Gaming console vendors need broadband providers and television manufacturers to lower prices on their products to help gaming grow on the Internet, said Kazuo Hirai, president and chief executive officer of Sony Computer Entertainment America Inc.
Hirai, speaking at a Congressional Internet Caucus event in Washington, D.C., Tuesday, called on broadband providers to reduce prices as a way to drive more U.S. residents to broadband and drive more interest in console gaming through the Internet. Television manufacturers can help spur interest in console gaming, he added, by pricing high-definition television (HDTV) sets in a range that’s affordable for average U.S. residents.
With the average monthly cost of broadband, about US$40, a customer could buy a new PlayStation 2 game every month, said Hirai, whose company sells the PlayStation consoles. “(Broadband) has got to be available for an affordable price,” he said. “Forty dollars for broadband gets you just the pipe. You’re not getting any content.”
Hirai then corrected himself, saying free Web sites do provide content, but not “compelling” interactive content like games. “We’re going to hold up our end of the bargain in providing compelling content,” he said.
The gaming console industry also needs help from television manufacturers, he said. Future versions of gaming consoles will be able to provide HDTV-ready games, but the popularity of those kinds of games will depend on HDTV set prices, Hirai said.
Although Hirai was speaking to an audience made up largely of congressional staffers, he avoided talking about legislative approaches to gaming. Protecting copyrights will become increasingly important to gaming companies as more people subscribe to broadband service and can share software quickly, he said, but he stopped short of advocating legislation solutions to copyright protections.
Hirai also addressed a long-time criticism from Washington that video games are too violent by saying 85 percent of video games sold are rated “E” for everyone or “T” for teen.
Instead of focusing on legislation affecting video games, Hirai stressed the growth of the video gaming market. Sales of video games and related hardware was about $10 billion in the U.S. in 2000, rivaling the box-office receipts of the movie industry. About half of all U.S. residents ages 6 and older play video games, he said, and the average age of a U.S. gamer is 29, not a teenager, as is the misconception, he said.
Sony has sold 100 million PlayStations since the console was released in Japan in 1994, and 70 million PlayStation 2 units since it was introduced in 1999. About 30 million PlayStation 2 units have been sold in the U.S., and about 10 percent of U.S. users have purchased network adapters that allow them to play games online.
The U.S. leads the world in adoption of network-enabled PlayStation 2 units, with 78 percent of network-enabled PlayStations in the U.S. But about a third of players continue to use network adapters with dial-up speed connections.
Hirai predicted the video game industry and broadband providers would be able to feed off each other, as the availability of more online games drives more gamers to broadband, and the availability of inexpensive broadband creates more gaming customers. Sony’s vision for an online business model is based on microtransaction — gamers paying small fees for added content or levels in games — instead of the per-month subscription charged by many PC-based online games, Hirai said. Console gamers, who play most online-enabled games for free right now, need to see a tangible benefit for paying online fees, he said.
“The jury is still out on how much revenue can be generated (online), especially with this generation of hardware,” Hirai said. “For the next generation console, online is going to be like air conditioning in a car. You’re going to need it.”
No matter what business model console makers work out, online gaming is the future of consoles, Hirai added. “Interactive entertainment … is already huge, and has the potential to get bigger,” he said.
The Congressional Internet Caucus is a group of more than 170 lawmakers interested in educating their colleagues about the promise of the Internet.
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