TGS: Sony's Hirai Keynote - The Full Report

Kaz Hirai's keynote speech offered little in the way of announcements, however, some important if somewhat subtle points were made. The announcement of the DualShock 3 controller, which marries the motion control of the SIXAXIS with the the vibration control found on the PS1 and PS2. But more importantly, Hirai staked out a policy of improving Sony's relationship with its development and user bases, as well as stating definitively that the PS3 should be perceived first and foremost as a gaming platform, answering criticisms raised by Square Enix's president Yoichi Wada. The Business Of PlayStation When discussing the PlayStation business, Hirai said, "Definitely we have become one of the mainstream business operations in the entire world. I think we have made our contributions to the entertainment business in this regard. I would like to talk about some of the ideas we are having to further expand the PS business and how we can make our contribution to expand the industry as a whole." Moving forward with the improvement of the PlayStation business, "I've been telling people we have to come back to our basics at SCE so we can provide a lot more interesting games and entertainment opportunities. This has become the most important priority. I think with the PS3 we took a very important first step to move into the future of PlayStation, but... I would like to share some important ideas [on how to expand our PS business." Hirai briefly recapped the successes of the PS2 platform -- easy to forget in a world where the PS3 is struggling. Now entering its eighth year, the system has sold over 120 million units -- it made the goal of 100 million in six years. The PSP Charges On He then moved on to discuss the current state of the PSP. With only three million-sellers called out, the health of the platform has to be questioned. Midnight Club 3, Monster Hunter Portable 2 and Grand Theft Auto: Liberty City Stories have all surpassed the one million mark. "Going forward we would like to further reduce costs of PSP to increase the convenience. We need to further address the new definitions of games -- we're going to challenge these new initiatives at the same time." Moving on, Hirai discussed how the platform would evolve -- with the addition of peripherals like a camera, GPS, and (in Japan) announced a 1SEG TV tuner. "There is a strong demand for 1SEG broadcasting, to look at TV programs in realtime." Regarding adding functionality through software and peripherals, "This concept is going to be maintained going forward -- but we're going to have variations depending on each market... to meet with the true needs and wants of the local people. Easy access to [the PSP's optional non-game features] are going to be very important." At this point, Sony's Matsui came out to demonstrate the system's remote play capabilities alongside the PS3. Matsui said, "This functionality will be [enhanced] by further updates that will be available to you in the future." He then launched into a demo of the Japan-only PlayStation Network game Mainichi Issho while discussing the mechanics of the Remote Play service. "It frees you up from the location where you are able to enjoy the system. The combination of the remote play and content... you can use the PSP as a controller for your game or you can use the PSP as an additional screen for a more real experience game of PS3... you can use the voice recognition function of PSP. Any games that you are enjoying on PS3, you can have access to a multiple number of PSPs... so you can invite your friends. You will be able to transfer the data from the game you are playing onto your PSP so you can play while you're away from home." What You've Been Waiting For: PS3 Hirai now came to the PlayStation 3 portion of the presentation. As of August, the system has sold over 5 million units. "We did not see the leap in the sales of PS3 as we had hoped at the beginning," Hirai admitted. "We will be setting high priority to be sure we have enriched the software as well as the peripherals. The PS3 is the best Blu-ray Disc player as well, so we hope the PS3 will become the core of the home entertainment system. In order for us to further clarify the position of the PS3 as a game console we have announced very attractive titles at the E3 event in Los Angeles." Next, a trailer came up showcasing a variety of PS3 titles, none of which were new. Highlights include LittleBigPlanet, Final Fantasy XIII, Uncharted: Drake's Fortune, Final Fantasy Versus XIII, Gran Turismo 5 Prologue, Metal Gear Solid 4 and Shirokishi Monogatari. Regarding improving the PS3's software situation, Hirai said, "We hope that our partners will be able to create these wonderful titles. We will work to clear any problems they see in the development environment, and we will increase our cooperation in the marketing abilities..." He cited last week's Japanese launch of the Crisis Core Final Fantasy VII slim PSP as a good marketing synergy example. "As for the improvement of the development environment, this is something we have put a priority on. We have a program called PlayStation Edge which we are making available to the game developers. We have also tried to listen to the opinions of the title developers for the titles already released. We have a periodical meeting of an advisory board so we can hear the true feelings of the developers so we will be able to think of the solutions as quickly as possible. We also have different [methods] in place to increase the [capabilities of the development system] ... we will release [new development tools] in the most timely manner. Just two years ago we acquired SN Systems, which is a developer of tools so we will be able to show you the results of the acquisition very soon." "The second thing we will be doing is strengthening of first party development so that we can accelerate the development of software that will take advantage of the capabilities of PS3. We have sharing of assets and know-how of all development of teams around the world. We are also trying to bring together the talents that we have found outside of SCE. We are trying to gather that talent," Hirai suggested. "We have also purchased some studios in North American and Europe to strengthen our capabilities." Here, he recapped the acquisition of Evolution Studios and BigBig, the developers of MotorStorm, Pursuit Force and WRC. Without offering any suggestions on when it might occur, Hirai moved obliquely onto the price of the PS3. "This is something that SCE will have to do -- we will have to bring down the cost. This will be done by the further shrinkage of semiconductors and the reduction of components. It has always been the most important challenge to reduce the cost of the hardware." Finally, Hirai offered up a very important point -- as anyone who has developed a game for the system or followed the popular reaction in the past two years knows. "This is the most important point for us. This is to listen to the voices and requests of the users to make sure that we are able to absorb the voices and to utilize this in the development of our products. We would have to have a fair bit of strengthening of the relationship with our developers. At the same time we have to strengthen the ties of the relationship with the users of our software." Rumble, Network, Home Delay At this point, Hirai announced the DualShock 3 controller. "In the PS3 we have the SIXAXIS sensor... however the users had requested that we resurrect the vibration function to this sensor. At the beginning we thought this would be difficult technologically... however we have been able to overcome this difficulty so today we are proud to announce the DualShock 3 controller." The controller will be released in Japan in November and next Spring in the U.S. and Europe. There are ten DualShock 3 titles at TGS: Imabiki, G1 Jockey, Dynasty Warriors 6, Devil May Cry 4, Metal Gear Solid 4, Ratchet & Clank, Uncharted, Echochrome, Toy Home and Metal Gear Online. "As soon as the vibration function was added to our platform we had announced this to our partners, however there was very little time before TGS to give them a chance to add this function to their games," Hirai added. "As for existing titles, through the network you can enjoy updating so you can truly enjoy the vibration features." A huge number of titles were listed at this point -- some of which are not even out yet. Hirai moved on to discuss the PS3's network. "More than 2.7 million accounts -- the number of accounts is growing quite smoothly. We have to make sure that we can improve the services." Gran Turismo 5 Prologue "will be made available on the 13th of December." He then talked about the Japan-only Mainichi Issho, which offers news and friends functionalities to Japanese gamers in a very adorable package. "The power of the PS3, as well as the networking, by putting [these] together we can offer the realistic 3D virtualization of society -- what we call PlayStation Home. I'm sure you're expecting a lot... this was originally scheduled to be launched by the end of this year... it is going to be taking place in the springtime of next year." The reason for the delay? Hirai cited user feedback. A new service called Dress: Everybody's Fashion Entertainment will be added to Home, but there were no details. Japanese Statistics for the PlayStation Store were presented. 30 PS3 titles are available, 300 game add-ons, 100 PlayStation 1 download games and 90 demo movies. "The people are asking for a lot more convenience, so based upon this feedback so from now we are going to allow PC access for the PlayStation store. The PSP users can enjoy this service" by connecting a PSP to a PC. "We would like to continue this kind of effort going forward." Hirai then moved onto the future potential of PS3. "PS3 has the CELL and the CELL has excellent FPU power which is comparable to a supercomputer." He discussed Folding@Home, including how the PS3 is less prevalent than PC in the computational effort but produces more aggregate processing power. "This is going to be the backbone for us to produce realtime entertainment content. The computer entertainment industry is going to become more realistic -- there is no doubt about this going forward." This could perhaps be interpreted as a sly reference to the Wii's modest graphical capabilities. Hirai sewed it all up by reinforcing the direction of the company: "At SCE we have to come back to the basics, and we have to be able to explore the new ideas for the entertainment world. Wherever you are located you should be able to enjoy interactive entertainment and while you are at home you should be able to enjoy games with anybody in the world." Questions And Answers The keynote was followed by a brief Q&A session -- all questions were asked by a moderator, not by the audience. Whither the futures of the PS3? "We're going to try many things and in Japan, North America, Europe and Asian countries -- including, again, the number of titles... we're thinking about different marketing strategies. Moving toward the end of December we're going to become a lot more active so we can truly expand the units. Production units for this fiscal year are announced at 11 million units." He suggested that third party software will help the PS3 make this target. When it comes to a price drop, "To us price is a very important aspect, but at the same time the important matter is how we can further enrich the software titles. This is a driving strategy as far as we're concerned for our future growth. There is a possibility of [a price drop in the future.]" Hirai was then asked what he thinks of the success of the Wii as compared to the PS3 (the 360 never came up -- probably because we're in Japan.) "As far as I'm concerned -- we belong to the same industry, and I think we seem to be aiming at different targets. I think we are really good competitors. At the same time, there's no way that just one company can have everything. Through competition we can enrich ourselves. We have to be fresh, we have to be new, we have to go to the process of evolution all the time through competition." Finally the discussion turned to Home, where Hirai had plenty to say. "I've always said that I like to call it an interactive game -- something that has interactivity in my definition will be a game. I think that home is a new method or way to enjoy interactive entertainment. In the broad sense I call this a game as well." When it comes to whether or not Home is a new business model, "We have had a lot of discussion within the company and we are thinking about it a lot. We have had for a very long time a very traditional type of video games business model... however in this networked society I think we can have this new world called Home, that our users can enjoy, that we can also provide applications through Home's functionality. I think that there can be many business models." Hirai touched on Home's ability to support in-game advertising, and sales in a "virtual mall." "The more I think about it, the more I think there are a multitude of business chances that can be created not just for ourselves but our business partners as well. This will also open the door for non-game companies that have not had access in the past. We have been meeting with such non-game people... we have provided some of our ideas and we have also tried to listen to the ideas that they have to see what kind of advantage that there could be for these non-game people." When it comes to Home's delay, "We want this to be a worldwide service and at the same time we want to be sure we have functionality" for all territories. "We want to be sure we have a range of services for our users all over the world -- that's how we want to start the service. So we decided to delay the service launch date." When asked how Home is different from Second Life, Hirai stated the obvious -- it's on the standardized PS3 platform. He also said, "We want to make sure that this is somewhat of a controlled environment, instead of a lawless environment. We want to make sure that we have that level of comfort and security." Hirai closed by reiterating that he's adamant that the PS3 is an entertainment platform (contrast to last year's Kutaragi keynote, which flew sky-high on Folding@Home fumes.) "If we pursue too many directions people will keep asking us what the PS3 is -- the first purpose of the PS3 is interactive games."