May 7, 2008

Sony President Says PlayStation Will Reclaim Lead

Kaz Hirai, president of Sony Computer Entertainment, believes the PlayStation 3 will be the leading console and will help Sony reclaim its position as the leading games console maker.

Hirai said the PS3 would overhaul rivals Nintendo and Microsoft within its 10-year lifecycle.

PlayStation 3 sales in Europe have passed those of Microsoft Xbox 360, but North American sales continue to lag behind.

Globally, Nintendo's Wii console is the number one next-generation machine. Sony is engaged in a "marathon" race with Nintendo and Microsoft, Hirai said.

More than 10.5 million PlayStation 3s were sold worldwide by the end of 2007. To date, more than five million PS3s have been sold in Europe.

Currently, Nintendo has shipped more than 25 million Wiis worldwide. Microsoft reported 19 million 360s shipped by the same period.

Both companies have reported production supply problems.

"We've only really begun to scratch the surface with PlayStation 3 but I am confident that given the long life-cycle we have planned for the machine we are going to have a very good install base in all of the major territories," said Hirai.

"After the 10-year lifecycle we will have the install base that we are looking for and that is obviously to be in the leadership position," he added.

Hirai said that while new PlayStation hardware had been introduced five years into the lifecycle of the last two generations of machines, it was difficult to predict when a new PlayStation platform would emerge.

"It's very difficult to say at this point in time. We need to take a look at advances in technology in various areas, such as semiconductors, graphics chips, output devices, mainly TV and monitors, to see where we would like to benchmark our next generation product," said Hirai.

He believes Sony's investment in future console hardware technology remained important.

"We look at this business as a 10-year lifecycle. We don't let our consoles go by the wayside after five years."

Hirai said that by managing the portfolios of the current consoles"”PlayStation 2, PlayStation Portable and PlayStation 3"”they are better able to look at the business in totality.

He also said Sony had begun investigation of pure network gaming without the need for a dedicated console, but that network gaming is "also dependent on the network infrastructure available in all the territories we do business in".

"Some have faster broadband access than others. When you consider that content that plays on PlayStation 3 can go as high as 50GB it's going to be very difficult to deliver 50GB to consumers in some parts of the world in a timely fashion," he said.

He also said because of these limitations, Blu-ray discs remained the better and more efficient way to deliver content.

Sales of PlayStation 3 would continue to be driven by games and by the line-up of titles this year, he added.

"If you look at the line-up coming out this year - Metal Gear Solid 4, Resistance 2, Motorstorm: Pacific Rift , Little Big Planet, there is a whole raft of titles between now and the end of the year which will really help fuel growth of the install base."

Hirai said the launch of the PlayStation 3 was not without its problems.

"We had some challenges when we launched the PlayStation 3 in major territories. We were not able to supply North America and Japan with enough units," he said.

There was also some concern in the media and from customers about the lack of titles available at launch.

"That situation has been remedied to the satisfaction of consumers. The software line-up is looking good for this year and certainly for the holiday period," said Hirai.

Technology inside the PlayStation 3 had been a steep learning curve for developers.

"I think they are beginning to embrace the technology and are able to express their creativity on the platform certainly more than they were able to at launch."


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