PlayStation Home: Sony's silent money-maker

PlayStation Home: Sony's silent money-maker
Michael French

By Michael French

February 23rd 2011 at 8:02AM

In just two years PlayStation Home has gone from just a virtual world to a vibrant games platform

If someone asked you to name all the PlayStation platforms, you know the obvious answers. PS3, PSP, PSN, perhaps Minis, and Move if you’re going to be picky – and then there’s PSP2 and the upcoming Xperia Play.

What some may forget is Home.

Now two-years old, the online service – which today mixes social and community functions with a platform for smaller, more casual and instantaneous games – has blossomed.

It’s beloved by a set of key developers, with 120 studios around the world making content for Home. And it’s making money for them too, through a mix of models that haven’t found feet on any other console – such as microtransaction, virtual item sales, and freemium.

Now the London-based Global Platform team that looks after the service is expanding to keep up with the growth of its audience both in the industry and amongst the gamer community.

We sat down with PlayStation Home’s platform director Peter Edward to find out more about what’s next.

Home is two years old. What’s changed as it has grown in size and age?
It’s fantastic to be here still going strong. When we launched in December ’08 we had confidence in it, but we still had a lot to prove. The fact we are here two years later, with a userbase of 17m and 10,000s of objects, hundreds of games and locations in the world… that all proves the potential was there. It is a force to be reckoned with.

For us on the platform, going from fighting for recognition to gaining acceptance amongst the development and publishing community and outside the games industry, is great. We are taken seriously, people want to develop on Home. We are a proven platform.

Internally we’ve gone from being a product development team to an ongoing service development team which has required some fairly major changes in approach and attitudes from us.

We’re not doing what normal games teams do – soldiering on at all costs towards a single ship date, then breathing a sigh of relief before going on holiday for months. Home is a continuous thing and we think more strategically about where we want to be in six months, a year, or two years. It’s really a different mindset.

It’s also asked for individual developers on the team to take a different mindset – they aren’t being asked to develop a single feature, but develop something for an entire platform. People come to Sony to make games, so when we say ‘You aren’t making games any more, you’re making a platform for other people to make games on’… well, that isn’t necessarily what they came here for. But when you see the inspirational things other studios have done with your tools, you’re constantly surprised and driven.

Was there perhaps a misconception when Home was first being built that this was just a virtual world for PS3 owners to chat in?
Certainly when we built the platform it was much more of a general, social platform for PS3. As it has grown up a bit we’ve also firmed up our ideas about what it is, what our strengths are, and what to build on.

Hence our focus – people buy a PlayStation 3 to primarily play games. Sure, it does a lot of other great things, but PS3 is driven by that. So our audience is predominantly gamers. They want games.

Since we’ve clarified that vision we’ve seen a huge amount of success, interest and positive feedback from the development community and users that this is right, that’s what makes people come back.

What is really heartening is that the vast majority of people on the team have reacted positively to that change. You expect that when you are developing a platform for other developers, the team will be reluctant, maybe even leave – but we haven’t really seen that.

In that context, it’s clearly a success. Is there an unsung story to Home’s growth?
I hear all the time ‘I logged on when it first launched but there was nothing there’ – but I urge people to go back on there. It’s been two years. We were always very proud of what we had achieved for launch, but we’re the first to admit it was basic back then.

Two years down the line it has come on in leaps and bounds, is vibrant, full of cool content and great games to play. It’s free – those who aren’t going in there are really missing out. If you think Home is what it was two years ago, do yourself a favour and have another look, you won’t be disappointed.

So we’re constantly trying to raise awareness. It’s taken us a while to get to that clarified vision, admittedly – originally the broader view was harder to latch on to. But we’re very proactive in the industry, especially when it comes to developer events like GDC or the Develop Conference, and the common thing we say is ‘You almost certainly didn’t realise how much you could do’.

Plus, it’s free – for users and developers. Studios can download the Home Development Kit now and start playing with it. That’s another area where our direction has been refined – we are focusing all our efforts on making the development experience as simple, cost-effect and easy as possible. 

At first we started seeding the world with our content, but we don’t make anything anymore, it’s all made by the developers.

Home includes a fully fledged online multiplayer engine. All developers have to do is focus on making really cool content. So there’s great support from the Home team as well as the standard DevNet guys, there’s 24/7 Network support, and the HDK is very easy to use.

We’re actually making it more configurable too – developers are getting used to it and want to play with it more, so we’re freeing elements up for the more adventurous developers.

So who is the average Home user?

They’re not that different from the PS3 demographic. But we find the more engaged, more active users are on there. Almost ‘the hardcore of the hardcore’ – but there’s also a broad skew to the demographic. So we have a slightly more female, and wider age group logging on as well. But the most active are the more average gamers, and they are the most receptive to the idea of spending money in Home.

Amongst all those users, the average time spent on Home each time they log on is one hour, so they really are engaged – they’re in there hoovering up content, talking to other users.

For those not familiar, what’s the business model for Home? At first there was a lot of talk about creating promotional spaces for brands – but now it’s a games platform.
Well, there are a number of brands that do see Home as a really good promotional space and a way to reach a very passionate community. That has panned out. But, importantly, the ones that work are those who know they have to offer a gaming experience.

Take Audi – they worked with a third-party to create some games in Home. Users kept playing, and Audi has since put more games in. Actual, decent fun games. Red Bull has seen the same results. What doesn’t work is just creating a showroom – but Home wasn’t really about that in the first place, and the smarter companies get that.

From a business point of view, virtual items and microtransactions… it just works. We have tens of thousands of items, and they are making money. There are some developers solely working on Home now, which speaks a lot to the success we can create. There are developers making money from virtual items in Home, simple as that.

But you’ve also got the free to play and freemium model. Sodium, the game by Lockwood, is a great example of that. They offer the first five levels of their game for free, but to get the other 45 you have to buy an item of clothing for your avatar to wear that unlocks that access. They’ve had a massive conversion rate – 25 per cent of players pay up.

Why does that work? Is it just the idea of buying a scarf to unlock a game is quirky and fun?
Well, firstly it’s a good game. That’s a good start. There are lots of opinions on how much of a game you give away for free, but for most users the pleasure comes from having invested time to become good at a game that’s free, then wanting to prove that value by paying a bit extra.

Sodium’s access isn’t particularly expensive, and when you do pay for it, you get something to customise your avatar with – that’s a really nice way of showing your allegiance to things, and proving your interests.

If you buy a Killzone outfit, you’re proving you’re a Killzone fan. And if you get a benefit alongside that, then even better.

There was an Amazon pre-order for Killzone 2 which gave you a Home item when you ordered the game – that really drove pre-orders. So it’s proven in both directions.

The other model is pay to play – the Midway Arcade has been hugely successful and they’ve just launched Midway 2, which speaks for itself. Sodium 2 is on the way too, which all just proves developers and users are coming back for more. If you make something that people want to come back to and play again and pay for, then there is money to be made on Home.

Virtual worlds on PC have floundered during Home’s lifespan, either as the model migrated to social networks or as potential environments petered out. How has Home been strong as others lost ground?
Knowing and understanding our customers was the big step. Focusing on games helped us refine what is a platform that enhances the idea of ‘entering’ a platform to get games.

There’s something we call ‘Total Gaming Integration’ that Home allows. So for instance if you play Red Dead Redemption you unlock Red Dead Redemption items in Home. Or the SOCOM area, where we have an ‘assemble an AK47’ speedtest game that unlocks a gold AK47 – but for both your avatar, and for use in the game itself.

That’s something we can do that no one else can. The items let consumers show how much they love key games, but it gives them a reward during gameplay too.

It’s also hugely rewarding for the developers and publishers. Because often the situation is that, when the disc is in the drive – assuming the console is on – you are in touch with the publisher. But when the disc isn’t spinning, you’re disconnected.

In Home, if you’re on in the Killzone space, you’re still connecting to the game, and of course you can launch games direct from Home, so it all becomes seamless.

The analogy I use was the five-a-side football example – you don’t just appear on the pitch to play, you all meet up before hand to talk about the game maybe over breakfast, you travel there together, then head down the pub to discuss it.

Another strength has been quality. There’s a PlayStation level of quality. It’s a managed platform, so we make sure everyone’s efforts get seen by our users. I won’t go on about the difficulties even the best mobile or download games have getting seen in some channels, but that’s not something we struggle with.

Plus, the community is very vocal, passionate and active. We run events for them – but early on the users were off ahead of us organising events, such as pub quizzes in game, and sourcing their own prizes.

And it’s a secure platform – users confidently spend time and money in a safe environment, which counts for a lot.

Do you think the industry understands that Home offers all that potential?
I think a lot of the industry understands it – and I think there are a lot of people in the industry who don’t realise how much the others understand it.

So, there are 120 studios using the HDK and making content with it. That’s a huge community already using the platform.

Having said that, there is a section of the development community that doesn’t realise. That’s why we’re trying to get the news out there.

And our focus has been on getting as much focus on the HDK as possible to make it as easy as possible.

Everybody knows that current-gen flagship console development is not cheap – that’s why mobile and handheld development is so popular right now, the barriers to entry are so much lower.

But Home offers an opportunity to get on a console when you have a web/mobile budget. That appeals to indie developers because they can get something on a console for a realistic response and in a good timescale.

That also means they can experiment and be a bit innovative.

That’s a good message for developers worried about discoverability on mobile or being lost in a flurry of apps.
Exactly. We’re in a position to ensure that doesn’t happen – everyone gets a fair crack of the whip and we have lots of ways to promote what’s in Home. That bustling community also has its own community media through their blogs and so on, as well as official channels like our various PlayStation Blogs.

You’re growing the Home team – who are you looking for? And how many?

We’re over 70 at the moment, and are looking for around ten or so more.

Ultimately we’re a tools and technology platform, so we’re looking for people to expand that. The skills are obvious from one point of view – server programmers, engineers, and so on. But also we are growing to include things like operations. We’ve got nine different teams supporting the platform, which makes us a microcosm of the whole PlayStation business.

The important thing when it comes to growing the team is finding people who are going to be inspired by what other people can create with the platform they produce.

We’ve undergone a mindset change on the existing team and we need people who are inspired by that.

And SCEE tends to pride itself on having a very broad skill base of staff drawn from all kinds of industries – does that play into how you’re growing the team?
The aim is always to recruit the very best people, which takes time and means we don’t just fill a role. That tends to mean we do often look outside the games industry, because the chance to work on games is attractive, but you can find different enthusiasms, aptitudes and professional attitudes in other sectors.

Of course experience is useful, but we’d never discount someone because they don’t necessarily know games well. If you’re trying to make games and content for the social or casual space or whatever you want to call it, that really helps, and growing the gene pool pays off in every direction.

You only have to look at London Studio – which made EyeToy, SingStar and Home – to see that we have a very broad mix of products, which to a great extent represents our broadminded outlook.