Sunday, December 03, 2006

Q&A With Kazuo Hirai.

Sony Corp.'s PlayStation 3 is in high demand and short supply, prompting some gamers to camp out in front of stores for the chance to pay up to $600 for one of the sleek consoles.

In a recent interview, Kazuo Hirai, the head of Sony Computer Entertainment America, emphasized that while the company is trying to satisfy demand as quickly as possible, it's in it for the long haul -- and sticking to strategies that have allowed it to dominate the video game market for a decade.

Q: How long will it take until everyone who wants a PS3 can get one?

A: We are trying everything we can to get as many units into the North American market as possible. The thing that we're trying to focus on now is shortening the lead time from the factories to the retailers and consumers. Usually, something this size and weight we would put on a boat, but what we're doing is chartering planes to fly them in ... that combined with trying to ramp up production as quickly as possible as well.

Q: So are we talking months here before there's a surplus in the stores?

A: Well, I think that's really going to be a function of the demand for the product. ... I think we are going to be selling out of the product very quickly. Hopefully we'll replenish it very quickly as well with the weekly shipments. But ultimately, when we have a situation that the consumer can walk into retail and pick one up remains to be seen, basically.

Q: There are rumblings out there among people waiting for the PS3 that some stores won't be able to fill their pre-orders because allocations have been moved between retailers. Is there anything to that?

A: We've always allocated our products to our retail partners in a very fair way and also a transparent way. We don't favor one retailer over another.

Q: There was a price break on the cheaper PS3 model in Japan (the price was cut from about $500 to $400). Is that something we can expect in the United States?

A: We see no need to adjust the pricing at this point in time.

Q: What is the bottleneck in production?

A: I think it was well publicized that we had some issues initially with laser diode production (used in the Blu-ray disc player). Those issues have been ironed out, but with any component, whether it's laser diodes or anything else, you do have a ramp-up period. You suddenly can't go from zero one day to 100,000 units the next day.

Q: How do you feel you're positioned vis-a-vis the competition?

A: We have a long-standing history of providing a stable platform that the consumer can enjoy for many, many years. ... It's really all about making sure that you have content that's fresh in the eyes of the consumers, month in and month out. That strategy has worked very well for us in the past, and we're going to continue on that strategy.

When we introduce a product, we introduce a product that's going to be relevant for a very long time, we don't suddenly leave the other, older console twisting in the wind, which seems to be a strategy some of the older companies go through. ... We have many more years to go with the PS2, we're not suddenly dropping support for that platform.

Q: There have been some complaints in Japan that the PS3 had problems playing some games from the older PlayStations. Is that something that can be fixed?

A: Just to put it in perspective, I think there are probably 8,000 titles out there for the PlayStation 2 on a worldwide basis, and the vast majority of those titles will play on the PlayStation 3 right out of the box. ... The beauty with the PlayStation 3 is that you can always have the firmware [the console's underlying software] updated as you connect the PlayStation 3 on to the Internet. As we go through these upgrades, one of the things we want to do is make sure that the percentage of compatible games goes higher and higher.


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