In an exclusive interview with David Reeves, head of Sony Computer Entertainment Europe, Eurogamer had the opportunity to discuss with Reeves his views on Sony's current position in the video game industry. The interview covered a wide variety of related topics as Eurogamer peppered Reeves with several hard-hitting questions.
In contrast to Kaz Hirai, who was recently interviewed by The Official PlayStation Magazine, Reeves’ comments were more subdued. He also deftly danced around touchy subjects such as the decline in year-over-year hardware sales for the PlayStation 3 and the PlayStation Portable for the quarter ended December 31, 2008. Reeves explained, "The plan wasn't necessarily to hit sales, it was to hit a profit target - to do better than break even in Q3. The financial results show a break even in Q3 for Sony Computer Entertainment worldwide. So rather than then going for market share and sales, we went for profit, at least to break even."
Reeves disputed Microsoft's claims they are leading the PlayStation 3 in console sales numbers by one million units. He stated, "I don't want to talk about the competition too much, but Xbox 360 is not ahead by a million units. We sold through 500,000 PS3s in November. We sold through 1.1 million units in December. Our installed base now is very close to 8.5 million units in PAL territories. Our numbers show we are absolutely neck-and-neck."
With regards to Kaz Hirai's recent controversial statements, Reeves had no comment other than to stay that he believed Hirai was misquoted and that he would not be making any similar statements about the competition. Hirai was quoted as saying the "Xbox 360 lacks longevity" and that Sony still has "official leadership" of video game industry.
On the health of the video game industry in general, Reeves believes that although it is not recession proof, the industry is very healthy. Reeves stated, "Of course there are going to be some people who fold. But the videogames industry is inherently very healthy. It's not a question of survival of the fittest, it's the survival of people who are professional, and don't just go around cutting their prices and destroying the market."
The comments may be a small jab towards Microsoft which chose to implement price cuts in 2008 that have helped spur Xbox 360 sales. He conceded there may be a need to cut the price, but Sony may choose to endure for the next 6 to 7 months.
In response to the question from Eurogamer asking if the PlayStation 3 will remain the most expensive console on the market Reeves stated, "I think it will, yes. I'm not saying there are going to be any price cuts at all in the short term or the medium term. I'm not saying we don't need to do it - we are expensive. It is possible that as the cost [of manufacturing] comes down, we will be able to do it."
When discussing the variables that come in to play when a consumer decides which console to purchase, Reeves highlighted the benefits of the PlayStation 3 while taking a jab at the pitfalls of the Xbox 360 all in a couple of sentences. He stated, "There are people who come in having done their research, thinking, 'PS3 has got all the games, it's free to go online, it's got a Blu-ray player. I know I'm not going to have to ring up the customer care line saying I've got three red lights.”
As a wrap up to the interview, Reeves reemphasized Sony Computer Entertainment's goal for 2009 is to break even or to make a profit. He said, "Europe certainly will make money this fiscal year, from Sony Computer Entertainment's point of view. We are already on track to do that. Even with the recession we've got to ramp it up, to keep that install base and that momentum going. The priority now is still to make money, or at least to get to break even."
The strategic decision to break even or make a profit with the PlayStation 3 is lessening the likelihood of a price cut. As a result, Sony appears to be falling behind in terms of consoles sold which is a quantifiable measure that is often used when measuring the overall success of a console.
