Sony on the new PS3, Vita sales, the decline of 3D and the threat of the Wii U

Yesterday Sony launched a new, lighter, slimmer PlayStation 3 just in time for Christmas. The PlayStation 3 super slim, or the super duper slim as Bertie called it during our live report of Sony's Tokyo Game Show press conference last week, comes in two flavours in the UK: a mammoth 500GB edition (out now) and a teeny tiny 12GB edition (out 12th October). Sony doesn't set the price of its hardware in the UK (more on that later), but shops are live now with their offers (GAME has the exclusive on the PS3 500GB FIFA 13 bundle for £250).

But why has Sony revised the PS3 hardware yet again? And let's not forget the PS Vita, which by all accounts has sold terribly since its February launch. How's that doing? When will Sony cut the price? And what about those bigger memory cards? And where's 3D gaming gone? Sony used to love that. Now it's on the down-low. And what about the Wii U? How will Nintendo's new console impact PlayStation?

Armed with these questions we spoke with Sony UK boss Fergal Gara at Eurogamer Expo to get answers.

Why have you released a new version of the PlayStation 3?

Fergal Gara: It's always good to refresh your offer. And being able to make a lighter weight, new style smaller console has served us very well in the past. Most consumers have more than one box under the TV, so it gives them back a bit of space, certainly compared to the original PS3. Even power consumption.

So it really has been on a journey and come an awful long way from that 40-60GB format and little in the way of digital services and a very high price point at the time, to 10 times the disk size, 10 times the digital services and half or less the price. It's been quite a journey over the last few years.

Two models launch in the UK: 500GB and a 12GB. Firstly, looking at the 500GB model, what's the target audience for that one? What's the thinking there?

Fergal Gara: That is primarily targeted at a heavy game user or a heavy media user. We see tremendous growth in digital downloading of games and also the PS3 is positioned as a device which is great for storing movies and photos. So we're seeing increasing use of disk size among those segments of the market. There is of course a new generation or a new year's worth of new heavy gamers come into the market every year. So they're starting at the bottom of the scale.

Some people will buy it because it may come in useful or because they know what their habits are going to be and it's not a huge extra stretch to get to the 500GB.

In the UK a 12GB model launches later on 12th October. What's the thinking behind that one?

Fergal Gara: First of all, the entry price point is very important. We've got a very healthy technology market in the UK, but it's also very price conscious. So being able to get a lower entry price point for those consumers is important. There are a lot of PlayStation users today who don't use very much in the way of disk space, so it's just for game saves and the small bits of install that might be needed on individual games.

The clearest way to think about it is that's the perfect machine for Wonderbook: Book of Spells, that kind of audience. So we'll bundle the complete Wonderbook experience: PlayStation Eye, Move controller, the book and software. We're also doing similarly with Skylanders. Again, they're two family focused bundles. And that machine will do an admirable job for those consumers and more besides.

It's upgradeable with a non-proprietary drive, so a standard laptop drive. You need a cheap and cheerful little caddie just to support it but it's very upgradeable.

But also there's another segment who ought to be interested in that machine, which is those who have an existing PS3 and have a drive full of data. They can buy the 12GB and slot their existing drive in, so it gives an easy transition without having to buy another drive effectively in the 500GB machine, if you fancy the new styling and a little bit of a refresh on your PS3.

So, it's primarily targeted at casual users, but there is that additional attraction to 12GB for some segments.

There is an official Sony mounting bracket for connecting an external hard drive. Is that bundled with the PS3 or is it sold separately?

Fergal Gara: That's sold separately. If you buy the PlayStation disk drive for an upgrade you get the caddie, but the caddie will be sold separately and it's pretty cheap and cheerful. So you could for example decide 500GB is not nearly big enough for me, I want two terabytes. You could decide that and you could go and buy the Sony caddie and a two or one terabyte drive from another manufacturer and then you've got yourself not a 12GB but a 2000GB device.

But you need that caddie to be able to do that?

Fergal Gara: Yes. But it's a low price item.

Sony announced the price of both models for the Eurozone but not the UK. How does that work exactly? How do we settle on the prices we have here?

Fergal Gara: We find RRP means increasingly little in the UK. It helps in discussions like this because it gives some clarity of probably the worst price, the highest price you're going to see in the market. But really what we offer to retailers is a cost price. The question I often face is, where does it sit? The answer is the cost price to retailers of the 500GB will be very similar to that of the outgoing 320GB, but the cost price of the 12GB to retailers will be below that of the 160GB.

So we will see increasingly attractive prices for PS3 as we go into Christmas, and we will be working with retailers to help them achieve great offers at great times as we go into Christmas, and that will take different shape in different retailers, whether it's just the solus console or a console bundle configuration that works for them. We will see more attractive PS3 pricing this Christmas.

So you anticipate the price of the new PS3 will go down in the run up to Christmas?

Particularly with the 12GB you will see more attractive pricing than you saw last year with the 160GB. So getting into the PlayStation world will be better value than ever - Sony UK boss Fergal Gara

Fergal Gara: Particularly with the 12GB you will see more attractive pricing than you saw last year with the 160GB. So getting into the PlayStation world will be better value than ever.

The PS3 is nearing its sixth birthday. Is it now more about attracting more casual gamers? Have you reached saturation point with hardcore gamers?

Fergal Gara: Yes, but don't forget every year there's another chunk of the population that is another year older and they will enter the years when they want a home console. So there are always new people every year.

Yes, there's a certain amount of saturation among the core. But we've got a fresh new audience who are just growing up. We'll have converters who will either come across from being Xbox owners or who fancy the dual ownership, so there's some opportunity there.

But there's definitely opportunity as we've seen in past console cycles to broaden the market and bring in more casual users. The classic example in the PS2 era would be the SingStar generation. That gave a similar lease of life late in that life cycle.

So, I'm tremendously excited there's real energy in PS3 for multiple audiences, including the casual consumer who will find Book of Spells really appealing. But there are even new reasons to get into PS3 next year for the core, with The Last of Us and Beyond. So it's fantastic to see there's life in the machine. And its performance year to date echoes that. We're in a tough phase in the market, with a lot of doom and gloom out there. PS3 is holding up phenomenally well. We're very pleased it's got that robustness and momentum in its sales and still has appeal to new people.

How well exactly is PS3 doing in the UK?

Fergal Gara: The next few weeks are the telling weeks. It would be premature to give you a number right now. Let's say it's holding up very strongly and particularly in comparison to other home consoles now as we go through this year. That said, all of the big weeks are ahead of us. So it's more reasonable to take a view in January once we have peak out of the way. But I do feel we're in a strong position going into Christmas with the two new models and some exciting new IP that will stretch and broaden the market. For the core gamer we will align ourselves quite closely with third parties this Christmas rather than having so much ourselves, but we do next year. So there are still many reasons to come into PS3.

The Vita has been out in the UK for seven months now. What's your honest assessment of its sales performance? Has it met expectations?

Fergal Gara: I'd say it's done reasonably well, but I'm a sales guy and motivated by selling, so I'm never going to say we've done well enough. What's important is we've got great software now as we face into peak. We've seen it time and time again on Sony platforms and others' platforms: when you've got great software you can give it a great push.

So what we're doing now as we face into peak is really backing it hard with marketing money and backing it hard round those software titles. There's a great proposition for consumers to absorb. We've seen people hovering around LittleBigPlanet and Assassin's Creed: Liberation here at the Expo. It's a great example it's got every potential to do very well for the peak.

A lot of people are wondering about a Vita price cut. What's your thinking there?

Fergal Gara: We always aim to establish price cuts. So the question is not so much if, but when. We won't have an across the board price down this Christmas. But what you will see us doing is work very hard with our retail partners to add value to the product to make it more compelling. Even this week there are some tremendously attractive bundles out there, for example wi-fi Vita plus LittleBigPlanet at the £200 price point. There's the wi-fi product again plus FIFA 13 plus Uncharted Golden Abyss plus LittleBigPlanet at not much above the £200 price point. We will be working that very hard over the coming weeks as more and more software arrives.

So a price cut will have to wait until next year then?

Fergal Gara: Yes.

Have you thought about timing on that?

Fergal Gara: That's still under discussion.

I remember talking with you at the Vita launch about the proprietary Vita memory cards. There has been a call for larger capacity memory cards given you can download all the games on the system. Do you have plans to introduce larger memory cards in the UK?

Fergal Gara: We're certainly seeing download use with the Vita is a significant part of overall usage as a percentage of total volume - bigger than on PS3 actually. That's quite an interesting trend. People do understand it as a gaming iPod. It has some parallels there.

However the majority is still bought physically in store. Should we have bigger memory sizes? It's a good prompt. We did introduce shortly after launch the 16GB. I know there is a 32GB model in other territories. We should probably have a closer look at that to be honest and see should we get hold of the 32GB. That's a fair prompt.

3D gaming was a big push for Sony even last year. But it's been noticeably absent from E3, Gamescom and here at the Expo. How important is 3D gaming now for you? Have you seen the results you were hoping for?

Fergal Gara: Consumers decide how relevant it is. It's fair to say consumers have decided it's not hugely important at this time. It's a capability we've got. It may have a bigger life a little further down the line. It's great we can do it. It doesn't seem to be the most powerful USP at the moment, so you've seen us shift our effort onto fresh new exciting IP. I'm certainly really pleased to see the strength of that as we look into next year. We've seen a resurgence really with the strength of the output from the studio network.

What's the problem with 3D then? Is it the glasses that are a barrier? Will it have to wait until glasses-free 3D gaming is viable?

Fergal Gara: Whether you look at movies or games, wearing the glasses and consuming 3D in that way in the home isn't hugely popular. That's just a fact. I haven't read detailed research on it, but the glasses will certainly be a big part of the hassle factor. I also think there's a bit of a difference between the highly focused viewing and the more casual viewing. In the home people tune in and tune out a bit, and doing that with glasses on and glancing at your tablet or pausing for a bit, compared to the cinema experience which is a solely focused experience, you know there is a difference emerging there.

Consumers decide how relevant it is. It's fair to say consumers have decided it's not hugely important at this time - Fergal Gara on 3D gaming

How good will glasses-free 3D be? We haven't seen any killer technology land on the market yet that proves a must have, and I don't have a firm view on whether that will happen.

Nintendo is preparing to launch a new console this Christmas. Does that have any bearing on PlayStation? Does that factor into your decision making?

Fergal Gara: We respect Nintendo as a highly successful competitor. Of course we will watch what they're doing with interest. It's a very interesting product they're bringing to market. I don't have a clear view on how successful it will be. And to a large extent it doesn't matter what I think. It matters what the great British public think. So we will see.

They certainly laid a broad church in terms of the list of features hopefully trying to have a broad appeal in the device. I don't think there will be huge volumes in the market this side of Christmas. I think they will pull in early adopters. It's probably one to be concerned about far more and watch more carefully into next year. But we feel very confident that in the PlayStation and we won't be going after the same niche early adopter market they'll be going after this Christmas. I think we're sitting in separate camps at this stage, so it won't be head to head.

If they gain real traction next year it becomes a more important factor in the mix. They've been a very key player in the market overall as you well know in recent years. So we have to respect that, watch that and do our best to compete with that.