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June 8, 2011 at 5:56 PM

E3 Q&A: Sony exec on Vita, Wii U and Kinect’s hardcore push

LOS ANGELES — Sony still believes there’s a big market for handheld gaming devices like the PlayStation Vita that it launched at the Electronic Entertainment Expo, despite the surging growth of smartphones and tablet devices that run games.

That’s according to John Koller, director of hardware marketing for Sony Computer Entertainment America.

Koller also weighed in on Nintendo’s Wii U, Microsoft pitching Kinect to hardcore gamers and the state of the industry during an interview at E3. Here’s an edited transcript.

Q: April’s NPD report suggested the game industry had rebounded. Was that an anomaly or is the industry growing again?

A: We view gaming as back and growing there’s a lot of reasons for it. We talked last year about the new technologies that are coming into play whether its motion, 3D, new gaming content that’s coming and expanding the idea of what gaming is. At this stage of the lifecycle, it’s surpassed last lifecycle in terms of total units sold – on aggregate, not just PlayStation.

Q: There have been questions about the wisdom of launching the Vita when there’s so much growth in smartphones and tablet devices that run games. What is the market going to be like for a dedicated handheld game player over the next few years?

A: We see an absolute market for handheld gaming. There are deeper, richer experiences that are only possible on something like a PlayStation Vita. The connection to the console is a really critical part of that, but also the ability to interact with the world around you. We spend 80 percent of our time outside the home. We need to make sure the portable portion of our strategy is significant. Being able to connect with the PS3 through Vita allows us to have the entire ecosystem in play at any given time.

Q: Will you be able to do voice messaging on Vita, via its AT&T 3G service?

A: We’re exploring. There’s nothing on a telephony basis but there are certainly opportunities to be able to chat. We announced the “party” app during the press conference. Communication is so critical for this … Vita’s designed to be social, to be connected.

Q: You’ve got a relationship with Google now, could Vita use one of its services such as Google Talk?

A: There are a lot of opportunities.

Q: How is your business doing generally?

A: We’ve been really messaging two key things. First, evolution. If you look at five or six short years ago we were a two platform company. Now we’re close to five if you include PlayStation network (in addition to PlayStation 2, PlayStation 3, PlayStation Portable and Vita). It’s an evolved company, we’re a digitally connected company.

The second thing – innovation. It really goes into where Vita will be and where we see PS3 going. There’s a lot of headroom on both of those platforms to really innovate.

Q: Will you reduce the number of platforms, to make life easier for game developers?

A: There’s still life left in all of those so there’s no shutting any of them down at this point.

We’re going to keep the PSP in market after the Vita launches. We still see life in it because of the development spigot. That said, Vita will get significant development dollars. When you talk about publishers and the pot of dollars they have in the middle of the table to be able to allocate to all the platforms in the industry, we certainly think we’re going to get our share.

Q: Will the PSP price come down?

A: There are no plans. We just dropped the price to $129 in February in North America.

Q: How about a PS3 price cut?

A: No plans on that front either.

Q: Does Sony finally have its stuff together now on the network security side?

A: We’re back and we’re more secure than ever. Ultimately it’s about our consumers. This is a digitally connected company, our products are digitally connected, there’s no going back …. This is for us as important as anything we do and the consumers that have been coming back in droves have been so important to us and the emphasis to us is they continue to feel secure and the security we’ve implemented will allow them to feel that way.

Q: I saw your demo of “Ruin,” a game that can be played on both Vita and PS3, with progress saved online so you can pick up where you left off on either machine. How soon will that be a standard feature on your platforms?

A: This is a big idea. This doesn’t exist in the market today but it will exist when PlayStation Vita launches. They need to buy a game on each platform – that’s important to note.

Q: How about linking games on the PC and Android?

A: Right now we’re focusing on PS3 and Vita. The handshake that the two platforms have allows us to do that.

Q: At CES, I heard Sony talking about offering cable TV services through its TVs and set-top boxes. I expected to hear about that capability on the PS3. Did the network breach hold that feature back?

A: There’s nothing tactically to announce but strategically that the idea of cutting the cable cord and allowing the PS3 platform to be that device in the living room is important. I think you’ve seen leading into our strategy with the various streaming services we have – the Hulus and the Netflixes and the Vudus – and MLB and NHL. The idea of allowing our consumer who increasingly is reliant on a Hulu or a Netflix and says ‘I don’t need my cable box, I’m good, I can rely on my PS3’ is important. So I think you’re going to see the consumer gravitate more and more over the next two years toward these services.

Q: So Sony’s partnership adding Time Warner cable service to Bravia TVs doesn’t include the PS3?

A: Nothing to announce at this point but strategically those are things that are interesting to us.

Q: Did the network outage delay this coming to PS3?

A: It’s not because of the network service issue that we did not announce certain things. We’re putting together the tactical elements of our broader HD streaming strategy as we see the market evolving. As we see that market evolving, as we see that consumer migrating to those types of services, we’ll add them.

Q: Do you have enough capability in the PS3 platform to make it through the rest of your cycle?

A: The way that we’ve always viewed the ps3 is it’s at least a 10 year product for us. We’ve always said we’ll turn off a console when a development cycle turns off. We’re nowhere near that.

Q: What do you think of Nintendo’s Wii U?

A: Very interesting announcement. We all view the market in similar ways and in different ways and that’s what makes this industry unique. They’ve viewed this as an extension of their console and the way that they can compete with the PS3 and the Xbox 360 and get more core consumers into the market. Our view on the PS3 has always been that we’re a ubiquitous platform, we offer something for everyone. I think Nintendo’s challenge is going to be that they’re going to be looking to bring in that core consumer.

Q: How will you respond next year when Wii U arrives?

A: We don’t react to other competitors moves per se. We do believe that our content strategy – whether on the game side or multifunctional entertainment side – drives significant sales to the PS3. It’s still an uber-powerful system and will have capabilities that are going to be market leading in 2012 and 2013. We’re really bullish on the PS3 over the next several years.

Q: Will you cut prices to compete with Wii U?

A: There’s nothing to announce on price. We continue to look at product as important as anything – we talk about content and the streaming and Blu-ray and 3D and Move. We really think that content is driving adoption. It’s easy for analysts to say lets pull the price card out. We want to continue to be able to drive the valuation of the system as the first and foremost proposition.

Q: Do you think Microsoft’s Kinect announcements will draw hardcore gamers to Kinect?

A: They have made very strong strategic push into the family area since launch. Their move into the core is maybe a bit of a left turn in terms of the strategy that they’ve employed since launch. For us, we feel really secure about where Move is in that respect because we already have the core – Killzone, Socom, these (Move) titles have been big sellers for us and the usability with Move is integrated very nicely with the Sharpshooter peripheral we have. The others are playing a bit of catch-up trying to get to that consumer.

Q: Why are you making a PlayStation TV set – the $499, 24-inch 3D set unveiled Monday.

Are you going to have more sizes, or is it a one-off experiment?

A: PlayStation views 3D as critical so you’ve seen that through a lot of our marketing, you’re going to see that through product innovation. It’s a 3D entertainment monitor – that’s what we’re calling it. We saw a market need at that size. There are a lot of smaller apartments, dorm rooms, second bedrooms that we think this could really fit in perfectly with.

Q: Is there a TV tuner inside?

A: No, you can attach you r cable box so it functions like a TV.

Q: I wonder if it’s an experiment, working toward putting the whole game system inside a monitor when you release the next PlayStation?

A: It’s not a tech demo. We really do see a need in the market and knew that if no one else was going to do it we wanted to. For really what’s a key part of our demographic – colleges and second bedrooms – were seeing a lot more growth of PS3’s in those two areas. That was really important for us strategically.

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