2012: We Only Do Everything

What's important there is that income, a very big percentage of that goes to the publisher and, more importantly, if the game was pre-owned that money goes to the publisher from the new consumer again. You can create in theory 100 per cent revenues when that game goes around half a dozen to a dozen times. One of the things that was pretty unforgivable that this industry did to platforms like the Dreamcast, they were killed off by the press saying it had been killed off. Actually it was a good platform. The real problem which wasn't really said was the track record at Sega where a number of machines weren't really released into the market properly, like the Saturn. And other machines, including Sega's greatest that was never released, the Neptune. Which was frustrating.

I wonder if it's a different story now in the dedicated handheld market. With the 3DS seeing the impact of lowering prices and the increase in quality in mobile gaming, I don't know if that's contracted in terms of revenue in the overall handheld market.

If we include iOS in the overall handheld market, which we absolutely have to, it's continued to grow. iOS has chomped into Nintendo's space in a very big way. Would I rather spend £1.99 for a game rather than £30?

Whichever way you look at it the games market is still growing - it's just fragmented. To go back to the original question of how affected are we by the wider economic crisis, yes, retail sales of games are down. Is that because of the economic crisis? Yes, part of it is. But it's also partly to do with other forms of content delivery being available.

It is slowing adoption of new kit, that would be my guess. In terms of how many people will buy new iPhones and iPads and how many are buying add-ons like Move and Kinect at Christmas. It's a big purchase. It affects sales of something like Disneyland Adventures because we're appealing to those that have an Xbox and Kinect and want the game. But of all the industries we're probably the least affected. One of the things we don't see is the TV industry is really badly affected. The eyeball time that the games business is taking is going up and up and up. It's taking people's entertainment time and the TV time is used with things like iPlayer.

It's really difficult to quantify the decline or increase in interactive use because most of the new consumables are privately owned or they're not charted. You can't find out how many people downloaded things or how many virtual goods were sold on Facebook or how many subscriptions Moshi Monsters has. The audience for Moshi and Club Penguin would have been playing PSone Crash Bandicoot years ago. It's very difficult to quantify what's happened but it has grown. We've always said this industry is recession proof because in comparison to going to the movies or the pub it's actually pretty good value.

Hollywood grew incredibly during the '30s because of the recession. That was when it went from being relatively small to being a major industry.

That's interesting. If you look at how Hollywood competed with TV in the '50s by bringing out these huge biblical epics with casts of 1000s, and 3D, and then it responded with the growth of indie films in the late '60s and early '70s with the Scorsese and Coppolla movies. I wonder if there's a parallel there with the games industry.

The issue is you can choose to make a Ford or you can choose to make a Lamborghini.

World of Tanks is a good example. It all depends on platform. It's difficult to do those things now on PS3 and Xbox 360 because the way the monetisation strategy works is you've got to be able to get people who either will spend a small fee or those that will spend a massive amount. With one price point you miss out on a huge spread at the lower and higher scale. Unless we get the ability to be able to have free and $1000 purchases in one game on consoles we won't be able to satisfy the consumer.

If you look at Modern Warfare 3, the $100 edition, that is essentially doing that. The thing that seems to matter is you get a different badge on your online identity, which literally cost the developers nothing.

But these are only baby steps in relation to other things that are being done in different parts of the games market. That $100 is paid once. Some people will pay higher prices and that will fund the development of a game for a niche audience. I feel bad about how much time I've spent in Modern Warfare 1 online. I probably played that game for a year and I spent $40 for it.

The Sword and Sworcery developers made a game they knew was only going to appeal to 20 per cent of players but they made the best possible game, tailored from the art style to the music style and it was a massive game because so many of that niche audience bought it.

Oblivion was the first mass market men-in-tights game in my opinion. Before it was off-putting to a lot of people but Oblivion has so much in it. It had a pretty atrocious treatment of first-person gaming, as did Fallout, but you forgive it because it's such a broad and rich game.

What I found more stunning was Dark Souls and the fact it sold 1.5 million units. I played Demon Souls all the way through twice and I cracked my PlayStation controller. But because it's such a tremendous sense of peril and dread you go back.

What do you mean by pure?

Isn't that the iPad?

My wife uses her iPhone mainly for making calls, imagine that.

All smartphones are computers that do phone calls and we forget that because the phone component is never that good.

I'm really interested to see how the Vita goes. As an ex-Sony guy I still have a lot of loyalty to Sony and it's a lovely piece of kit with a brilliant display. The people I know at Sony are very bullish about it. We have times when we all called it wrong. I thought the Wii wouldn't succeed.

The price is going to be a big factor but also the way the younger generation use mobile devices is also very different to how we're used to. The fact it isn't a phone may not be such a bad thing - you can still message on it. And it's got Skype. So presumably you can make calls with a headset. The price is the big obstacle but the real question is whether it will come life when it's got rich software on it and whether it becomes seen as the device to have. The danger is, with the PSP it was a pig to carry around because it was too big, especially when you're carrying a phone around as well.

The only reason people will buy it over another device is if the games are better and it can demonstrate you can get a gaming experience there that you can't get on any other gaming platform, especially at the rate that other platforms are increasing in terms of quality and power. That's going to be the hard point, as Vita launches will it be seen as cutting edge?

The price of the games means there will only be a few bought. Is it a kids' device, a 20-something's device? If it's for the over 20s that market has quite a lot of disposable income and with the recession as it is people are less-inclined to take risks.

You could package the Vita up with that sort of deal, bundle it with a phone, that happens with the Xbox 360.

Another interesting point is we haven't seen rental come to our market other than for games. Rental of devices in other fields where you get the device. It used to be standard for BT phones and for TVs, but not for games consoles - why is that?

Is it because there's an expectation that over time the cost of purchase will come down, so that makes a rental contract less appealing? Presumably you'd be locked into a rental for 18-24 months and by then the cost of the device is significantly less.

Maybe that's an idea. You get your PS Vita and pay a subscription for it and you get usage of one or two games that you can swap in and swap out. You join a club for £15 a month and you get really top games for that. And you get hire of the hardware. And then it's much more like an app store where you have to get your games through Sony. Because there are going to be fewer retailers so platform holders won't worry so much about pleasing retailers.

I think that's a workable business model.

That is the issue. Console manufacturers can't afford to piss off the retailers otherwise they won't have anywhere to sell the hardware.

There's also High Street space because mobile phone shops would lap that up. If you look in a phone shop window it's just display cases and nothing else.

It would be a bit like a Sky subscription with telephone, internet and TV in one, but you could have a small mobile phone with a contract, and then it's packaged up with the Vita and a subscription to games.

And you could have tick boxes to add to the contract. Add the PS3, add the PlayStation 4, which again is the way Sky does it...