Sony's PlayStation Now open beta is well underway on PlayStation 4 and is set to spread to PlayStation 3, Vita, PlayStation TV, and certain Bravia TVs this fall. We spoke with VP of Sony Network Entertainment Eric Lempel about how the cloud gaming service is going, pricing models, possible subscription models, net neutrality, and more.

When you're finished, be sure to check out our interview with Gaikai's David Perry on PlayStation Now as well.

I understand you were involved in Sony's purchase of cloud gaming service, Gaikai?

Yes, actually I met with Gaikai and David [Perry] several times before there were even talks of the acquisition. I’ve been on the network business from the start. I was part of the team that launched the PlayStation Network on PS3 back in 2006. We’re always looking to do new and innovative things so naturally we’re talking to a lot of different partners. When Gaikai came in I was incredibly impressed with the vision that David had and the approach they were taking to deliver on that vision. I just thought the possibilities for this are endless. It’s great to see how fast we got into this because years ago I don’t think anybody would believe this could be done. And then the idea of where we’re going in just a few months that you’ll be playing a PlayStation 3-quality game potentially without a PlayStation in your home is quite a leap from I think where most people thought we could go with this.

How’s the PlayStation Now beta going so far?

The beta’s going tremendously well. We went wide last week and we’ve got a lot of users engaging with the service. One of the big metrics for us is the experience the users are having because this is a really unique proposition. And the feedback that we’re getting is overwhelmingly positive. More than 80 percent of our consumers are saying they’re having a really good experience with the games on the service so we’re off to a really strong start from my perspective.

Any specific things gamers are enjoying?

It’s really about the actual gameplay experience. How are they engaging with the titles? And if we do this right it would basically mean the consumer’s playing a game and they don’t really know where they’re playing it. They’re just playing it on a PlayStation and it all feels good to them. Those are the types of questions we’re asking and that’s the type of feedback we’re getting from the consumer – really positive. They’re having a really good gameplay experience with the titles available on the service right now.

Sony's Eric Lempel

How does the rental pricing model work? Is it all up to the publishers?

So we’ve got the different tiers, and then beyond that the publisher does have some flexibility on how they’d like to price their titles. They are looking to us to work with them to help them figure out what will work best. And we’re all kind of working through this together right now. There are a different variety of prices out there depending on the title, duration, and – in some cases – publisher. But this could all change. And we’re actually looking at making changes to some of the pricing right now based on some of the feedback we’ve received.

What kind of changes?

Very soon for the four hour duration tier we’ll be introducing titles at $1.99. Select titles. It won’t be everything. [Note: This price tier is now live]

Do you ever see PS Now offering a full purchase option?

I wouldn’t rule it out. I’d say it’s really early for us now. This is an entirely new direction for us and it’s great that we’re out there now. It’s up and running and it’s working. So there are lots of other models that can come into play and that’s certainly one of them.

Could it ever tie in with the PlayStation Plus program and/or another separate subscription?

First, on the Plus side. As you all know Plus is doing really well. The customer satisfaction rates for that product are off the charts and we continue to add a ton of value to what the user receives through that. So we’ve never really put a limit on what PlayStation Now actually is. So there’s definitely a possibility in the future of us exploring some type of additional offering for the Plus community as it relates to PlayStation Now. So we can certainly see that. Separate from that, and could be related we are exploring a subscription option for PlayStation Now and that would be basically a set price for a certain set of content. No details on that just yet, but we are actively working on that behind the scenes because we have heard from our users that that’s something they’re really interested in. And we’d like to see how we can present some type of offering to them.

Will we see older or newer PlayStation library games outside of PS3?

Yeah, in fact in our plans going forward we’re looking at everything so there’s the real possibility that you’ll see PlayStation 1, PlayStation 2, and PlayStation 4 titles available. Right now it’s just PlayStation 3, but these are all options for the future.

What does it take to get a game running?

I can’t really speak to the specifics here but I will say it’s not terribly difficult if a publisher chooses to put their title up on the service. The real heavy lifting comes with setting up the service itself for the platform. For example, today we’re doing PS3 so we’re all set there. So if a publisher wanted to put up a PS3 title on PlayStation Now it’s not a lot of work for them. We want to make it as easy as possible to work with our partners on that and at the same time make it as easy as possible to get as many titles as possible for the consumers.

There have been price comparisons on the web comparing the PS Now rentals to PSN and retail and some games end up more expensive on Now. How do you respond to these comments?

I would say for us it really comes down to choice. The consumer has a choice and we want to present them with as many options as possible to enjoy their entertainment. We’ve got a lot of games to available on the network that you can buy and download the full titles and that’s great. You might be able to buy the game at retail. But PlayStation now it’s really the early days. We haven’t even been in it for ten full days yet wide open. And I think we’re going into a lot of new areas where consumers can obtain those games.

For example, we’re on PS4 right now and you’re playing PS3 titles, but if you’re a user, and there are many of them out there, who just bought a PS4 and never owned a PS3, well here’s your opportunity to go ahead and play Metal Gear Solid HD collection because you’ve heard great things about it. You have no other option so there’s a lot of variety there. If you’re a consumer who has other options, great, you should be encouraged to go obtain the content in that manner. But this solves a lot of different needs for a lot of different consumers. And, like I said, it’s really early so we will look at the pricing and we may adjust pricing. Like I said, we’re already introducing the $1.99 tier for the four hour rentals and there could be more to come on that.

Why are games like F1 and NASCAR considerably more expensive than other titles on PS Now? Is it due to licensing fees?

Those are both external publisher titles so we work with them on the pricing and ultimately they’re setting the wholesale price on these titles. Granted we’ve dealt with a lot of different titles over the years and if you are using specific IP there usually are licensing fees. I couldn’t say for sure if that’s why those titles are priced that way because they’re not first party titles, but it could very well be the reason. I couldn’t say.

Are there any concerns over current net neutrality discussions?

Those discussions are still going on. And naturally being heavily in the network business it’s of great interest to us, but I couldn’t really speculate on a direction we would take until we fully understand how the rules and governs comes down in that area.

Are there concerns about possible slower internet speeds and higher costs from ISPs?

We certainly want the consumer to have the best experience possible and, unfortunately, that’s an area of the experience that we currently don’t have control over. We leave it to our partners as well as the ISPs that the users are using. But, yeah, I’d say it’s certainly a concern if anything is done that is not in the favor of the consumer getting a great experience. That’s where we stand. We want users to have a great experience and great access to our content. If anything gets in the way of that which would ultimately cause the consumer to have a poor experience or increased cost we don’t feel that’s a good thing.

What do you see in the future for PS Now?

Well I’d say if you look at just the evolution of the network and that’s something near and dear to me, since we launched on PS3 it’s constantly evolved and we’ve constantly added new features and functionality. But at the same time we’ve done a lot in the way consumers obtain and consume their content.

So I really see PlayStation Now as an incredible enabling technology to take all of this a lot further. And right now… People have been renting games and that’s been a cumbersome experience. You drive out to a store. You have to hope they have the game. Come home. Go return it. But now it’s easy. You can do that right from your home. And it simple and it’s right there and you can easily browse the catalog. But as we look toward the future I see years from now it being easy to access great high quality games anywhere, anywhere that can properly display them, of course. But I see this as total freedom from some of the things that might be in front of you today. And that might be a consumer who has never bought a PlayStation console and just says, “I’ve heard such great things about these games. I want to check some of them out.” We’re going to make that easy for you. We just want to make it simple for you to enjoy a lot of the great content that we along with our partners put out.

Can the service get better even if the average Internet speed doesn't jump up much?

I think all of this can only get better. You see a lot of the ISPs making announcements on how they’re introducing higher tiers or faster service at the same price that their consumers are paying today. I think the space is moving really fast. And at the same time the Gaikai team is incredibly nimble, really creative, really dynamic, and they’re looking at every aspect of this delivery chain and constantly seeing how we can make it better. And it’s really incredible that they’ve come this far. But they won’t stop. They will continue to look at making this a fantastic experience. So I’d say this is the beginning and it’s only going to get a lot better from here. I think people will look back and say “Wow, that was really cool how that started out in that form on PS4 where I could play some PS3 games and look at what it’s turned into."