Leo Lewis, Asia Business Correspondent
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As chief executive of Sony Sir Howard Stringer has several huge bets on the table: that the Playstation3 will flip from loss-maker to cash-cow, that the group’s sprawl of divisions can truly unite and that Blu Ray discs will not go the unhappy way of Betamax.
But putting Kazuo “Kaz” Hirai – a schmoozer from the music business - in charge of Sony Computer Entertainment (SCE) is perhaps his biggest gamble of all.
The logic goes like this. Sir Howard inherited a games division built from scratch and run buy an engineering genius – the “father of the Playstation”, Ken Kutaragi. But by the third generation of consoles, say veterans of the industry, Mr Kutaragi’s notoriously abrasive style was starting to irk the once loyal third-party games producers.
If the games division was to be a friend of both the outside world and the rest of Sony, and with the PS3 expected to have a lifespan of 10 years, Sir Howard judged that SCE needed more immediate steering not by a truculent tyrant of circuit boards and diodes, but by a slick relationship-builder with perfect spoken English.
Yesterday, just a week since officially replacing Kutaragi at the helm, it certainly appeared that Hirai had hit the ground running. The grand promise of 200 new games for the PS3 by next March was calculated to feed the impatient cravings of the games market, and send a blunt message to games developers: everyone is making software for our platform, and you should be too.
And as the Wii’s sales soar, will the price of the PS3 be lowered soon? He reveals only that, in common with any producer of goods, price is a constant concern: “I think about it every day just like I think about the relationship with Capcom, the relationship with EA and what I’m going to have for lunch. It’s what I do. Yes we are looking at it,”
What he would also not say – and what so concerns the analysts - is how many of those prospective 200 games will also be appearing on Microsoft’s Xbox360 and Nintendo’s hot-selling Wii. Exclusivity, which used to come as standard for the market-dominant PS2, is a dying expectation for Sony.
“Obviously the publishers, because they have limited resources financially have to start looking realistically how they are going to manage make the right kind of return on investment. It is natural that more and more titles become non-exlcusive,” said Mr Hirai, subsequently admitting that there was “room for improvement” in SCE’s relationships with the games developers. “The dialogues with them should come sooner rather than later,” he added.
Hirai can also talk the talk when it comes to whetting the appetites of gamers. Future games for the PS3, he told The Times, will not only exploit the machine’s capacity (far greater than the Microsoft or Nintendo consoles) for massive online interaction, but will also take advantage of the ability to link thousands of PS3 units to form a supercomputing “grid”. That sort of combined power, hinted Hirai, could give games the capacity to incorporate real-time, real-world environments. Massive “server farms” might also be introduced as a resource to expand the gaming experience, he said.
But for all the envisioning of online gaming, downloadable content and Sony’s belated embrace of web 2.0, Hirai appears strangely attached to the physical presence of games. Discs, he contends, are not going anywhere.
“I’m going to get on my soapbox. Downloading a game is fine, but there is a reason we go to a bookstore. You go there - people may not buy anything - but it’s entertainment in itself… otherwise you wouldn’t go to a bookshop. There is also pride of ownership. Why buy a book? There are some you want to have because you want to have them. That applies to software. That emotional attachment is always going to be with us. There is always going to be disc-based media,” he said.
It is a sentiment that appears to jar somewhat with Sony’s wider rush to catch up with Apple as a leader in the delivery online music content, and Sir Howard’s apparent confidence that Sony’s Hollywood studio will give it a head-start as movie content is sucked in the same direction as music was by the iPod.
Sir Howard’s huge gamble on Hirai is that SCE can, so early in the PS3 cycle, do without that critical Kutaragi combination of visionary and engineer. Has the schmoozing, in other words, begun too soon?
Also surprising is that Hirai – an executive supposedly promoted for his “Sony United” credentials and loyalty to Sir Howard’s internal silo-smashing programme within the group - is not yet ready to sell the farm on SCE’s independence. It was an independence belligerently defended in the Kutaragi era.
He accepts that the games division cannot do things completely on its own, and is usefully joined to the rest of Sony “at the hip”.
“At same time though that is different from saying that whatever it is that different divisions of Sony want us to do, we do,” he says, “we have been successful because we have been an independent company that has been allowed to fundamentally manage the computer entertainment business autonomously and independently of other Sony divisions. We are uniquely positioned…we need to be able to chart our own course.”
Hirai is also closely attached to Kutaragi’s parting shot – delivered at a leaving party last week to the SCE staff in Tokyo. “Don’t think that the Playstation is something you own,” said the man who invented it, “the PS belongs to all its users everywhere in the world”.
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