The video gaming business started with Pong, which was the coin operated game that you played tennis with 2 paddles, that evolved into Magna box odyssey, then ultimately the world was changed by Atari in the late 70s. This was primarily a US phenomenon & later in the early 80s, along came Nintendo & Sega, which increased the penetration & familiarity worldwide with games, across the world. I represent the European division of Playstation, which does include some far-flung area like New Zealand, Australia & South Africa & the Middle East, Western & Eastern Europe & Scandinavia but unfortunately I'm not responsible for this particular part of the world. There are plans for bringing the Playstation to India.  

Without going into any specifics at the beginning, we'll take a quick look at a clip that gives a background on what Playstation is & some of the multipoint statistics that have been achieved & hope that is helpful information to you. 

That gives you a flavor of what Playstation is all about, its edges, its forbidden, & its course along in 5 years to be quite a worldwide phenomenon. I am very proud in particular of what's happened in Europe, which traditionally lagged behind Japan & the US at about 50% index to the US and now is actually slightly ahead after about 5 years in the market. I am going to show you some sales statistics, quickly. 

These lines are the historical annual sales figures, consumer purchases in the territories, for pervious systems before the new generator game machines.

The Blue line is 8 bit, that was Master System & Nintendo family system & the red line was the combination of Mega drive over Europe & also the super Nintendo.

The green line shows the more advanced machines, the Sega Saturn, Nintendo 64, & Play station & more recently in 1999 the Dream Cast. Playstation is clearly the biggest component of this amazingly high line, having sold through over 9.3 million units now in the year 1999, up from 8.7 the year before.

The purpose of this chart is to give you an idea of how much further across the average spectrum of homes of gaming & game playing as a social activity has gone from the early 90s & since the Sony Playstation appeared.

This is just a monthly bar chart showing the sales. Each Christmas time, the December peak, & the green line show a cumulative sales reaching over 27 million in the Pal territories. The movie said a 100 million homes worldwide its not correct, its about 75 million-there are a 150 million user's of course because there's more than 2 per house. This is an interesting chart, it shows the make up of other purchaser groups, in the beginning that red section that's the group 18-23, they were our target audiences, our advertising was aimed almost exclusively at them, they still represent a large part of our business, but over the years there's been an increasing growth in the 6-11 year age group and also the 4-34 age group. 

So now, on a basis of December99, 50% of users are under 18. This is how Playstation has managed to expand gaming among females. Historically, gaming which came initially from the arcades was highly focused on males. 90-95% over the years with more games appealing to girls. Girls becoming more like boys in some ways, in their outdoor & leisure activities it's been very fortunate that the % of females playing has gone up & lifetime is now up to 18%. There are differences between countries New Zealand in fact, is the highest of our territories with almost 25% & Sweden is the lowest about 12% the average around 18 as I said.

Home Internet usage. We have had a lot of discussion about the internet, it's one of the elements mentioned this morning, earlier in the day, about the key elements of youth marketing it's very important for us and I'll talk about our web site later but in the spectrum of current Play station ownership it is actually relatively low. That green line is not total Pal, that green line is actually Sweden, which is the highest with almost 50% of Playstation owners having some access from home.

The blue line is the average & the that's just about 18% & the red line is France, the lowest The internet has had a slow start in France, primarily because of the massive penetration of the minitel phone system which delivered many of the same benefits. France is coming on line very fast now however.

The make up of self & gift purchase, & the % gift purchase increased as the format matured slightly & of course in the Christmas season, the % of gift purchase goes up. Right now it is about 50-50, the scale on the left cuts of at 30%; it's still primarily self-purchase. The key elements in Playstation in our marketing & we do marketing in about 50 countries in the European division, there are 3-the 1st is to reach out & touch the audience, 2nd -provide endorsement credibility, 3rd-to ensure multiple points of contact. There's also a lot to do with the brand & the brand equity & values which I'll come into a little bit later, which is kind of an umbrella which uplifts these other components. As far as reaching out & touching the audience, we have seen a lot today & been in here with the youthful extreme sports activity. We have been involved in snow loading & surfing way back in 1995, a lot of other companies now doing that & doing it very well. Couple of things we have done differently, a TGV train that was painted up in Playstation Graphics up in 96/97, very highly visible, traveling around France, made a lot of news, got a lot of coverage, PR in general, having events which get coverage & attract opinion leaders, are always the ways to get the heart & minds of the consumer, more impact fully & strongly & with better connectivity than just putting an ad on the a television by itself. 

Racing games represent about 35% of the market for video games including PC games, & so you see a lot of visibility around Europe on race cars, drivers helmets, this is the Prost team we sponsor in France, its about the only Formula 1 team in France; but we sponsor a no. of other teams around as well as some motorcycle races & rally races.

This is the Playstation catamaran its 135 inch long, it set the world 24 hour distance record, about a year ago of New Zealand & its now about to attempt the Trans Atlantic time speed Record, will compete beginning January 1st 2001, a high race called 'The Race'-in the channel between England & France, everyone leaves at the same time, 1st one back having soon around the world by whatever route they choose, is the winner. There's no shopping, no resting these are no design qualifications, if you have a bath tub with a broom stick and if it will get around the world fastest, then that's the rules. This is going to be highly covered, we are optimistic that we have a good chance on this & its certainly will give Playstation a lot of visibility. 

Our biggest area of reaching out& touching the consumer is football, which is the highest viewed sport in Europe. We sponsor the Champions League since 1996. We are involved with Euro 2000 right now, & Champions League continues on into the next 3/4 years. Champions League gives us a chance to be visible on the field and to have break bumpers which are intro ads in between game period, that are seemingly approximately billion people, in an environment that is friendly, topical and relevant and we have been very successful with football games and sports in general, represent another part of the market for Playstation software. In a little while I'll show you the giant break bumpers this giant football that's chasing the man, is one of the image break bumpers that we run. Reaching out, getting to the consumer is also achieved in other ways. Magazines are clearly a very important part of Playstation success. 

The games industry is a high interest category & there are a lot of magazines about computers & computer games and with Playstation there is no exception. In fact there have been over 60 different magazines in Europe with Playstation in the name that are virtually exclusively about Playstation. Circulation is over 15 million per month with over 40 million readers per month.

The magazines talk about all kinds of things. Designs of new peripherals, the controllers, new games coming up, about games on development, sponsorship activity. They are not always complimentary. In fact we do not involve ourselves at all with the editorial. We let them say the good, the bad & the ugly about us. Of course we do send them samples of games & occasionally have receptions for them but we treat them just like general press. It has been an extremely important part in the Playstations success in Europe & is unique to some extent to Europe relative to the US & Japan.

By having this many magazines out there and having special arrangements with official magazines in each territory, we're also able to put out 5 million sample disks on the cover of these magazines each month. On the disk are either a video clip on what a game in development is looking like or it can be an actual playable segment of the game that if you like you can then go out and buy.

There's a lot of tactile aspect of Playstation. It's not all image from the TV screen. People come in contact with it when in leisure contact with friends, the pub, after school and also through sponsorships, board hoardings and of course the magazines.

Another area of real contact is in the point of sale. Around European territories we have around 15,000 of these interactive display units. They have been used before in the game industry. We pay particular attention to keeping them clean & refreshed and we have ideas about linking them to a wireless source so that the content can be changed from a distance. Our website Playstation - has been up for the past four years. It's another great source of information. It has great following. About 7 million visit per month & 22 million page views. On this site we have FMV and other forms of delivery, which add personality to the games, and there's separate sites for each new game that's coming out. We support not only the games we make but also good and exciting games coming from independent publishers, developers around the world. 

We've even done an experiment where we've wired up Playstations through a modem to a private Internet with 600 people across five countries - a project lasting six months. It was to try and find out what people our Play station users are but not accessible to the net, would do if they had net -like features. So we offered them email and had chat and a lot became friendly in spite of half broken English / German. Between the countries we had a web host and am proud to say we have had our first Internet marriage between two people who met via this experiment. It was very revealing and we got lots of exciting research out of the rest.

Well now we've embodied some of these basic elements into a strategy for a brand. We've worked very hard on the brand side from day one and the ambition has been to be fundamental but also bigger than the category itself. To be relevant to the market, to identify own and consistently gaining experience as a whole but also to be relevant to society and to lifestyle owning, identifying, constantly evolving the role gaining can play in people's lives. Bringing these two things together into a unique brand story and its importance for a youth product, service or brand to have a story and not just a bunch of features and graphics or quick cuts in a demo tape. 

There has to be something intangible, something mysterious, something challenging and elusive at the same time as elevating the image. We do this partly through brand marketing and partly through software marketing. The role of the brand is to connect with and gain experience of the value and status beyond the market and the role of software is collection with ownership of individual gaining experiences, quality choice in market, new software experiences. 

Both expand the market and thankfully have allowed Playstation to become the first lay term console. You saw that green light at the beginning. Play Station's life cycle has defied gravity although we are always vigilant and always paranoid about how to keep things fresh. But I think, concentrating on the experience of Play Station and the sample products and ownership itself made a huge difference.

Where did Playstation find its story? The product offers a powerful technology, which delivers better than real life experiences especially if you are not accessible to a snowfield, you can at least play a snow boarding game. 

In lifestyle, what young Europeans want is the empowerment to live life to the full without limitations or convention? These two observations have brought us to the conclusion that we should be focusing on powerful experience and since day one our tag line in Europe has been - Do Not Underestimate The Power Of Play Station.

The measuring behind the stories of powerful spirits is that they liberate you from the everyday. They give us access to emotions that were previously out of reach. There raise the bar; offer new horizons, challenges and experiences that improve the user.

Quote from 19-year-old Sameer in UK, "If you think about it, we've explored the world as we know it, unless we became astronauts or deep sea divers, the real unexplored frontier is the mind and Play Station enables this to happen."

So I'm going to show you some of our evolved commercials. Before that you will see two of what was represented of pre- Play Station gaining commercial, are for Sega the hedgehog and the other for Mario. The first group is testimonials. They were trying to give a mysterious edge to a particular game they presented. They were using the game launches themselves to give some craft some personality for the Play Station. 

We've had a number of commercials that made use of the shapes - triangle, circle and we elevated these shapes like the Nike Swoosh into something self standing without a corporate looking logo and send clues to users that we had their nos. and they had ours without getting into traditional market medium.

The second stage is a commercial called double life that won awards in '98. It is trying to dramatize across a wide range of rather unusual people that you can lead a double life, you can escape the ordinary, you can elevate yourself, throw yourself, no matter what you do during the day by having this double life. This affair with Play Station during the evening and the character we use are really quite at the time anyway, edgy, compared to the type of people in the commercials back in '98.

Then in order to try and keep people guessing, we moved on to something called 'Mental Wealth'.

This is a brand campaign that refers to the benefit of gaining for the individual and focusing a little bit on the fact that although youth can be categorized as typical, in certain ways, ultimately they are just as individual as people of any other age and we started to appeal the individuality.

I remember that earlier you have a right to live and Pepsi a lot to give. I guess you could put that in a general direction. Logically but with a very interesting, and most eerie and in some cases disturbing graphic evolution of computer graphics human in this case a girl called, "The Cyber Pixie - FIFI" and this ad is very different and we kind of uncertain also what the reaction would be to it but it was run in many countries and it was extremely successful in prolonging and refreshing the Play Station image.

And the tape will finish with probably the most obscure TV commercial you have ever seen. It has no copy no music track, no visual footage - it is simply looks to be a metal slide in which a microscope is viewing blood on the slide and will start to see the little shapes from the Play Station subculture in each appear in the blood. The concept there is it is an underground campaign. The dialogue with the opinion formers and how a powerful experience can actually live in our bodies. With that will ask him to run the commercials. Place to hang out to their own part or creating really important for marketing to this demograph, also key is that the internet allows them to communicate both with each other to find out what's cool, what's not cool, what's hep, what they don't like, what they do like and with the brand so use brand managers or brand guardians. 

We get to find out what they like what they don't like, we can react accordingly traditional media that is very very difficulty the internet actually speeds up their process and allows us to react to it very quickly and ultimately what we are talking about here is allowing your audience especially this key, this key fifteen to twenty four years old audience extend their relationship with the brand they get involved personally, they can watch it in the case of mtv, on air, they can interact with them online, they can go to live events whether they are music events or whether they are buying a CD, whether they are talking with their friends about it . We try to wrap that up into one package that your relationship with your audience exists online, offline and in your life, ok, so that's really it.

OK, I hope that it allowed everybody to get a sense of what we were doing online with the MTV brand I guess, we have time for some questions so thanks very much.

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