Needs to arrive and the discipline around building the game and managing that flow is super important. Okay, so my next question is about exclusivity. Should we keep them? Should we release our game on all platforms? Xbox is taking this approach, like on PlayStation for example. And on the other side, we've seen PlayStation toy with the idea but never fully commit. We've had Lego Horizon on Nintendo Switch and PlayStation games on PC, but now it seems they are backtracking. So, what's your view on exclusivity in today's market?
There's been a lot of misunderstanding about my decision to put a game on PC five, ten years ago. Exclusivity is very important to a platform business. That's how you differentiate. If you want Zelda, you go to Nintendo. If you want Mario, that's where you go. PlayStation did exclusivity throughout PS1, PS2, PS3. That was the standard. We had Japanese companies exclusive to PlayStation through our relationships. If you want to play Jack and Daxter or Ratchet and Clank, you have to come to PlayStation. That's the deal. Moving into PC or multiplatform releases are two things. The PC thing was not to make money, but to get my intellectual property in front of people who wouldn't normally see it. How do I get the Horizon world seen by people not in the PlayStation world? Not necessarily to sell PlayStations, but to expand mind share for other media like films, TV, comics. If you have a massively multiplayer online game or live service game, especially free-to-play, you have to be multiplatform because the economics don't work on one platform. It's about the size of the funnel. If you get 3% conversion, it has to be 3% of 50 million, not 3% of 5 million.
But why do you think PlayStation seems to be backtracking on games on PC? The information that has leaked is that they feel it's devaluing their IPs. Contrary to what you said, what do you think? Are they right to backtrack? Isn't opening PlayStation actually the future? I can understand the other point of view when they say it's devaluing the property and people are not buying PlayStations because they can have our IPs on PC.
First of all, the games don't go on PC for like a year, 18 months. It's not day and date. If they think a game coming out 18 months after its launch on another platform somehow stopped a sale from happening 18 months ago in the hardware business, I'd like to see how they can prove that thesis. I don't think that's true. If someone is waiting 18 months for a game on PC, they weren't going to buy the hardware anyway. It's a way to cover costs and the burden of making a port. I don't know what they're thinking.
It's very interesting to see how the strategy can change with the people in charge. We saw how it changed with you, Jim Ryan, or Hermen Hulst. One way to solve the question of exclusives is to make the industry compete on content going forward, or get behind only one type of hardware like DVDs, VHS, toasters. I remember Sony had Betamax, but everyone went to VHS. I think getting everyone behind one type of hardware can devalue the market. Not everyone has the necessary internet speed for content-based gaming. We see people going back to vinyl, cinema for the experience. What's the middle ground for video games? I think we can see PlayStation, Xbox stop making consoles after the next generation. Is there a middle ground? I don't think in 10 years everyone will have the necessary internet speed. Even in France, not everyone can play on GeForce Now or PS+ cloud gaming. So there has to be a middle ground between content-based and hardware-based gaming.
Well, you look at the hardware situation. The gaming industry is about $220 billion, making it the biggest entertainment revenue driver in the world. But it's still a small fraction of the population involved in gaming. If you ask 10 people their favorite song, you get 10 answers. Favorite movie, 10 answers. Favorite game, maybe 6 answers. Our revenue is the largest, but our social impact is the smallest. How do we increase the number of people in our world? One limiting factor is that you have to buy a special piece of hardware from one of three manufacturers. You talk about VHS and DVD. Those blew out when they licensed the format. You could get a cheap or expensive player, but they all carried the same standard. The gaming industry needs to reach that same consortium where manufacturers agree to a standard, like they did for CD, DVD, Blu-ray, and then allow different companies to manufacture game players. That's when penetration rate goes up. That's when people who normally wouldn't be into gaming might buy a media disc player that also plays games. Theoretically that's correct, but practically it probably won't happen because human beings and companies are what they are. But to have the penetration rate of a toaster, we have to do something like that.
I think you had one other question before... Yeah, we have to talk about live service games. You've stated in the past that it was part of the reason you left PlayStation in 2019, the growing of live service games. We saw today that a lot of studios are closing because of many attempts to do successful live service games. I want to talk about Bluepoint Games. I'm really sad about the end of that story. What do you think about Sony's decision to make them go for a live service game? What can we do to stop the closing of studios? They were so good at remaking games, then poof, disappear.
I have no insider knowledge on things that happened after my time. I had a great relationship with Bluepoint. We worked together on Demon's Souls and Shadow of the Colossus. I don't know how they ended up, but I will say this: live service gaming is not just a genre, it's a whole different mindset around game development than building single-player narrative games. I said this before I left the company: asking a studio to move to live service is like saying to the Golden State Warriors, 'Why don't you go win the baseball championship?' It's a ball, how hard could it be? To make a live service game successful, it's not just the dev team or the game itself. You have to manage the economy like a government. You have to continue to work with the users. It's an entire economy of its own. It's not just launch and then build the next game. Certain teams know how to do it well, but many don't. A lot of companies felt Fortnite money and said, 'You guys go build me something that's going to get me that.' But remember, Fortnite was a $60 game for about three months, then Epic was going to shut it down, and they ripped the battle royale piece out and made it free-to-play. Setting out to break into the live service market is super complicated. Most people can't win. At any given point, there are probably only five or six successful live service games in the world. You can't play a lot of them because you only have 24 hours a day. There's a switching cost. If all my friends are over here and I go over there, I'll probably go back. It's very complicated and difficult.
If live service causes problems, AI is causing many kinds of problems. I think you've seen the Nvidia videos with DLSS 5. How do you view the risk the industry is facing with AI? How can we keep true to the vision of creative teams in a world full of DLSS 5 fueled games? That's my main worry for today's gaming.
I don't think it's very good. Most of the AI slop I've seen, whether videos or interactive videos that aren't really interactive, doesn't give me much cause for concern. I'm the old guy who won't be alive when this happens, but I see it for what it is now: a party trick. When you start to interrogate it, it falls apart quickly. Games aren't movies. The complexity around building a great game is well known because so few do it right. Nvidia just slaps a filter on everything, so everything looks the same. There was a time when Criterion released the RenderWare engine, and you could tell a game was RenderWare just by the way it looked. With Nvidia's technology and what Google is doing, it doesn't hold up to scrutiny. It makes interesting three-minute videos, probably not much more. People getting behind it are doing so for the wrong reasons. I think it'll burn up a lot of money, energy, and water. Money that could have gone to building a good game is going into these technologies, which is just setting dollar bills on fire.
We're nearing the end, so we have a few positive questions. One is about handheld gaming. We think that technology is bound to make a comeback. Looking back at the PS Vita, which is my favorite console, is there anything you would have done differently to keep it alive? I think maybe if we had a Monster Hunter game on the device, it would have been more successful. Monster Hunter Portable 3rd sold five or six million in Japan only. That's one of my main regrets. Is there anything you would have done differently?
When I was CEO of PlayStation Japan in 2007, Monster Hunter on PSP saved my life. I was trying to sell PS3 for 60,000 yen, which was impossible. But Monster Hunter came out on PSP and I punched through all my PSP targets thanks to Capcom. I have a soft spot for the Monster Hunter team. What I would have done differently: instead of the Vita, we should have made a PSP 2. We just wanted one more analog stick. The PSP only had one stick. For the next generation, we wanted two sticks, and we got the Vita with two sticks, OLED, which was very expensive. The back touch was a weird thing that many people couldn't get their head around. The biggest strategic mistake was the proprietary memory stick. By the time Vita came out, everyone had a drawer full of SD cards from cameras and phones. But we forced them to buy another proprietary expensive memory stick. Those were product planning mistakes. I still carry my PSP Go in my bag. I play Everybody's Golf on it. It's the perfect game for that format.
