Q&A: Jack Tretton talks PSP

As Sony launches its first portable platform, SCEA's EVP talks about the future of the format.

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After much fanfare, the PSP first went on sale in Japan last December. Though well received by Sony loyalists, the handheld's launch was plagued by reports of supply shortages and defects, such as a sticky square button and dead pixels. Months later, these concerns were joined by an outcry in America over the unit's $249 price tag, $65 more than the approximate Japanese price of $185. However, such grumblings did nothing to hinder the PSP's March 24 US launch, which, after it was finally announced, went ahead like clockwork.

With several years and billions of dollars in research and development on the line, the stakes for the device's US launch could literally not be higher. But, with two major launches under his belt in North America--the PlayStation in 1995 and the PS2 in 2000--Sony Computer Entertainment America executive Jack Tretton is used to working under pressure.

Such experience might explain why Tretton looked so relaxed on the eve of Sony's first foray into the handheld gaming market. Wearing a shell necklace and a casual-but-snappy suit straight out of a Caribbean yacht club, the affable executive met with GameSpot at the Sony Metreon, site of the company's West Coast kickoff party for the PSP.

Tretton's presentation was equally smooth as he hammered home Sony's hopes for the PSP in the face of some lingering skepticism by many gamers about its chances. While he would not go into too much detail about the handheld's music and video capabilities, he did outline Sony's PSP game plans for the rest of 2005--and promoted the device's vast potential.

GameSpot: This is Sony's first game-platform launch since the PlayStation 2 in 2000. What lessons from that experience is Sony applying to the PSP launch?

Jack Tretton: I think the lesson that we've learned is that this is day one of a 10-year marathon--if this platform is as successful as we think it should be. In comparison, we did a half million units of PS2 out the door, and we're sitting here just over four years later with 31 million units sold in North America. So a million units is very exciting, but what's much more exciting to me is to think about where we're going to be a couple of years from now.

GS: Speaking of the future, how long do you think it will take the PSP to match the DS's current sales of nearly 5 million units?

JT: I think the demand is clearly out there, and I think 1 million units on day one is a real testament to how quickly we can ramp it up. Just compare that to the Japanese launch, which was 200,000 units on day one--they're at 1.1 million now.

GS: What constrains that kind of growth?

JT: I think it will be strictly limited to production [capacity].

GS: What are retailers telling you?

JT: It's not a hard product to sell. Everybody thinks that it's going to be huge. You drew the comparison of what have we learned from Playstation 2. Then, half a million units at launch was significant. A million units today is double that. I think it's a real shot in the arm for the industry and the retail community. Most [retailers] didn't have it budgeted in their plans, and all of a sudden a lot of money is going to ring through the registers tomorrow at $249 retail. And I think the attach rate on software is going to be real strong.

GS: When that initial batch of 1 million is gone, how much longer until the next batch comes to retailers?

JT: Well, we've been blessed with this great problem of worldwide success. Our competition has had some success in limited markets, but clearly there's no competitor that has had worldwide success like we have.

GS: How do you manage the demand from the various markets?

JT: Given the tremendous success in Japan, there was the temptation of maximizing Japan before we moved on. But because we're a global leader in this category, we want to address each market as quickly as possible.

GS: Have there been any supply problems? There were reports the European launch was delayed because Sony wanted to focus on supplying the American market.

JT: Our initial goal was to get all three markets out by Christmas. It was obvious that that just couldn't be done, but I think we got off to a great start in Japan. We'll clearly get off to a great start in North America, and as much as I would selfishly like everybody to focus on North America, I realize that we're very strong in Europe, and we need to get those guys rolling in fairly short order too. I think Japan has had to sacrifice to some degree for North America and down the road we'll have to sacrifice to some degree for Europe, but that's a testament to the worldwide success.

GS: The Europe date is still undetermined, right?

JT: Still undetermined. But I think some of our greatest strengths are some of our greatest challenges. If you're a developer, let's say you put together a great game. Not only can we generate a lot of sales in whatever host market we developed [our game] in, we can amortize that across other territories. So it's the challenge of having hardware for each of those three markets; I think the reward for that is clearly our platforms are where the developing community puts their dollars.

GS: Are there any immediate plans to offer the PSP outside of the $249 Value Pack?

JT: The immediate plans are that the first million consumers get Spider-Man 2. After that, it will be the value pack without Spider-Man 2. But our intention for at least the calendar year is that the value pack at $249 minus Spider-Man 2 is probably the configuration that we'll have.

GS: What has the response been to the $249 price point?

JT: Extremely positive. I can be a little bit selfish and bottom-line mindful and say, would it have any impact at all if we went out at $299 on day one? In my opinion it wouldn't, but I think again talking about this 10-year product life cycle, talking about the big picture well beyond the first million units, we're trying to seed this to the entire mass-market community, and we really wanted to hit a price point that wasn't even remotely a barrier. I think the line outside [the Metreon] is a testament to that fact. If we said, "Guys, I've got some bad news, it's going to be an extra $100," not one person would get out line. I think $249 is a great value.

GS: The Japanese launch of the PSP was followed by reports of some units suffering from dead pixels and sticky buttons. What steps have you taken to make sure the American launch isn't saddled with the same problems?

JT: I think with any hardware device or in any software application, you're constantly doing reps to make sure that you're state of the art, but I would say that the overall reaction to the PSP and the reaction to the quality has been extremely positive. We didn't have any concerns going in. And I can't point to anything that we did specifically to address the concern.

GS: Do you know anything about reports of PSP units with dead pixels?

JT: No. I can't honestly comment on defective pixels. I could tell you that if you really want to get rid of your PSP, you can do it for better than you paid for it.

GS: Sony has had some really innovative proprietary media formats--MiniDisc and BetaMax--that didn't succeed in the end. What steps are you taking to make sure the PSP's UMD format doesn't share the same fate?

JT: I think the UMD will be successful because of the content that's on it. I think the media device is important in terms of its memory capacity and the technical specs of it in terms of bringing content on it. If it's compelling to the makers of content, then people will put content on it. I think it's going to be a chicken-and-the-egg thing. We put a lot of hardware out there because it's got great software support on UMD, so the hardware is successful. The hardware is successful so other forms of media become interested in being part of the PSP success, and then movie content comes over. So I think it's one of those things where you create a format that has the ability to put great software on it. People put great software on it, the format is successful, the media is successful. That's the least of my concerns. I'm not at all concerned that UMD will be a success.

GS: You said one of the selling points of the PSP is its audiovisual capabilities. How will Sony maximize its capabilities? Are there any plans for this calendar year that will see Sony leveraging those capabilities?

JT: I think we had a different approach when it came to our console device in that we didn't play up the DVD playback capabilities day one, but the consumers found out on their own, and we found out that we had a huge impact on DVD software sales in households across North America as well as the rest of the world. I think this time around we felt there were too many great aspects of PSP to deny them or to underscore them too little, but clearly it's a gaming device first and foremost. The software that people are going to buy with that device here at midnight are going to be gaming applications. In very short order, I think they'll begin to see offerings in movie content for sure, and music content not far down the road.

GS: Yes, I was on the Connect site today, and they said that all music on the Connect Music Store can be transferred to Memory Stick Duo on the PSP right away. But there's also talk about a possible firmware update coming up later on to give the PSP more iPod-like capabilites.

JT: Right, right.

GS: Is that in the cards anytime soon?

JT: I can tell you that all my energies are devoted to this initial PSP launch, and the million units we have going out the door, and the software support we have for it. I'm just so over-the-moon excited with the fact that we've got 24 launch titles; that eight of them are first-party; that we sold in over 1.25 million just on our software titles alone. So, selfishly, I don't feel we need a lot of those applications right away, and I don't think it's going to be necessary to sell them. But I do believe they'll come.

I think what you'll start to see very quickly from consumers is that when they take the device home and start to download things to their Memory Stick, put some music on it, put some digital pictures on it., put some video content on there. In terms of rolling out a full-fledged music download capability and coming up with a device that's more catered to that [market], that's something that is in the future as opposed to the present.

GS: Near-future or not-so-near-future?

JT: Tough to quantify it. I would say "near future," but in this industry "near future" means "tomorrow." I think "near future" could certainly mean within the "calendar year."

GS: In Japan, Sony said the new PSX models are going to automatically encode and download video onto PSPs, basically like TiVo to Go. Are there any plans for that functionality to come out here?

JT: I think the best analogy that I can give you is to think about the PlayStation when it first came out, and how that evolved--and that was 10 years ago. PlayStation 2 has now evolved significantly, and we've said this is potentially the Walkman of the 21st century. I think the device, as impressive as it is today, will evolve significantly over the next 10 years, and you will see many iterations and many expansions of the PSP, but nothing that I could quantify personally.

GS: You said you are pleased with the 24 launch titles. How many titles do you see coming out by the end of the year, for the holiday season?

JT: Well, in terms of titles in development, I know of 23 beyond the first 24, which takes us to 47. And I can tell you that I'm focused on titles that we'll be offering from the first-party standpoint. We'll have an equal or greater number of titles for the back half [of the year] as we had in the launch window. You'll see 15 to 20 from first-party I think.

GS: Currently, it seems there's an emphasis on sports games for the PSP. Are there any games in other genres that you can single out that will expand soon?

JT: Well, I can tell you that we'd like to bring one of the first RPG games to it. But if you look at the offerings that are out there on day one, as you said, the sports is well addressed. I think racing is addressed, graphic adventure, fighting… so I think there's a pretty wide representation out there right now, and I think that will continue to expand. I would look to the PlayStation 2 library in terms of the genres that are represented. I would say if you compare the ramp-up in the first six months of PS2 to the ramp-up of PSP, it will be probably three times the base in terms of not only number of titles, but also expansion of genres. I think it will be pretty broad, pretty quick, but I already think it's pretty extensive.

GS: What do you think the life span of the PSP is going to be?

JT: I hope it's endless, because I can tell you right now, we're 10 years into PlayStation 1, and we feel like we've kind of absorbed the PlayStation 1 and the PlayStation 2, so it lives on. I don't think there's any reason for a platform to pass away unless the consumer fails to have interest in it, and I think it's not a leap of the imagination to say this will still be compelling in 10 years. I think it will continue to evolve, and we can sell it as long as we can profitably build it.

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