An Audience With: Andrew House
Andrew House joined Sony in 1990, and became part of the PlayStation division at the very beginning in 1995. After nearly a quarter of a century at the company, he has risen to president and group CEO of Sony Computer Entertainment, and recently helped to bring about the remarkable transformation of the PlayStation business that has seen PS4 surge to an early lead over Xbox One. In association with Brighton’s Develop Conference – where House and Mark Cerny will meet on July 9 to discuss the past, present and future of PlayStation – we catch up with Sony’s chief exec to reflect on PS4’s flying start, Japan, and the perils of working for a boss who used to do your job.
PS4 passed seven million consoles sold recently. How does that stack up against your initial expectations? Massively beyond them.
Back in September, I’d laid out a goal of selling in [to retailers] five million units within the fiscal [year, ending March 31]. For us to surpass that by a very large chunk – and, indeed, to sell those units through to consumers – has just been a phenomenal response, for which we are enormously grateful. We are substantially ahead of the adoption curve for PS2 at the same time in its lifecycle, which obviously bodes extremely well. And we’re almost at a point where we’re struggling, really, to meet demand. I think that’s continued right through from launch. Having said that, we were able to address a very wide geographical market, which we thought was important. One of PlayStation’s strengths is that it’s such a strong brand in Europe, and in places like the Middle East and East Asia. We wanted, really, to draw a balance between maintaining good solid supply – which has been very challenging – but also making the platform as widely available to as many consumers as we could around the world.
Yet you launched last in Japan. That seems like an unusual decision for a Japanese company. It was a hard decision to make.
I’ll be frank with you and say that we took a lot of… I wouldn’t say criticism, but disappointment, which was expressed fairly [strongly] by the Japanese gamer community. And that’s always very hard when you know you are, if only for a few months, disappointing a very eager and loyal audience. But we felt that it was very important to establish a really strong baseline of content for a new platform, including content coming from Japanese publishers and developers, which was due just a little bit later than it was for some of the US and European [companies]. And we felt it was important that, if the platform was going to have a good solid start in our home base country, we had to launch when we could see a roadmap of good content, and I think the initial launch numbers and the continued sales in Japan have borne out the sensibleness of that decision.
There’s been a shift away from home consoles in Japan. Does living-room-based hardware still matter there, or has mobile gaming taken over completely?
Obviously mobile gaming has become very prominent. I think consoles still have a very strong point of relevance, but that relevance is going to be defined by content, and by the social experience around console gaming. When I fired up my PS4 at home right after the Japanese launch, I could immediately see people online sharing gameplay, lots of Japanese commentary – the same sort of activity around PS4 as we saw everywhere else in the world. What’s also been really pleasing is that the initial audience that’s buying PS4 in Japan is much younger than we’d first anticipated. We’re seeing a sweet spot anywhere from the mid-to-late teens through to the mid-20s, and that is considerably younger than where we’ve seen consoles traditionally being played in Japan. It says to me that there is the opportunity for a revival of console gaming for a whole new audience.
You’ve been with Sony for almost 25 years, and worked on PlayStation since the beginning. How does a Welshman with an English degree end up working for Sony in Tokyo?
I put my gaming history back a little bit further than that. I cut my teeth on Defender during a misspent youth in the arcades of Weston-Super-Mare, when my parents thought I was at band practice. My only gaming claim to fame is actually having beaten Defender on one 10p piece back in the day. I certainly don’t have the skill and reaction times any more, but I still cling on to my youth. I was working in communications for Sony corporate [when PlayStation began], and I actually volunteered for the project at a time when there weren’t that many takers within Sony. It was felt to be rather like a toy, and was seen as a venture that was going up against very entrenched competition. There was, I think, a considerable amount of scepticism. But I had the privilege of meeting [Ken] Kutaragi, [Terry] Tokunaka and Akira [Sato], the founders, very early on in the project, and was just absolutely convinced that the platform they were developing and the reinvention of the business model they were undertaking had the opportunity to change the game market, and [that they] were pointing the way to a whole different form of home entertainment. I think I made the right bet.
How does the Sony of today compare to the company back then? What internal changes had to be made in order to create PS4?
I like to think there’s a new generation of leadership at the company. I would point to Mark Cerny and myself, and Shuhei Yoshida – and also Masayasu Ito, who runs the business division – as sort of the core of that. Among the four of us, there was a realisation of the need for an absolutely renewed focus on the gamer and, by extension, the developer. We are at our best at Sony when we [focus on that]. I think the combination of someone with a very strong developer focus [in Cerny], someone whose background has come through consumer marketing in terms of myself, and someone who lives and breathes today’s content creation in Yoshida – coupled with an engineering team that was willing to take risks and to put aside the past and do something very different – is really the combination that’s brought about the PlayStation 4 that you see.
Does it help having, in Kaz Hirai, a CEO who understands both the console business as a whole and what PlayStation needs?
Well, it’s both a help and, I have to say, sometimes a curse. When you’re giving presentations to a boss that has held your role previously, you [get] an awful lot more detailed questions than you’d get from other CEOs. Joking aside, Kaz having come through the PlayStation organisation and understanding the fundamentals of what makes a strong platform has been enormously helpful in supporting our efforts. The result, of course, is that PS4 is flying. Can you pinpoint the key decisions you made that brought it such instant success? One was – and we did, if not agonise, then give an awful lot of consideration to this – the degree to which we incorporated the Share button, placing a lot of emphasis on broadcasting and sharing. Similarly, with considerable financial implications, doubling the size of the core memory was a very hard-fought decision. Mark and myself and Ito were just convinced that this would be the step change. It was an absolutely fundamental example of where we really did listen to what developers were telling us [about] what they needed for their games to sing, and we responded in kind.
But how many of them will need it all? Epic CTO Tim Sweeney says the coming generation will see a third of the number of triple-A games that we saw in the previous generation. Does that stack up with your strategy? Indies are more important than ever, but it’s still blockbusters that sell consoles, surely?
I think both are absolutely important to having a vibrant ecosystem. Looking at the first year of both new IP and triple-A content [on PS4], it certainly seems to be on par with, if not substantially above, what we saw in the initial year or two of PS3. I’m not sure I agree [with Sweeney]. There is definitely a concentration on a smaller number of much more pervasive and powerful franchises, but that’s why we’ve put so much emphasis on reaching out to independent talent, taking advantage of the fact that for the first time we have a very vibrant [and] connected community. It’s an opportunity to lower the barrier to entry by delivering games digitally, and to showcase new IP and new franchises from brand-new developers. All of which feeds into an ecosystem that really should allow new talent to emerge within the industry as much as it should for large franchises to dominate at the top end.
PlayStation Plus might be your biggest competitive advantage over Xbox One. Was there not a concern when it was mooted that it might be too generous?
I think we realised fairly early on that there was an inherent retention opportunity there, selfishly; if people were able to build up a library over time, [then] that would encourage them to stay part of the programme. But I think we recognised, since we launched PS Plus a significant degree of time after our competitor, that we had to work harder. We had to build a proposition that was more content-based, that wasn’t reliant on a single feature like online multiplayer, and I think that just made us work harder. What we did monitor very carefully was how making games available free of charge to a very engaged audience was having a positive effect on sales through word of mouth. That helps in getting publishers and other developers on board. [We can tell them that] giving IP away for free would actually be a net positive, since it would drive word of mouth and additional sales for your games to an even wider audience.
So much attention has been paid to PS4 that Vita has been overlooked in recent months. Those who have one tend to love it, but how do you get it into more hands? What does it take to market a gaming handheld these days?
Well, the first market that I would point to is Japan, where the dedicated portable market has always been very strong. We’re really encouraged to see the start of a very positive spiral in the Japanese market around Vita. Weekly sales are getting to that point where we can really see that this is a platform that has got some legs. That, definitely, is having an effect on the Japanese publishing and development community. Overseas is more challenging. That said, we’ve taken a more holistic view with our platforms. With Remote Play, Vita has now essentially become an extender or an enhancer for the main platform for other rooms in the house, or when someone else wants to use the main screen. As the lifecycle of the platform progresses, there’s an opportunity to position Vita for a younger audience as well with the appropriate franchises. And it’s becoming a very accessible and easy on-ramp for independent developers, those who have had some success in the mobile space and now want to work on games that are that little bit richer, that have a more dedicated gaming interface. And we’re certainly seeing Vita being embraced by that community very strongly.
You announced the streaming service PlayStation Now earlier this year. Is that meant to add value to PS4 and Vita, or is it more about reaching other screens and other people?
I think it’s the latter. It’s [about] trying to broaden out to audiences that perhaps have not embraced a console before – to deliver really great console-level gaming experiences with the convenience of a device that they already own. It’s a longterm strategy, and it’s one that we will undertake very carefully. Distribution shifts and streaming have transformed the way that other entertainment content businesses operate. We think that there’s a responsibility to take an industry leadership stance and have that transformation happen in the best interests of the consumer.
You also have a responsibility to make sure it’s done right. It’s a big technical challenge, isn’t it?
Absolutely, and it [needs] considerable server investment. We felt that the guys at Gaikai brought some significant technical and industry know-how, and that’s why we were keen to partner with them. I think the first fruits of that for us have been Remote Play, which grew out of technology that the Gaikai guys had developed. That is, I think, a harbinger of where we will be able to take the business once the technologies come more fully online.
E3 2014 is almost upon us now. Last year’s was a dream event for Sony, but do you think you can ever have another E3 like that?
I think that was a very special moment in time. It’s going to be extremely challenging to surpass the levels of excitement that we had last year. What I hope we’ll do at E3 this year is get people very excited about where PS4 is headed. We’ve got some great games [and] some great franchises that are coming to the platform that’ll keep people excited about PlayStation 4, or will be the prompt that’ll bring new people on board.
Microsoft’s misjudged policies played quite a role in your success last year, but the company has changed enormously since, along with Xbox One itself. What’s your view of your closest competitor now?
I really don’t think it’s my place to comment on someone else’s strategy or leadership. It’s a cliché, but it’s a truism: our focus is going to be absolutely on PS4. [We’re] keeping a steadfast focus on the gamer and the developer that builds those games for that audience, [and] being sure that we are the best place to play. I think we will see a broader reach of entertainment on our platform as well, but first and foremost it has to be about great games. That’s what we’ve been in the business of doing for 20 years now, and we’re absolutely committed to ensuring that we deliver the best.
The Develop Conference runs from July 8 to July 10 in sunny Brighton for three days of debate, discussion and inspiration from the games industry. House and Cerny will keynote the show on July 9, open a day that will see developers from Media Molecule, SCEE, Microsoft, Rare, 22 Cans, Codemasters, Capy, The Chinese Room and many more discuss development in 2014.
For more information, visit Develop’s website, or follow the show on Twitter and Facebook.