I think both are absolutely viable. And I think that although they'll start of being niche, they will develop very, very rapidly. Just like cable TV - that took a long, long time to take off, but once it did, it really took off. They are absolutely viable. You could have a gaming TV channel, or apps. And they will be monetised, because I think you'll see they'll start putting gambling on there as well. That will bring up the revenue streams.
Lots of people say dedicated mobile gaming devices could be set for extinction - because people want multi-use devices like a phone...
I actually disagree with them. I think that the 'Bat-belt' trend - where you have different devices for different functions - will continue in perpetuity. When you have a multi-device it's okay for some people. For instance, I have a Blackberry and I can do all sorts of things with it, but I have another device for gaming as well. I think that people are going to continue to have two or three devices.
When people say: 'Multi-devices will be king,' I'm always tempted to reply: "What about N-Gage?"
In the future we'll see the main gaming device - whether that's PSP2, I honestly don't know, or 3DS. [I don't think] it has to be a multi-function device to be successful - if you've got good games.
On the home console, I think maybe you eventually may to have email capability, that sort of thing - multi-function up on the customer's screen. But for mobile? No. I think people will continue to carry two devices around.
Do you think gamers will 'graduate' from iPhone onto PSP2 and other handheld consoles?
The research - not that I've done with Capcom but that I've done previously - shows that it is actually two way. People come into iPhone because they want to play these little games, but then they want to move on - they want a more serious machine. The number of people who are playing these little games on iPhone and other, it's amazing. In two years time, maybe they are going to 'graduate'; maybe they will be playing Street Fighter on 3DS.
Studios such as Rockstar, Treyarch and Bungie are spending more than ever on the development of games. Will the day come that this level of expenditure has to stop?
I think that publishers will continue spending [on development] until they can be fairly certain that they will get over 90 per cent on Metacritic. People like Ubisoft, Rockstar, EA - Capcom included - that will be their philosophy. We're not going to put games out if we think they're less than 90 per cent - not that we're too bothered it they're 88 or 89 per cent, but you get my meaning.
I think these companies will continue [to invest record amounts] because they know that if it's a really, really great game it is going to sell. But if it's down in the 65s and 70s... you could get away with that on PS2 or maybe PSOne, even DreamCast, but consumers unfortunately at the moment don't have the money. They're only going to buy the great games, or just the games they really want. No longer will they [arbitrarily] try and get one game a month.
There have been some really great games out recently - like Sega's Vanquish, which is superb - that somehow don't seem to be selling. Five years ago, those games may have sold double. The recession has had an effect, unfortunately.
We're seeing prices of Triple-A games creeping up - Black Ops has just come out at £55 RRP, just like Modern Warfare 2 before it. Is that a sign that the business model is under threat?
No, I think [Activision] look at their research, and it tells them they can get people to buy it at that price - certainly in the first five weeks. Consumers know they can move it down, but they're so excited in those first five weeks, they'll pay more for it. The publishers have worked out their model, and if they can get people to pay a higher price they will. It's not panic. It's very carefully thought out.