PlayStation 2 is still selling, PlayStation Portable is going from strength to strength, and PlayStation 3 has turned a corner, so the mood at Sony Computer Entertainment must be positive, especially following a period in which it faced successive PR headaches. We met with Kazuo Hirai, chairman and group CEO of the division, to catch up on the story to date.

How are you? How’s life at Sony right now?

Very good, I’m feeling very good. We’ve got a lot of PS3 titles out, like GT5 Prologue and MGS4, and you’ve seen [at E3] what we have lined up from just our first-party side for this holiday. The PS2 continues to just rock: nine years in and 130 million units later we’re still in business. The PSP – what a resurgence; after we brought in the Slim and Lite version last year we just can’t keep it in stock. We are firing on all eight cylinders – or all three platforms, if you prefer. We’re feeling good.

On a negative topic, what was your personal reaction to what happened with PlayStation 3 firmware update 2.40?

My personal reaction is that shouldn’t have happened. I made sure that my feelings were felt. We were able to identify the issue very quickly; we pulled it as quickly as we could, and for those consumers whose consoles froze on the XMB we are dealing with them on an individual basis and dealing with the firmware and getting it back to them as quickly as possible. I’d like to think that we got in front of it, but quite honestly it’s something that shouldn’t have happened. On the other hand we do a lot of these and this kind of thing is very rare, and that’s because of the extensive testing we do before any of these firmware upgrades do go out.

Looking at the PS3 story so far, if there was anything you could go back and do differently, what would it be?

Well, I was not in place to decide on some of the issues for the worldwide launch, but while we were very confident – and still are – of the PS3’s capabilities, we may have been a little too zealous in trying to get that message out too quickly. In other words, we can talk about all the non-game functions, features and services now because we actually have them. To say that it isn’t just a games machine without being able to point to tangible things that you can show to consumers – that’s a bit of a challenge. So in the US operation, which I was running at that point, our positioning was firstly as a great videogame console, but I think there was a bit of a disconnect between us and Japan, when they were concentrating on the PS3’s other capabilities at a time when we didn’t have anything to back up that claim.

We understand that a new PSP model is on its way – what’s the story there?

[Turning to SCE public relations staff] Could I hear about that? [Laughs]

OK, let’s say, theoretically, if Sony was putting together a new PSP, do you think it would be a good idea for it to feature a hard drive?

I think that whether it’s a hard drive or flash memory depends on the capacity and cost involved, as well as durability – not that we want people to drop their PSPs, of course. What kind of capacity do we need, and why do we need that? That all comes into play. I don’t think it necessarily needs to be a hard drive – it could be flash memory if it comes down in price. For this theoretical console, of course.

(ed: Since this interview was originally conducted the PSP-3000 was announced with a brighter screen and a built-in microphone, but no built-in storage solution.)

When you get back to your office, what will be the first item on your list of priorities?

I think basically it’s the same thing I set out at the beginning of the year or even before that, and that is firstly making sure we stay on course and have all the great games on PS3 coming out on time and to support them as much as possible, whether they’re a first-party or third-party title, but at the same time making sure we are on track to develop the non-game services and content I’d like to see on the PS3 as a platform.

Secondly, and more importantly, to make sure that I’m also able to lead the mindset change within the organisation to say: “Yes, games are important, they will always be important first and foremost in our mind, but there’s the other part of the business that needs to start embarking on things, and this is stuff that is not just nice to have but something that we must do on this platform.” And that’s not because I said so, it’s because the console is designed to take advantage of the non-game services and content, and I want to make sure that we are expanding this business beyond being just a game platform… I’ve seen that movie already – it’s called the PS2. And the high-water mark is about 130 million [sales].

And I’d like to do a bit more, and that means we need to be not only successful in games but successful in non-game areas as well. And that’s a mindset change we need in the company so that we understand where we need to go with the PlayStation 3 to rally around those two important initiatives.

You’re going to be quite busy, then.

Absolutely. That’s how I like it.