Reviews - Updated on April 8, 2022

It’s rare for a company to break into the market with a product as successful as the first PlayStation. What Sony worked on with Nintendo in the late 80s turned into Sony’s own product, conquered the Japanese market in 1994, and later went on to conquer the rest of the world. In March 1999, Sony reported over 54 million consoles shipped, and over the next 12 months, that number rose to 70 million.

However, the success of the first PlayStation did not mean that launching the second would be easier or require less work. As the PlayStation 2’s release date approached, Sony’s management was getting restless. All these people have been working in the industry for many years and they perfectly understood that anything could happen in the end. About how Sony branches on different continents were preparing for the launch of the console and what they faced after its release, GamesIndustry.biz journalists talked with former company executives.

Looking for an audience

“The same thought never left my head: if the PlayStation can be called a good idea, then the real confirmation of this will be the release of its successor, which will perform on the market in the same way or even more successfully,” recalls Chris Deering (Chris Deering), who was then President of European Sony Computer Entertainment (SCE). Before his departure from Sony in 2005, he devoted more than 15 years of his life to the company – perhaps fate would have turned out differently if the Japanese giant had not bought Columbia Pictures in 1989, where Dearing headed international marketing.

“After the success of the PlayStation, everyone was in a state of euphoria,” adds Jack Tretton, who joined Sony’s US division in 1995. We have already set the bar high for ourselves, but all our expectations have been exceeded. Preparing for the PlayStation 2, we were confident in our abilities, but at the same time, the feeling of anxiety did not leave us – it is very rare that the leader of one generation holds the same position in the next. We had to make sure that success did not blind our eyes and that we would put even more effort into the next generation.”

The target audience for the PlayStation was very broad, with TV showing goofy commercials like Society Against PlayStation aimed at kids and teens, and magazines running controversial WipEout ads featuring young people with bleeding noses. In the case of the PlayStation 2, Sony decided to target adults, so Twin Peaks director David Lynch was invited to create a promotional trailer.

“It was great to see how much potential the PlayStation 2 had over the PlayStation in terms of functionality and design. It’s heaven and earth,” said Ray Maguire, then head of SCE UK and Ireland. The company didn’t want to enter Nintendo territory, he said, so they planned to appeal to adult buyers and improve the quality of the games on offer. “Back then, a lot of people already knew what PlayStation was, and we needed to bring that audience to PS2, and then get even more people interested and reach out,” he added.

In America, Sony considered the target audience to be people over 17 years old. “In the case of the PlayStation 2, we targeted the same age group as the first time around. For us, 17 years has become a kind of center of a big target. Everyone under that age wants to consider themselves seventeen because they envy older siblings or dream of getting a driver’s license. And everyone who’s older wants to go back to when they were teenagers,” Tretton says, that was the theory the American chapter had.

One of the main goals for Sony was to conclude exclusivity agreements with as many third-party studios as possible. So the company got hold of Tomb Raider, another batch of Disney projects and Take-Two releases, including Grand Theft Auto and State of Emergency. “We asked ourselves the following question: what do we need to do to make it harder for SEGA and Nintendo to get back on the market next time?” Dearing explains. Sony did not have a large portfolio, nor did it have its own studios, but relations with other developers were established from the first day.

Thanks to Ken Kutaragi, then President of SCE, for that. It was he who “made friends” with Electronic Arts, and in Japan, the Sony Music team agreed with SquareSoft about Final Fantasy and with other companies like Enix. “It’s become clear that consoles are sold because of exclusive games, and not vice versa,” Deering added.

How the PlayStation 2 took over the world

Left to right: Chris Dearing, Jack Tretton and Ray Maguire.

One box, many functions

The PlayStation 2 was the first console with a DVD drive, and its price ($299) was lower than many DVD players. At this point, consoles began to “move” from bedrooms to living rooms, but in different regions this feature of PS2 was mentioned in advertising in different ways. In America and Great Britain, for example, they did not pay much attention to this – games were much more important, they wanted to attract buyers with them. But in Europe, especially in the south, a special emphasis was placed on the DVD drive.

“In Southern Europe, we advertised the PS2 as both a DVD player and a gaming platform,” Deering recalls. – Of course, as soon as the console was under the home TV, people started buying games for it. But she also ended up there for the sake of watching movies, especially in Spain, which before the advent of the PlayStation was not very interested in video games, and with the release of PS2, the number of consoles sold there doubled. Now Spain is among the ten most profitable countries in the gaming industry.

Another major feature of the PlayStation 2 was backwards compatibility, which made it easier to conquer the market. “I reasoned like this: the person who owned the first PlayStation might have had a younger brother (or sister) who will receive the old console after the older PlayStation 2 appears,” says Maguire. “As a result, there will be more than one device in the house and no one will have to fight for the right to play on one platform or another.” Tretton added that thanks to backwards compatibility, people who bought games for the first PlayStation for five years did not feel abandoned and did not spend too much money.

How the PlayStation 2 took over the world

Sony extended the life of the PS2, including the release of consoles in different colors.

New threat

At the beginning of the 2000s, serious changes began to occur in the gaming industry. SEGA left the console business, ending production of the Dreamcast in 2001, and Microsoft broke into the market with the first Xbox. The appearance of such a powerful competitor from the American giant should have alerted Sony, however, according to Tretton, Microsoft and Sony offered different entertainment options so that there was no need to worry about this.

“Microsoft had to be treated with respect, it had an incredible amount of resources and experience. However, we were not just veterans of Sony, but veterans of the industry. In the West (since it is an American company) we saw it as a competitor, but at the same time, the Microsoft audience came to consoles from personal computers, loved shooters like Halo. Even though that was also part of our business, we felt like we had an advantage in the rest of the world and an opportunity to interest other markets,” Tretton recalls.

But Deering says that Sony competed with Microsoft much more aggressively – from the first day at general meetings, the possibilities of destroying Microsoft in this field were discussed. “It worked with PS2, continued to work with PS3 and PS4, and probably will work again with PS5, because we have conveyed to the audience from the very beginning of the competition with Microsoft that PlayStation = games,” he added.

How the PlayStation 2 took over the world

There were also bundles – for example, with SingStar. In the PS4 era, no one needed such entertainment.

The PlayStation 2 was released in Japan in March 2000, reached North America by October, and appeared in Europe and Australia in November. Launching in Europe was the most difficult, Deering said, and the financial losses were greater in that region than in America and Japan combined. “The first year was difficult because of the late release, the very high price, the yen was not that weak,” he says. “Everyone is a loser.”

The European branch was losing money, but these were not the amounts due to which it could cease to exist. It was just not entirely clear whether the game was worth the candle. Sony sold consoles at a loss, and games in the PS2 era took longer to develop than for the original PlayStation. But it is with the help of games that investments in hardware are beaten off. Due to such delays, the situation was not the easiest.

“The number of consoles sold has always been the most important element of the business — if the consoles are not sold, everything else is meaningless,” Deering explains. Then economies of scale (an economic term for lowering production costs as output increases) kicked in, and Disney games, Grand Theft Auto, F1, Gran Turismo, and Konami and Namco releases rained down.

***

As a result, as of March 31, 2012, about 155 million PlayStation 2s were sold worldwide – after that, Sony stopped reporting on the success of the console. To this day, it is still the best-selling home console in history.

“Both the PlayStation and PlayStation 2 have been the foundation of a big, strong business that has grown around the world,” Maguire added. It didn’t happen at the same time in every region. But both platforms gained more and more attention and eventually attracted those who did not possess them. After the first PlayStation was a resounding success, this idea could have died. But it turned out differently, and we went on the right path.”

Maguire added that both platforms came at the right time and were sold at fair prices. Everyone could buy them, there were a lot of games, all age categories found something interesting for themselves, and the cost did not bite. “PlayStation 2 finally made video games entertainment for the masses. People no longer wondered how long this industry would last, and began to pay as much attention to it as box office and music sales,” summed up Tretton.

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