Yesterday, Sony shook up the console wars by announcing a cheaper, slimmer PlayStation 3 at the GamesCom expo in Cologne, Germany. Now costing just $299 (US), €299 (EU), and £249 (UK), the 120GB machine is cheaper than the 120GB Xbox 360 Elite, which did not--as many expected--see its $399 price slashed at Microsoft's GamesCom event. (Instead, the big announcement was for Fable III's 2010 launch.)
The PS3 Slim announcement is the culmination of several months of Sony initiatives, which also include the announcement of and preparations for the October 1 launch of the 16GB PSP Go. That date will also see the long-awaited release of Gran Turismo for the PSP and the debut of PSP Minis, a new online store offering "snackable" casual and arcade titles for a low price.
Leading Sony's push to reinvigorate its flagging hardware sales is John Koller, the director of hardware marketing at Sony Computer Entertainment America. The youthful executive was the company's point man during April's $99 PlayStation 2 price drop, when he also revealed the first hints of Sony's big PSP push for the year. Koller also starred in the PSP Go's video introduction, which leaked just before the handheld's official unveiling at the Electronic Entertainment Expo in June.
With the reverberations of the PS3 Slim still ringing in the industry's ears, GameSpot spoke with Koller about the major--though not exactly shocking--announcement and how the PSP Go launch is shaping up.
ENTER THE PS3 SLIM
GameSpot: What has allowed you to drop the price right now?
John Koller: That's a good question. We have really modeled this since we launched the PlayStation 3. We've been working behind the scenes to make sure we present the right price point and the right model at the right time to the right consumer. And this is the right time to do it. We look at the consumer who is likely to purchase this holiday--one who's a little more price-sensitive. That consumer is now in line for a much more accessible price. For holiday-friendly, gift-giver consumers, that's much more in their wheelhouse. So when you look at the total amount of content, it's the best lineup we've ever had on the PlayStation 3. There's Uncharted 2 and God of War III, and you've got the third parties with things like Assassin's Creed II. When you marry that with the Blu-ray launches from our [Sony movie] studio partners, this really was the time.
GS: Now a few weeks back, Sony Corp. CFO Nobuyuki Oneda said you have reduced PS3 manufacturing costs by 70 percent. Apply that figure to estimates from manufacturing research firm iSuppli, and the production price of the PS3 is just $252. That begs the question--is the PS3 profitable, in terms of hardware now?
JK: Well, we aren't giving any figures on that just yet. I can tell you that the model we've announced is more cost-efficient. That's been a directive from Sony Corp.
GS: I can imagine. So is the sales target for Sony's fiscal year ending March 31, 2010 still 13 million, as was announced during Sony's last financial report?
JK: Yes. That estimate was made with the full knowledge the PS3 would see a price drop.
GS: Now during the GameCom press briefing, [Sony Computer Entertainment CEO] Kaz Hirai said that the PS3 Slim will have all the same features as the "PSP Fat," for lack of a better term. Is that the case?
JK: Well, there are a few changes, but the feature set is the same. The changes are more internal, and from an internal standpoint, there are three big changes. The cell chip [manufacturing process] has decreased from a 65nm to 45nm. There's a new cooling system, and there's a new power supply that uses one-third less power.
GS: Does it still have the hard drive bay, which lets you switch out the hard drive?
JK: That's absolutely still a big part of it, and we actively encourage consumers to do that. If they want to upgrade, it does not void their warranty. But the bay has moved from the side to the front, so it's under the disc loader now. It's still a simple two-screw process to take it out; it's easy to put a 1TB hard drive in there in place of the 120GB drive.
GS: So now, with the 120GB hard drive and $299 price point, you guys are going head-to-head with Microsoft, even if it cuts the Xbox 360 Elite to $299.
JK: Exactly, exactly. If you look at the value proposition of the PS3, we feel really good about our position. If you look at the Blu-ray, the built-in Wi-Fi, the content, you can stack it up and the $299 price point is a really big thing for us. I also think it's a really big thing for consumers, when they ask themselves, "Should I get a PS3, should I get a 360, or should I get a Wii?"
GS: How long do you expect the stocks of current 80GB PS3s to stick around, given that a newer form factor with 40GB more hard drive space is just two weeks away? Do you expect them to be gone when September 1st rolls around?
JK: I expect them to be mostly cleared out. We've very successfully presented a clean landing for the 120GB SKU. The 80GB is on its last inventory run right now, and the 160GB Uncharted bundle was, by definition, a limited edition, so that will be gone very shortly as well.
GS: And when does the PS3 3.0 firmware update go live?
JK: Shortly. Very, very shortly. We haven't announced a date, but it's imminent. The big news on that is the "What's New" page. It's basically a welcome board for the consumer coming in. It's a place for us to promote our products and partnerships. It's a lot easier to access.
For a full rundown of the PS3 firmware update, watch this video presentation by Eric Lempel, the director of PlayStation Network operations
COUNTDOWN TO THE PSP GO LAUNCH
GS: Now I have some PSP questions. There's a little bit of confusion going on from the press conference, where it was announced that the PSP version of Gran Turismo will be free if you register it between October 1 and October 10. It was also announced there that anyone preordering Gran Turismo 5 would be able to download Gran Turismo for the PSP. Is that accurate?
JK: No, it's not. That's a special promotion for European territories. In North America, we have the core PSP Go unit launching without Gran Turismo. Gran Turismo will be a stand-alone sale.
GS: And the Gran Turismo 5 deal?
JK: Again, that's a European initiative. That's not happening in North America.
GS: OK. Now let's look ahead to the PSP Go launch. Let's say I am a current PSP owner who wants to upgrade to the PSP Go, but I own a ton of games on UMD I can't use with the new model. Sony has said it is going to offer digital versions of UMD games in current PSP owners' libraries. How is that going to work?
JK: We're still looking at options in that regard. We haven't announced anything. We do see, obviously, the value that our legacy consumers bring to the table, but we haven't put a public plan in place for viewing yet. So, more to come on that.
GS: Well, will every single PSP game be available for download at launch then?
JK: We're currently working with all developers and publishers on this, and it looks like it will be a substantial amount. We can't say "all" because there are legal restrictions in converting some titles to digital, but on the whole, we expect a substantial amount. I think what consumers can expect is to go onto the PSP store and see a large amount of previously released UMD content and see day-and-date releases of new games.
You then marry that to the PSP Minis, and you're looking at a really tremendous lineup for the PSP. You know in the past, we've heard that there are not enough PSP games and we should open up development. The Minis program opens up development to a wide range that would be available to the PS3 consumer previously, and I only think the consumer can benefit from that.
GS: Well, I guess the obvious comparison to the PSP Minis is the iPod's App Store...
JK: Well, it's definitely not an App Store. We won't have "Dude, where's my car?" apps. It's all definitely game-related. It taps out at 100MB. What we're trying to do is have a selection of much more snack-sized, small games to go with the larger and UMD-based games.
GS: Right. I know that Electronic Arts has already announced a PSP Mini version of Tetris. When does the PSP Mini store go live?
JK: It will be launching October 1. And although we've only talked about EA publicly, there are a lot of partners who are very excited about this. And while we're definitely not encouraging iPhone ports, there are some developers who could hypothetically say, "You know what, I've got a game franchise I'd like to see on both." If it's a small, snack-sized game, you could hypothetically see them on both.
GS: I was thinking more along the lines of arcade titles like Galaga...
JK: Absolutely. Those are all possibilities.