Andrew House - Part One

We should forget that we've always had an in-built advantage with PS3 from the start, which is the availability of Blu-ray out of the box. I've always been a big proponent of that as part of our feature set.

I think it's part of the proposition that gains value over time and I it's really important in this generation that people see more and more value being built into the console that they purchase - whether it's via the Network, additional services, the growth of the Network and the number of people with whom they can interact, or the fact that Blu-ray is there and available, and more and more Blu-ray content is becoming available regardless of the Video Delivery Service.

The key point is really to give the consumer as many options as you can. They've shown us that there's a tremendous hunger for content in standard-def, short form, long form and hi-def - but our responsibility is to make that available in the most convenient way, and the most price-competitive way, that they want to consume it.

I think it's a huge differentiator, because it puts us in a spot where we really are the only company I can see out there that's giving a really robust living room-based hi-def solution, but there is also an option - seamlessly - to bring that across to a portable device, and one that's really well set-up for video- and long form content-viewing in standard definition.

So yes - it's a big differentiator for us, it's a unique place that we're able to offer in the market place.

I think that clearly the mass market DVD penetration is going to take some time to reach, but the signs are already emerging. If you look at some of the releases of content which you'd particularly say is going to appeal to PS3 users - Transformers, for example - those kinds of releases are really over-indexing in terms of the percentage of packaged media sales that are going to Blu-ray as opposed to DVD. In some cases they're really surprising.

For those movies it's really starting to be a substantial piece [reports place first two weeks for Transformers at around 22 per cent on average market share for Blu-ray] and I think that's saying that PS3 is starting to drive Blu-ray amongst an early adopter entertainment audience - not just a gaming audience.

That reinforces, for us, the strength of the PlayStation 3 proposition, and I think we're starting to get to the point where there's a virtuous circle that's being built - I think that gives PS3 significant momentum for the next year onwards.

I think what's been essential though is that we've always wanted to get to a point where that value proposition is one that can be embraced by a much wider audience, and clearly with something like a 300 per cent growth of sales for PS3 since the new model was launched... clearly the consumers are voting with their feet and saying that at that price point it's a great value proposition and I'm going to buy into it.

I can't quantify for you exactly how much Blu-ray plays into that discussion, but I would bet that it's a significant part.