Sony Sues Datel Over PSP-3000 Hacking Tool

Sony Computer Entertainment Europe has taken legal action against UK-based peripheral maker Datel over an accessory that would have allowed illegal and homebrew software to be run on the PSP-3000.

Encryption on the newest PSP model has proven much harder for homebrew enthusiasts to break, and Datel began advertising a battery-attached solution called the Lite Blue Tool in November.

The product was never released, but instead repurposed as a differently featured replacement battery called the Max Power Digital.

Since the device breaks the PSP-3000’s security encryption, Sony has continued to object to the Lite Blue Tool. A Datel spokesperson told website Portable Video Gamer that orders for the Lite Blue Tool could not be fulfilled “due to legal action by Sony Computer Entertainment Europe”.

Legal challenges to reverse-engineered hardware products have been relatively commonplace throughout the history of the games industry, most notoriously in cases involving Nintendo and the original Atari, and between Nintendo and Codemasters’ Game Genie device.

Piracy and homebrew has been a particular problem for Sony on the PSP, whose strong hardware sales have never been matched by similarly-high software sales. When the PSP-3000 model first launched in October 2008, Sony described piracy on the on the hardware as ‘trending downwards’ shortly thereafter.

In-Depth: Sony’s Koller Talks 50 Million PS2 Sales In North America

If 2008 proved one thing, it’s that the PlayStation 2 is still an important part of Sony’s lineup. The system provided a nice financial cushion in the face of the money-gobbling PlayStation 3, with significant sales that saw it finish ahead of the Xbox 360 for much of the year.

Despite much higher revenue numbers for next-gen hardware and software, Nielsen data shows that gamers collectively spent more time with their PS2 than with nay other console.

And yesterday, Sony announced that the console has reached 50 million units sold in North America. On the day of the milestone, Gamasutra spoke to John Koller, director of hardware marketing at SCEA.

“It’s a bit of a self-fulfilling prophecy; as it continues to sell, development continues, and consumers continue to buy,” says Koller. “There’s such a wide range of entertainment experiences available that I think it would be very difficult for people to complain, ‘this console doesn’t have anything that appeals to me’.”

According to Koller, CEO Jack Tretton believes “the only way to kill the PS2 business is to stop supporting it.” Though unwilling to reveal any key games, Koller says, “With the lineup for 2009 and 2010, the PS2 is not going away anytime soon.”

Defining the Keys to Success

How does the success of the PS2 compare to the original PlayStation? Says Koller, “The PS1 was obviously very successful in its own right and did mid-30 millions… [But with the PS2] back in 2000, that was a time when we were able to garner a lot of software support as well as create the value in the box that consumers are really asking for.”

According to Koller, the initial keys to the PS2’s success, which laid the foundation for its continued sales, include the then-advanced technology in the box.

In addition, the system’s “dual role” as a game console and DVD player, and its “incredible software lineup” helped birth a system which, by 2009, features over 1800 games in North America — with 130 released in 2008.

2009: The PS2 Market Position

But as time has marched on from the system’s October 2000 launch, “We’ve obviously had changes in who’s purchased the system… as we’ve gone along we’ve had various demographics entering into the marketplace,” Koller says.

Today, the PS2’s core demographic is “young families and lower income play,” says Koller. “I think right now we’ve really focused heavily on two particular types of gamers: the first being the social gamer, and the second being the sports gamer.”

“We’ve made a lot of focus into the family-friendly type gaming environment,” he adds, “and also being able to promote the overall value of the system to a lower income family.”

“This could be a family that may have lapsed from gaming, or maybe is new to gaming and wants to provide to their children an entertainment value that really surpasses what they would get from a vacation or a dinner out in these tough economic times.”

He noted: “We’ve been able to successfully target that demographic and have sales well into the ninth year of the life cycle.”

How does it compare to the rest of SCEA’s hardware lineup? “The PSP, from a handheld perspective, it’s more of a 13-17 year old [demographic], multi-ethnic, a bit lower-income as well. The PS3 is still in its early adopter phase, tech-oriented consumer… they’re interested in the multi-functionality of the system.”

SCEA’s Bottom Line: How Does PS2 Fit In?

Though Koller was unwilling to discuss specific numbers, Koller says that the PS2 is a “positive margin business, and a significant contributor for us.”

When quizzed on how the PlayStation 2 contributes to SCEA’s bottom line, Koller says, “The PS2 fits neatly into [our business] for a variety of reasons. The first is the demographics we talked about, we’ve been able to parse who buys what console. We’re religious about that here at Sony.”

“A lot of what is important now, is the tie ratio of software to hardware, and that tie ratio is significant… it goes anywhere from 11 to about 20 in terms of that tie ratio, so you’re looking to everyone doing well there.”

Claiming that almost 25 percent of 2008 NPD TRST sales came from PS2 game sales, “the PS2 consumer is still actively purchasing games. Greatest Hits, in a tough economic time like we’re in now, which has a proven value message, at $19.99.”

What 2009 Holds For PS2

According to Koller, the system’s 2009 software lineup is “still fairly significant. We’re tracking mainly social games and sports games, but there are a few outliers as well. In general I think the consumer’s going to be very pleased. I think we’ll see that tie ratio increase.”

But what about the console’s pricing, which currently stands at $129.99? Though retailers have called for a drop to $99.99, Koller doesn’t think it will happen anytime soon.

“We’ve looked at a variety of options, and I think we’re pleased with where we are; it’s a significant financial contributor for us and it sells very well at $129.99. We’re comfortable with the current price.”

Even for publishers that have shifted the majority of their development resources to next generation games, Koller says, “As part of their portfolio the PS2 is still important.” Keeping publishers engaged with the platform over the course of 2009 is something SCEA actively pursues.

“We’re on regular road shows, talking to each publisher to discuss the merits of continuing to develop for the PS2. We end up discussing demographics, and where the hardware is being sold and to whom. Little shifts in ethnicity and age range, and gender is very important to them.”

Is it possible to expand the PS2’s audience beyond what it comprises today? Koller sticks with conventional wisdom, here: “I think the social area is a really rich area right now. Overall we really look at the Guitar Heros and Rock Bands of the world to really try and grow those areas.”

The Sony exec concludes: “You look for an opportunity for a family to become involved as a family. We’ve spoken with developers on how to engender total family play — retail is telling us how important it is.”

Sony Touts Value Alongside Competitors ‘Peddling Add-Ons’

 

In a new PR salvo claiming the PlayStation 3 as the “true winner in delivering total value and price,” Sony compared its console’s features to Wii’s and Xbox 360’s, accusing its competition of “peddling add-ons.”

A new press release from the firm claims that the PS3 provides the most features and functionality out of the box, while the Xbox 360 requires “additional money, multiple upgrades and additional external devices, putting a burden on the wallet and adds clutter to the entertainment center.”

On the other hand, regarding Nintendo, the company claims the Wii’s “lack of enhanced features comes at the expense of a comprehensive entertainment solution.”

Alongside the press release, all three systems were included in a feature comparison chart that emphasized the PlayStation 3’s out-of-the-box offerings, including its Blu-ray Drive, built-in WiFi, free online gaming service, and 80GB hard drive.

Sony argues that consumers would have to spend around $449 to $499 for the same features on the Xbox 360, while the lowest-priced PS3 model is only $399. The company also repeated its goal of providing “ten years of value with a future-proof system” via firmware updates.

“As PS3 continues to evolve without the need for additional parts or expenses, expect the competition to continue peddling add-ons in an effort to keep up with the Jones’,” concluded the company.

Sony’s Reeves: Profitability Is First Goal For 2009

Once Sony tackles its profitability struggles, it can focus on games and new services for the PlayStation 3, says Sony Computer Entertainment of Europe president David Reeves, who notes that making money is short-term priority one for the console.

“The most important thing for us as a company in the very short term is for us to start making money,” Reeves says as part of a new UK PlayStation.com article.

Reeves also suggests the goal is within reach for Sony: “This is a pledge that was made last March and is something that we are still very much on target to achieve.”

“Once we have achieved this, I think it will be a very exciting time for PlayStation. Once we have alleviated that specific pressure, we can move forward at a rate of knots.”

In a weblog post rounding up the hopes for 2009 of various Sony executives and PlayStation 3 developers, Reeves says he’s most looking forward to the release of Guerrilla’s Killzone 2 and Quantic Dream’s Heavy Rain, “whilst we have the music and video download service becoming available towards the end of the year.”

Reeves also anticipates PSP titles to “take full advantage of the new enhanced screen,” while Sony Worldwide Studios president Shuhei Yoshida, in the same article, calls 2009 “the year of big, exclusive PS3 titles”, referencing games such as Killzone 2, inFamous, Heavy Rain, MAG and virtual pet sim EyePet.

Report: Sony Considering Major Restructuring?

Sony may be about to institute a significant new restructuring campaign that could see job cuts and and reorganizations — or closings — of a number of high-profile divisions.

Citing only unnamed “company sources”, the UK Times Online reports that Sony Group is braced for a ’sacred cow-slaying’ that will also include major job cuts.

The measures are expected to be announced in detail in February, after the Consumer Electronics Show (CES) this month, but there are no specifics on whether major video game-related Sony divisions might be affected by the potential changes.

Sony’s Japanese operations, which have been adversely hit by the strong yen, are expected to be the most heavily affected, with new factory closures alongside the shuttering of what The Times describes as “several major divisions”.

The company recently cut 8,000 jobs — 4 percent of its global workforce -– and announced plans to close several manufacturing plants, reduce investment in electronics and increase the use of outsourcing.

Analysts have said a major restructuring at Sony is overdue lest the company widen losses and fall further behind its rivals. Credit Suisse analyst Koya Tabata has said that the company’s research and development should focus on software, not hardware.

In the latest report, Tabata suggests Sony Corp chairman and CEO Howard Stringer should be given further organizational control in order to compete.

“The most important thing is that, to improve organizational strength in the areas of development, purchasing and marketing, it will be necessary to further concentrate power in the hands of [CEO Howard Stringer],” says Tabata.

“Unless this is achieved we believe [Sony] will be unable to close the gap with competitors such as Apple and Nintendo.”

[UPDATE: Reuters has received a statement from Sony Japan spokesperson Atsuo Omagari denying the reports, and officially commenting: "We do not plan to announce additional restructuring measures at this time... we don't have any such plan."]

- Sony: PSP Piracy ‘Trending Downwards’

Software piracy for Sony’s PlayStation Portable handheld is on the decrease, according to claims made by John Koller, Sony Computer Entertainment America’s head of hardware marketing.

Piracy on the PSP has always been particularly prevalent, with the system’s memory card slot making installation of counterfeit games relatively easy — though multiple operating system updates included with PSP games have tried to lock out pirates.

The piracy problem is potentially a factor in the generally low software sales of PSP titles, which are far below what might be expected from the otherwise strong hardware sales in some territories.

Sony has never denied the problem, but speaking recently to consumer website MTV Multiplayer, Koller said that piracy on the PSP has decreased over the last few months.

“It’s trending down right now — we’ve seen the piracy not be as such prevalent in the last month to two months,” said Koller. “But it has been a problem for us.”

No specific reason was given for why the problem should have decreased recently, but Koller suggested that Sony closely monitors piracy websites. “We’ve noticed there’s kind of a ‘good vs. evil’ battle that we track on many of the forums and many of the pirated web sites,” said Koller.

“There’s certainly people that are standing up and fighting for what we consider the good side, the rights of developers and publishers to make money on their IP,” he added.

“And then there’s certainly the other side that believes that they can take as warranted. It’s kind of been nice to see other consumers going and help and fight the battle for us.”