Is This “The Last Console Generation”? And Nine Other Questions for Sony’s Jack Tretton.

Sony’s latest flagship gaming console, the PlayStation 4, goes on sale in the U.S. and Canada tonight at midnight, five years after it entered development, and nine months after it was first announced.

Along with Microsoft’s Xbox One, which launches next week, the PS4 arrives at a pivotal time for the videogame industry. Smartphones, tablets and their unending catalogs of apps have disrupted many industries, but study after study has shown that the lion’s share of both downloads and revenue has gone to games, an entertainment category once scorned as immature.

Now, with the audience for games greatly expanded, two questions arise: Can Sony and Microsoft hold on to their existing fans? And can they tap into that new audience to continue to grow? As you might expect, Sony Computer Entertainment of America president and CEO Jack Tretton said “yes” to both.

Tretton sat down with AllThingsD earlier this week to field questions about consoles, competitors and controllers. Here’s what happened:

AllThingsD: Sony first released the PlayStation 2 in 2000, but kept making and selling it until this year. How long will the PlayStation 4 be around?

Jack Tretton: In a perfect world, it would be forever. In the case of the PlayStation 2, there was still significant demand for it, but you’re talking about 2000 technology, and it was actually becoming more cost-prohibitive to manufacture it as time went on, as opposed to less. The price barrier between 2 and 3 meant we had a healthier tail on 2, and a steeper ramp on 3. So there is a cause and effect there. With PlayStation 4 being $399, and being 10 times more powerful than the PlayStation 3, that bodes very well for talking people into buying a PlayStation 4. We think the ramp is going to be incredibly steep. The challenge is going to be sustaining the PlayStation 3 for several years at a $199 price point and the 80-million-unit install base that we currently have.

And where new games go is something Sony can actively guide, since it owns studios like Sony Online Entertainment and Naughty Dog, which recently released The Last Of Us. Do you want their next title to be on both the PS3 and PS4?

Ideally, you’d want to make it available for both platforms. The development community wants to gravitate toward the best tools they can get. Something like MLB: The Show (produced by Sony-owned SCE San Diego Studio) will be available on PlayStation 4 and PlayStation 3. If you were going to do a sequel to, say, The Last Of Us, you’d want to host development on PlayStation 4, and then it would be a question of investment made and how good of an experience it would be to be sequeled on PlayStation 3, how big that audience is, and how much of it has transitioned over. So it’s going to vary by publisher. But there’s so many people coming at it, it’s not like you have to depend on that company making that game or your platform’s dead. There are a lot of different ways to attract consumer interest.

For someone who doesn’t play a lot of videogames, what’s the case for the PlayStation 4 over the Xbox One?

If you’re a Netflix fan, it has the best interface of any device out there. But, yeah, you can watch Netflix on anything. Maybe you like Vudu, or you like Hulu, or you’re a sports fan, you want the NHL, NBA and MLB packages. But, quite frankly, if you’re not a gamer, we’re not spending a lot of time trying to get you to spend $399 for a PlayStation 4. That’s like saying, why would you buy a car if you don’t drive? It’s a nice place to sit, and maybe you can get somebody else to drive you, but you’re probably not in the market for a car if you don’t have a driver’s license. There’s value for the whole audience, but we’re targeting the gamer first. To me, it’s like saying, let’s sell a smartphone as a gaming device. It’s certainly been done, and I think Sony did a foray into that, but when people talk about the features of a smartphone and why they buy one over the other, it’s typically not for gaming. Gaming is just a secondary benefit. I’m going to buy a gaming device based on gaming, first and foremost. The other stuff’s important to me, but it’s not why I buy it.

Do you believe the industry watchers who say the PS4 is part of the “last console generation”?

It’s funny, I’ve heard about the “last console” since 1986, and only because that’s when I entered the business. I’ve managed to ride the “last console” wave for the last, what is that … 27 years or so? There’s a reason the console came about: Sitting in front of a big-screen TV on a couch with your friends. To get the immersive depth in gaming and to get the social experience of sitting around the living room, we’re not going to huddle around a tablet. We’re not going to huddle around a smartphone. I think the technology will come a long way, but you’re still trying to build a console, ultimately. You’re trying to get it closer to a console.

The threat in the ’80s was that the PC was going to take over, and it’s certainly alive and well, but it hasn’t taken it over, and I think smartphone and tablet gaming is actually additive. I don’t think I’ll be in the industry 27 years from now, but I think the next 27 years bode much better for the gaming industry than the last 27 did. It was plowing the road and establishing it as mainstream entertainment. Now it is mainstream entertainment, and you’re going to have generations of people who grew up with gaming. Twenty-seven years from now, you’ll be hard-pressed to find somebody that was never a gamer in some way, shape or form.

What do you think of all these other devices closing in on the same turf as traditional consoles, like Valve’s Linux-based Steam Machines, or all the Android-based micro-consoles coming out this year?

There are toy companies that got into the console business, movie companies that got into the console business, TV companies that got into the console business. It’s not new. When companies fail, you tend to forget who they were. The console used to be a narrow-genre, narrow-audience, single-purpose device. Now it’s multimedia to a more diverse audience, casual and core, with games from free-to-play all the way up to $60. If gaming exists somewhere, we want PlayStation to be there. So we’ll bring our games to smartphones and tablets, we’ll certainly make it available on competitive devices, we have our own smartphones and tablets. Anywhere the gamer is, we want to be.

But there’s a limitation to what we can do. We can’t take Gran Turismo 6 and put it on a smartphone or a tablet. It’s just gonna be a lousy experience. It’s not going to be what it is. Conversely, you can go out today and play Angry Birds on your PlayStation 3 and have a great time. I’m not sure why you’d want to do that, but you could. You can’t go playing Grand Theft Auto V on your smartphone or tablet. It’s easier to migrate up. I’ve seen some great videos on YouTube, but I don’t confuse them with Hollywood Oscar-winning hits. That’s why you go to the movie theater, even though there’s something to be said for watching something on your smartphone. We call it “good-enough gaming.”

It’s like wine. Your first wine tastes good, and you start drinking more of it. You go from white to red, and you go from $10 bottles to $50 bottles. Some people just stop at $10, but some people become wine aficionados and, all of a sudden, if it’s not Screaming Eagle, it’s not good enough. People don’t drink Screaming Eagle because it’s $800 and they want to throw away $790. They perceive that that’s a much better wine than the $10 bottle. Smartphone gaming might be good enough for somebody. For other people, they find themselves wanting more, and they’re looking for better controls, more technology and a more immersive experience.

What about all the people who aren’t gamers but play Candy Crush Saga on the train? Are they part of the potential audience for the PS4?

Absolutely.

Then what does Sony have to do to onboard them?

I think it’s difficult to take Candy Crush and say, here’s a $400 version of Candy Crush, because you gotta go out and buy the hardware to get it. What I think is more likely to happen is somebody else in the home is a primary purchaser. It’s much easier to get people to buy something on the console when they already own the console. These are big hurdles that are being overcome for us.

If you had to bet the farm on what game interaction will look like in 10 years, what would you bet on?

To date, and for the foreseeable future, the best possible is the gamepad. Other things are limited. Oculus Rift and virtual reality is a wonderful thing, but there are physical limits as to what you can do and what is a comfortable experience in a controlled environment where your head is enclosed. Gesture-based gaming is great, but it’s very difficult to play the core genres and really have that be a better experience. If I’m in a driving game, it really feels better to hold the steering wheel in my hand, and if I’m in a fighting game, while it’s great to think about going around, swinging your arms in the air, it’s relatively limiting. At the end of the day, the best way to control a videogame character is with a controller in your hand. That’s one of the issues with smartphones and tablets. There’s only so much you can do swiping your hand. You kinda need a controller in your hand for a lot of the core gaming experience.

So, do those alternatives to the gamepad not exist 10 years from now?

We always say to the development community, if you give them a tool and it makes the gaming experience better, then that’s real. It’s not, if it’s, “We’d really like you to put this in there because we’re trying to drive this initiative,” and they go, “It doesn’t make the game any better, but I’ll do it to make you happy, because you’re giving me marketing incentives.” Why were Guitar Hero and Rock Band the greatest thing in the world, and now nobody does it? Some things have staying power and become a part of the core experience going forward, and others find a moment in time with a given game or a given genre that they really worked well with. Not to say that something might not be a success, but I don’t know that it can replace game controllers altogether.

If we asked Microsoft that same question, they’d say that mandatorily bundling the Kinect with Xbox One will encourage developers to innovate and make better games for it.

We’ll put the controls and the tools in the developers’ hands. But it would really have to come down to somebody in the development community coming to us and saying, we could really build you a better game if you could give us this technology that your competitor has and we don’t have. I don’t think it’s ever been our style to mandate that something has to happen. You can try to force people to write right-handed, but some people are just left-handed.

And I’m not implying that Microsoft is doing that, I’m just saying that we tend to prefer to make it the choice. I respect anybody’s approach to the business, but at the end of the day, you’ve gotta be laser-focused, and can make yourself crazy trying to react to what the competition is doing. I’m not naive enough to think that we’re going to own every consumer. Some people are going to gravitate toward our platform, some people are going to gravitate toward others. Some are going to stay behind on existing generations, and some are never going to buy it at all. But it’s much better as an opportunity for a manufacturer today than it was five, 10, 15, 20 years ago, and I think it’ll be better going forward.

This interview has been edited down from its full length.