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Jim Ryan, President and CEO of Sony Interactive Entertainment
The price and release date of the PlayStation 5 (PS5) have (finally) been announced. By the time this article is published, reservations for the release date should have started.
What will the price of PS5 be? As a result, it was announced that the “Digital Editon” dedicated to using the network cost 39,980 yen, and the version with a disk drive was 49,980 yen. There is an impression that the price of PlayStation in Japan is “familiar”, but considering that the price in the United States is $ 399 and $ 499, I feel that the asking price in Japan is quite good.
And above all, unlike the PS4 era, PS5 was “released on the same day” in both Japan and the United States.
PS5 Price
PS5 was released “the same day” in Japan and the United States.
How did these decisions come about? We hastily interviewed Jim Ryan, President and CEO of Sony Interactive Entertainment (SIE).
Since President Ryan lives in London, the interview was conducted online.
The price is assumed to be “399/499” from the beginning, and it is significant that it is “exactly the same”.
――First, could you tell us the background to the pricing decision? Why was it taken up to this point and why did it reach this price?
Ryan CEO (hereinafter shortened title):It’s certainly almost time for the release date.
This year was an incredibly difficult year.
Usually when launching new hardware, the price is decided at the beginning of the year. And in the middle of the year … I usually announce it at the time of events like E3. But as you know, this year was difficult.
We also had a lot of conversations with Sony headquarters about pricing strategies. From the beginning, we had a strategy of $ 399 and $ 499. To maximize the PlayStation user base and provide a great environment for game developers, we always had to focus on low prices as much as possible. Hence, the marked price range of $ 399 and $ 499 was preferred.
Due to the COVID-19 epidemic, this year has turned into an extremely difficult year. He really was in trouble. At the beginning of the epidemic in March and April, she did not know if it could be achieved at the expected launch time. I was also worried about putting it into production for PlayStation 5.
After that, the economic impact of COVID-19 began to become apparent. The store has also reopened (after the lockout), and those who can afford it can now leave the house and buy a gaming machine.
To hope for that, we had to collect as much information as possible and delay the decision. Meanwhile, we were convinced of the idea that “$ 399 is the correct value proposition.”
– This time, we have made $ 399 by releasing the discless “Digital Edition” at the same time. Especially the asking price (39,980 yen) in Japan is cheap. What is the background to this decision?
The standard “PlayStation 5” with an Ultra HD Blu-ray drive in the front costs 49,980 yen, and the “PlayStation 5 Digital Edition” without it is 39,980 yen. The photo is digital edition
Ryan:Very importantly, the Digital Edition is “exactly the same PlayStation 5”. It has the same functionality, the same architecture, and the same performance. The only difference is the presence or absence of a disk drive.
There are two reasons for the decision to implement Digital Edition.
The first is that the “$ 399” price range is very important. When the PS4 launched in 2013, it was in the “$ 399” price range, but I wanted to play it. “$ 399” is a very special number for us.
The second is that the “digitization” of the world is advancing further.
Even on the PlayStation platform, the percentage of digital purchases (download sales) is increasing year over year, and is now about two-thirds.
I have a 13 year old son. His generation is “everything is digital”. I hardly know what a record is. PS5 may be a bit early, but in 3-4 years, their generation will be PlayStation users too.
――On the other hand, rival Microsoft has decided to launch two models with different performance based on price at the same time. How do you see this?
Ryan:First of all, I would like to say that I respect the judgments and philosophies of all competitors. Obviously “price” is one of the important factors. We respect our competitive strategy.
But we are completely convinced of our strategy and its implications.
One thing to say is that the introduction of low-spec consoles for a particular price range has not produced very happy results in the history of the industry.
We have also thought about it. I also know that other operators have tried it and had problems.
As a result of our research, we know that when people buy a gaming machine, they want to use it for 4, 5, 6, and 7 years. We want to make sure that what we buy is safe for the future. We are not looking for something that will become obsolete in a few years.
When you buy a new TV, you want to be sure that the gaming machine you have now is fully compatible with the 4K TV you are buying.
Simultaneous Japan release of “Reflection of PS4”
――When I interviewed Ryan in January of this year, I heard that it was not a good idea to delay the release in Japan at the time of PS4. This time, “Japan will launch at the same time”!
Ryan:That’s correct (bitter smile).
The decision at the time of PS4 was certainly not a good idea.
Like I said in January, I thought, “Don’t repeat this.”
Yesterday (Japan time, early morning on September 17), there were a lot of things I had to send to the world, but for me personally, “The launch in Japan and the launch in the United States are the same day. it is very important to announce it.
――It was also important that the main Japanese game Paplisher had a strong presence in the titles announced at the event. How about maintaining and improving relationships with them?
In yesterday’s announcement, Square Enix’s “FINAL FANTASY XVI” and Capcom’s “Devil May Cry 5 Special Edition” were also announced.
Ryan:Yes, that is exactly what matters.
Not only yesterday, but also at the June presentation, we introduced many game titles from Japan. There are many more.
Many Japanese game developers and publishers were thinking of using mobile devices (for smartphones) as their main platform five or six years ago. But in recent years they have returned to game consoles, especially PlayStation. We recognize this as an industry-wide phenomenon.
We have many ongoing negotiations to spend more time and build good relationships with major Japanese publishers. We have a very good relationship with Square Enix, Capcom, and Koe Techmo. It was a great strategic objective to have a close relationship with all Japanese game publishers.
Is it difficult to forecast demand due to a shortage of goods?
――I feel like PS5 is in high demand towards the release date. How long do you wait to satisfy your demands or facilitate their obtaining?
Ryan:Sorry, actually, we don’t have a clear answer either.
I can tell you that the quantity supplied in the first year is higher for PS5 than for PS4.
But I don’t know if it is enough.
There is also a dilemma here. The more efficient and good the marketing, partnerships and sales are, the better the sales will be, but inconsistency between supply and demand can lead to significant problems. This is always difficult.
Given the response to yesterday’s program, it is very likely that we will have difficulty meeting demand. On November 12 you will have to get up early from bed and go to the store.
――Some foreign news sources say that the Digital Edition supply is extremely small compared to the type with a disc drive. Is this true?
Ryan:The ratio of Digital Edition to disk drive models is currently sensitive to the competition. We can’t reveal the exact number, but they both plan to produce numbers that reach the people who need them.
However, I had never done “split into two models” before, so I really don’t know which is the correct decision and which ratio is good. We are trying to make predictions as accurate as possible.
“PS4 Compatibility” and “Network” speed up transition from PS4 generation
Network services are also important in attracting people to PS5. This time, “PlayStation Plus Collection” has been added to the paid service “PlayStation Plus (PS +)”. Please tell me the meaning.
(Author’s note: PlayStation Plus Collection is an additional service for PS + subscribers. Dozens of PS4 titles such as “Batman: Arkham Knight”, “Fallout 4” and “Monster Hunter: World” can be downloaded and played on PS5 . 18 titles are open to the public, but which titles are all you can play depends on the country or region)
PlayStation Plus Collection
Ryan:We believe this will improve the PS + service for PS4 users.
There are three types of user groups.
We’ve announced 18 target titles this time around, but how many PS4 users do you think have played them all?
There are 100 million PS4 users, but far fewer are playing them all than you might imagine. They may not be attractive, but not for the “majority of 100 million people.”
The second user base is PS4 owners who update some of the Plus Collection games to PS5 after playing on PS4.
The “Plus Collection” will be worth giving you a good number of great bonus PS4 games for free.
However, the people who are most interested in the “Plus Collection” are “people who have never bought PS4 and buy PS5”. Those who have bought PS5 and are using PS + can get many PS4 titles for free.
This means that it will greatly enhance the value of PS +, but at the same time, it is also a significant customer acquisition tool for PS5.
――Tell us about the future of PS4. Do you think the market transition will be faster than from PS3 to PS4?
Ryan:Yes, I think it will be much faster. The main reason is that PS5 has very high backward compatibility with PS4 software.
Another reason is that the PS4 community is networked.
While the PS3 community was not a “network community”, I think the PS4 community is more networked, more catchy, and more cohesive. I think this gave me the opportunity to transition from PS3.
Also, the size of the PS4 community at the moment is significantly larger than that of the PS3 community in the same period in 2013.
Generally speaking, the opportunity to carry users from one generation to the next is much greater than seven years ago.
――Finally, could you give us a message for fans of Japanese games?
Ryan:The Japanese gaming market and the Japanese gaming community are one of the most important markets in the world for PlayStation.
We would like to thank everyone for their appreciation for the attention and focus that we are showing to the Japanese market, such as setting a simultaneous release date with North America and paying attention to the relationship with Japanese publishing partners. We sincerely look forward to a great experience and the future of great games on PlayStation.
Standard “PlayStation 5” with Ultra HD Blu-ray drive on the front
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