he day after Sony's E3 Press Briefing, we got a chance to sit down with Phil Harrison, Sony's Computer Entertainment's President of World Wide Studios to catch up on a variety of topics. This candid conversation ranges from PSP 2.0, Home, Gran Turismo 5 Prologue, exclusive games, Trophies, Unreal Engine, Killzone, and much more.

Game Informer: Sony had quite a few interesting announcements yesterday. What seems to be the perception on what you talked about?

Phil Harrison: I’ll have to ask you that. What was your take on it?

GI: I thought it was good. I have to admit I think out of all three press conferences, Sony’s was probably the best, I think. But there weren’t a lot of big surprises – a lot of people were expecting the next version of the PSP, so that was nice to see. Why did you decide to bundle it with Battlefront for one of the packages?

Harrison: It’s a good game.

GI: Before E3 on Monday, you announced the price drop of $100 on the 60 GB, and packing in Motorstorm with the 80 GB, why did you choose Motorstorm? It seems a little reminiscent of the Gran Turismo 3 pack.

Harrison: I think Motorstorm is a great game, and I think because it’s online as well that it fits well with the user base that we’re trying to attract. Motorstorm has a ton of downloadable content as well that fits well with the bigger hard drive configuration. The timing is right, it’s a title that’s done well in the marketplace and had a lot of awareness and it’s a high-quality game.

GI: Usually price drops don’t come with hardware until a couple years after, and it’s been eight months? Nine months?

Harrison: It’s pretty consistent with what we’ve done with every one of our systems, actually. We launched PlayStation 1 in September of ’95 and dropped the price $100 in May of ’96. We’re certainly not treading a new path here. This is fairly a well-trodden strategy.

GI: Yesterday’s theme was “Games, games and more games”…..

Harrison: And services. The new S word.

GI: You showed a lot of games that are coming out in 2008. Do you think Sony has what it takes this calendar year to go up against the competition?

Harrison: Absolutely. I think the last section of the press conference we showed the sequence of major first-party franchises, obviously supported by some incredible third-party product from our partners. Uncharted and Heavenly Sword, and LittleBigPlanet debuting on the Network. Ratchet and Clank Future as well, there’s a title where Insomniac – that’s their second PS3 game. They’re starting to hit their stride, so to speak, on the machine.

GI: How important do you feel software exclusivity is? You guys touched on it quite a bit, but it seemed to be the case where the games will debut on PlayStation 3 this year, and then come out later on Xbox 360.

Harrison: I can’t really comment on that from the third-party publisher’s point of view, because everything I make is exclusive. You know, we talk about this a lot, and it seems to be a slight obsession. In fact, when you look at it from the eyes of a gamer, when they walk into the store to buy the game that they want to buy because they know it’s great and they hear it’s great, they read about it – they read about it from you. They know it’s a game they should buy for their system. They don’t care who makes it, they just want to make sure the best games are available on their system. I’m happy to be the one who’s providing some of those. I think the balance is important, the portfolio is important, but I think we get a bit obsessed about it, to be quite honest.

GI: I was a little bit confused about something – the Unreal Engine announcement. They announced they were working in conjunction with Sony in optimizing the Unreal 3 engine for the PlayStation 3.

Harrison: Correct.

GI: But that was one of the things two years ago at E3 where you showed Unreal Tournament – with Epic and nVidia – why is this a reannouncement?

Harrison: If we’re honest, we didn’t do enough of a good job supporting them and getting them the tools and technology early enough. Also, Epic isn’t a huge company. They don’t have unlimited resource. We have parachuted in some of our SWAT team of super engineers to help them. Specifically, to optimize for SPUs, which are the point of difference that the Cell Processor has. That process is under way. The benefits that it yields to end developers whether they’re writing exclusive titles or multiplatform titles is that the performance on PS3 goes up exponentially, and it will make for a much better game experience.

GI: I’ve heard from a number of developers that one of the problems with porting a game that’s based on Unreal, or having a multiplatform game that’s based on Unreal, was because Epic didn’t have their tech up to speed and they were waiting for updates. Is this basically saying, “It’s going to get fixed, it’s going to get better?”

Harrison: Yes, I think that’s a fair summary. We know that there are a lot of developers who are using the technology, so this is a significant impact for the industry.

GI: Gran Turismo has bounced around quite a bit. GT HD was great, but it was the demo. Kazunori talked about all of these things they wanted to do originally with downloadable content, and that all got pretty much scrapped for GT5. When was it decided to release Prologue, which is a demo but more of an expanded demo?

Harrison: It’s not a demo, it’s a game. It’s a full game, and it’s got full features.