It's been 30 years since the PlayStation first

brought to life some of the most iconic video game

franchises.

Hello New York!

Whether it's coming from third party partners, that

release stuff that is exclusive to their

platform or their own first party studios making

stuff, the library has been the number one thing

that really pushes the success of the systems.

For PlayStation, the game has always been, no pun

intended, great content to a great console, and I

think that that is where the exclusivity brings

people and creates a loyalty and engagement

that is really hard to replicate.

During its pandemic era rollout, the PlayStation

five was nearly impossible to come by.

Hunting for a new PlayStation for Christmas

or an Xbox Series series ten?

Good luck!

Sony's always done great hardware design, and it's

one of our strengths. It's one of our points of

difference.

The PlayStation two is the best selling video game

console of all time, with nearly triple the sales of

Sony's latest PlayStation five.

Annual gaming sales exceeded $24 billion for

Sony in fiscal year 2022, which makes up over 30% of

the company's overall revenue. The PlayStation

network, the company's online gaming platform,

has 123 million active monthly users.

For reference, that's about the same number of

people who tuned in for the record breaking Super

Bowl 58.

If you include mobile, you include global.

You put it all together, the video game industry is

a $200 billion plus industry.

It's bigger than music.

It's bigger than movies on a revenue basis, the

largest entertainment sector in the world.

The Nintendo Home Entertainment System

entered Japanese homes in 1984 before spreading

internationally two years later.

It utilized game cartridges that were

inserted directly into the device, a standard for

that decade's gaming consoles.

You mean you haven't.

Played it yet? We can play it on my Nintendo

Entertainment System.

In 1994, the PlayStation launched in Japan, which

accelerated the gaming industry's shift away from

cartridges.

Going over to a disc format was a big deal

because of how much data could be stored on those

discs versus what was possible on cartridges at

the time, and that was a large reason why a lot of

third party studios even moved over to PlayStation.

While competitors in the modern video game

landscape, Sony and Nintendo, had privately

signed an agreement in 1988 to jointly develop an

optical disc game player, there were even 200

Nintendo PlayStation prototypes that were

manufactured, but the relationship fell apart

before its release.

Just when we were about to announce the launch of

this, Nintendo backed away and they ended up

going with Philips for their optical disc format,

and Sony was kind of left at the altar standing here

with this beautiful compact disc reader.

And so the PlayStation was born.

Sony's first foray into the video game space

entered the US in a 1995 launch that was announced

at the first Electronic Entertainment Expo known

as E3. Sega, one of Sony's biggest competitors

at the time, also announced its US release

of its Saturn console with the price point of

$399.

Before the launch, there was considerable

uncertainty. We were moving into a space that

had two pretty entrenched occupants, Nintendo and

Sega.

The then president of Sony Computer Entertainment

America took the E3 stage and made a short but

significant announcement.

$299.

The price of the PlayStation launching in

the US.

That was throwing the gantlet down.

It's like PlayStation is not here to play, we're

here to win, and we're going to come in $100

under all of you. But it just blew the blew the

doors off when people thought, wow, Sony's not

here to dip their toes in the water, they're jumping

all in.

There was no way that we could assume that we were

going to be successful. And it was really not

until the day of launch.

You know, we woke up that morning and we saw big

queues outside, retailers of excited people waiting

to get their hands on on their PlayStation, that we

realized that we were probably on to something

there.

The original PlayStation went on to sell over 100

million units worldwide.

Jim Ryan joined Sony in 1994, the same year that

the PlayStation was born in Japan.

He is set to retire in March of 2024 after a 30

year tenure with the company.

I have hugely fond memories of the original

PlayStation, and I'd never really played too

many games before joining what was then Sony

Computer Entertainment, putting CD discs to that

thing and really experiencing Tekken,

experiencing Ridge Racer, uh, experiencing Resident

Evil. Those were great days.

From the beginning, the company knew just being a

tech company wasn't enough. You had to bring

some secret sauce in from the entertainment world.

And by doing a joint venture between Sony Music

and Sony Electronics, I think that was the key to

the early success of PlayStation.

The PS2 was released in 2000, and went on to

become the best selling video game console of all

time, selling a total of over 155 million consoles.

We went into markets where video gaming had never

really been a thing. So, you know, southern Europe,

for example, Italy and Spain and places like the

Middle East, we established a gaming

culture where none had existed.

The PS2 also functioned as an affordable home

entertainment system as it had a built in DVD

player. This helped some buyers justify the

purchase, as DVD sales reached $16.3 billion and

accounted for more than half of the US home video

market by 2005.

We put like The Matrix into a box with a PS2.

You don't like games, but you want to watch this

movie? DVD was a real accelerant for the

PlayStation two adoption.

But this momentum came to a halt when Sony released

the PlayStation 3 in 2006.

Our Icarus moment was when we launched the

PlayStation three. We created a huge hole in the

bottom line that we need to fill over time.

The machine was incredibly expensive.

I just remember anecdotally getting that

sticker shock when you guys announced the price

of the PlayStation three.

Oh my god, who's going to buy this?

This is ridiculous at the time.

Now, today, that kind of a normal console price, I

guess. Can you just talk a little bit about the

challenges in that generation that you guys

went through?

Yeah, I think if I had.

To kind of, um, encapsulate PlayStation

three generation, I think I'd sort of say that we

maybe we got a bit carried away with the

success that we'd been enjoying on PlayStation

two. And we we kind of stumbled a little bit at

the start of that generation, and the early

days were difficult.

It was very, very powerful, but it was also

very expensive and it was frankly hard to develop

for we needed to work really hard with some,

some amazing franchises.

The company slashed prices multiple times for the

PS3, but still lagged behind Microsoft's Xbox

360 and Nintendo's Wii.

The company picked itsself up, brush itsself off,

came up with some of the most amazing games of the

generation. Uncharted began on PS3, Killzone was

on PS3, resistance was on PS3 and knew that we had

to win out by not being a computer in the living

room, but by being a game machine in your house.

The 2013 launch of the PlayStation four proved to

be the hit Sony needed.

After the slump in sales from its predecessor.

It launched at a lower price than the PS3, and

Sony saw its fastest start in console sales up

to this point in the years that followed.

Sony went on to sell double the amount of PS4

consoles compared to the Xbox One.

I always played a fair bit of FIFA back then because,

you know, power of the PlayStation four allowed,

um, sports games in particular soccer.

Um, that as a European.

I'm crazy about to become really realistic and, uh,

you know, really great gaming experience.

I think PlayStation's success is really rooted

at the core of what they do best, which is content.

And, you know, in the industry, we always say

content is king and it's true.

There's this trend where gamers play, they spend

more time in fewer blockbuster games.

So what that means for us as game makers is we're

making these benchmark titles and they're their

big bets, they're big budgets, and that comes

with a lot of risk.

The PlayStation content library is composed of

first party and third party developed games,

meaning it's a mix of games created in-house at

PlayStation Studios and by outside developers.

The PlayStation depended on third party developers

and publishers to bring content in.

We built a platform, we built some software, but

the majority of the opportunity was spread

against Electronic Arts, Activision, Ubisoft,

Namco, Capcom.

Sony was happy not to be the biggest publisher on

the platform as long as they could increase it.

It wasn't about taking shares of the pie, it was

about making the pie itself bigger.

And I think that was a difference of approach

that helped the company to be successful.

But a slice of that pie was taken off the table in

2023, when Microsoft completed its purchase of

the video game giant Activision Blizzard.

Well, we were concerned about what the regulatory

climate would be, but we never thought that there

was any, you know, real reason that was

legitimate. Why these two companies couldn't

combine.

The big controversy is obviously Activision is is

a big producer of games, and the concern was that

with Microsoft acquiring them, they would own

pretty much what is left of independent big studios

and not share the games over with PlayStation.

You had this interesting argument about Microsoft

buying Activision and what that could mean for

exclusives, what that could mean for cloud

streaming. At the same time, Sony has done very

similar things buying studios to make them

exclusive or making exclusive deals with

companies like square.

In your view, why was the Activision deal wrong or

bad for the industry?

Yeah, the the reason that we felt this one was, was

different to anything that had happened in the

past was the sheer size and importance of the Call

of Duty franchise.

So we were absolutely thrilled to be able to

negotiate a deal with Microsoft to ensure that

that franchise remains available on PlayStation

platforms for the next ten years, and that was

very important to us, and we're very happy to have

done that deal.

But the timeline is a little different, though,

right? Because why didn't you agree to the deal when

it was first offered, and instead you were part of

the case with the FTC?

A key witness for the FTC?

Yeah, I you know what?