Can Gamers Force Cheaper Broadband?
WASHINGTON -- Gaming console vendors need broadband providers and television manufacturers to lower prices on their products to help gaming grow on the Internet, says Kazuo Hirai, president and CEO of Sony Computer Entertainment America.
Hirai is calling on broadband providers to drop prices as a way to drive more U.S. residents to broadband and promote interest in console gaming online. And affordable high-definition television sets (HDTV) are a good place to start, he said. Hirai spoke at a Congressional Internet Caucus event here Tuesday.
For the average monthly cost of broadband, about $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, noting that free Web sites offer 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 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 prices--and sales--of HDTV sets, 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 get broadband service and can share software quickly, he noted, but stopped short of advocating legislation solutions to copyright protections.
Hirai also addressed a long-time criticism from Washington that video games are too violent. Eighty-five percent of video games sold are rated "E" for everyone or "T" for teen, he said.
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 box-office receipts in the movie industry. About half of all U.S. residents ages 6 and older play video games, he said; and the average 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 so they can 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 connections.
Hirai predicted the video game industry and broadband providers will be able to feed off each other. The availability of more games online will lure more gamers to broadband, and inexpensive broadband service entices more gaming customers. Sony's vision for an online business model is based on microtransactions, small fees for added content or levels in games, instead of the per-month subscription that many PC-based online games charge, Hirai said. Console gamers, who play most online-enabled games for free 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 settle on, 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.