GAMES 09: Interview with David Reeves, Former President and CEO, SCEE
We talk to gaming industry legend David Reeves, the man who launched the PlayStation brand in Europe.
GAMES 09 might have been all about hot video game releases, competitions and new hardware but for us, the most exciting part of the event was the chance to meet David Reeves, the former President and CEO of Sony Computer Entertainment Europe.
David Reeves, Former President and CEO, SCEE
His resume is nothing short of extraordinary. David graduated from Cambridge University (UK) in Natural Sciences and completed a PhD in Chemical and Astrophysics. He worked at NASA as a student and later went on to complete his MBA in Marketing.
After a series of high profile jobs, David joined Sony Computer Entertainment in 1995 where he was responsible for overseeing the launch of PlayStation and firmly establishing the brand in Europe. During his tenure, he has helped secure an 82% market share for the PlayStation brand in PAL territories and had over 102 markets reporting to him.
Having retired from SCEE, David now acts as a management consultant for the company.
We were set to interview David at the lobby of the Godolphin Ballroom at the Emirates Towers in Dubai. He’s surrounded by Sony officials and PR execs, who seemed a little more nervous than he did. David seemed relaxed. Obviously, this was not his first press interview.
From the pictures we saw of him on Sony’s website, we expected a fast-talking MBA-type that looked a bit like Conan O’Brien. Far from it, David was quite laid back and while the press pictures of him on Sony’s website make him look like NBC’s Late Night show host, he looks far from it in real life.
We talked to David about the PlayStation brand and the future of the gaming industry.
MEGamers: David, you have a PhD in Chemical and Astrophysics. How did you end up in the games industry?
David Reeves: I was working with NASA while I was a PhD student. It was a challenging job but the funding eventually went down and I decided to change careers and pursue an MBA in Marketing. That led to a series of jobs in many countries. While, I was working with Mitsubishi in Japan, I ended up playing golf with the people from Sony, who offered me a job.
I’ve been with Sony for over 14 years before my retirement. Now the only Astrophysics I indulge in is my 14-year-old grand daughter’s homework, which is pretty easy.
What would you say was more difficult? Astrophysics or working with Sony?
My work at Sony was definitely a lot more challenging. They say it’s lonely at the top and indeed there were days when it was. But it was also a lot of fun and very rewarding.
Tell us what it was like to launch the PlayStation brand in Europe?
It was one of the greatest experiences of my life. We had set up our offices in Germany back in May 1995. Back in the day, I had to put everything together — from getting office furniture sorted to hiring sales teams to overlooking logistics, accounting and operations. By September 1995, we had to hit the ground running. We’ve been very lucky that that we’ve had some great launches including the original PlayStation, PlayStation 2 and PlayStation 3.
Which of those was the most challenging?
The PlayStation 3 was the most difficult. Because of the technology involved, it had a high manufacturing price. Price is important and luckily prices have gone down now.
What factors contribute to the price of the consoles?
With the PS1 and PS2, it was about joining several chipsets and bringing down the power consumption. That made a difference in price.
However, the primary factor is always economy of scale. We use contractors in China to produce the consoles. The more you produce, the lesser your price is. The price of the PS3 has come down, even if it is at a slow pace. It will probably come down even further over time but not in the very near future.
Are you happy with the way the PS3 has performed?
I think it has been an enormous success. The PS3 has a higher tie-ratio than the PS2 by 1 and a half points. I think the PlayStation Home has also been very successful. We’re seeing a trend where people buy products online but retail sales have not suffered.
Why do you think that is?
Video gamers like to go into the stores and touch and feel the product. They buy the disc and then wait for add-ons to made available for purchase online.
Why aren’t people just downloading full games through PlayStation Home?
We might see more of that in the future. Once Fibre to Home connections become common, the growth of direct downloads will really start to accelerate.
What do you think is in store in PlayStation’s future?
I think that it’s going to get more competitive in terms of pricing compared to the Xbox. I also see a bigger uptake in the handheld market with the PSP Go!
There’s been a lot of talk about the PSP Go looking like a cellphone. Sony certainly seem to have all the bits of the puzzle — the ability to build great phones, great music players, great cameras, great video devices and great gaming machines. Considering convergence is the buzzword at the moment, why not combine your technology to create one device that does it all.
I think there are two kinds of people out there. One kind of people like to have a black belt type toolkit where they can have one phone, a Blackberry, a MP3 player and a gaming device. They want different devices for different things.
There’s another group of people who want it all together. Problem is, if you lose that one device, what do you do? It’s almost as though your whole life’s fallen apart.
Although, having said that Sony might just launch more products that focus on convergence in the future.
Do you see the iPhone as being a serious competitor to the PSP one day?
iPhone is great because it has a lot of apps. There are some games but these are very casual games. If you really like these games on the iPhone, chances are you’ll go out and buy the game on a dedicated gaming device. iPhone in the gaming world needs access to much bigger games if they want to attract hardcore gamers. They also need to have better contracts with their customers. The prices in some countries for the iPhone is ridiculously high.
What do you think of Project Natal?
The gaming industry has been changing. When it started, the gamers were right next to the screens with their controllers. These are what the Japanese would call Otaku (obsessive fans).
However, Nintedo’s Wii and Natal take things a step further by increasing the distance between the player and the screen. They provide new ways of interacting with video games. It’s made video games accessible to a larger demographic of women, children and parents.
As a hardcore gamer, gaming for me is all about crisp graphics, great effects and top-notch gameplay. Are we moving away from all this by trending towards casual/social gaming?
I don’t think this industry is going to neglect hardcore gamers. Technology such as Natal and motion sensors will just help enhance the experience and add to the enjoyment.
What are your thoughts of the Middle East market?
The gaming industry worldwide is worth about $40-45 billion. The market in the Middle East is worth $700-750 million. As piracy slowly disappears from this market, the industry here will grow further.
Many thanks for taking the time to talk to us, David.
Thank you.
