .
and another thing i noticed was he wasnt securing anything down with dates which should keep the hype train from speeding up again. and anything he didnt know he didnt know which was nice he didnt make up stuff or fact or dates for it he was honest he was very fair in my veiw he did have small pops at MS red light comment was in there but then again thats a fact you can comment on because it is true didnt seem to go over the top. i think coming months ps3 may just improve a tiny bit more im still happy with my machine and the way it's run then again im 1 of very few ps3 owners that doesn't demand way to much or get sucked into the hype of everything. nice read it was tough but the questions were what we all needed to hear and he answered them very honest and very mature. nice 1 ellie. |
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