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Yesterday at Sony Online Entertainment's E3 headquarters, the Massively team got to see and hear the latest details on SOE's trifecta of new titles: The Agency, DC Universe Online, and Free Realms. There will be in-depth coverage of these games across the site during the rest of the day. To kick off, and to give you some perspective on what these games mean for the company, we sat down to talk with SOE's CEO John Smedley.

Mr. Smedley was extremely forthcoming about the role of these new titles for the Sony subsidiary. While the company's bread and butter - EverQuest, its sequel, and a stable of other traditional MMOs - will always remain, these games are a chance to offer something substantially new to the company's playerbase. Join us as we talk with Mr. Smedley about the possibility of sequels to Free Realms, what it's like to run up a wall in DC Universe Online, and some tantalizing hints about the role of collectible games in the company's titles. Want to trade for a new secret identity? Read on.

"You're selling me this shirt in-game for 99 cents? I get it. You sell me a shirt in-game for 99 coins? Well, then my next question is how much is a coin worth?"

It's kind of nice to get these games out into the light of day. It's been a while, we've been making DC Universe. It's kind of nice. What I love about this game is the sense of scale, the ability to fight in three dimensions. In the video we show Flash running up the side of a building, and you can do that with any super-speed character in the game. It's so weird, you're running along and suddenly you flip and you're going up. It's just cool ...

These two [Free Realms and DC Universe Online] in terms of readiness, are definitely something to see. Neither of them are ready to launch just yet. We're going to hold off, and we'll release them when they're ready. Free Realms is getting pretty close, it's pretty close to Beta right now.

September 15th? [Our writeup on Free Realms will include details of how we got that date.]

Knock on wood. I'll be honest - if we make that date, great. If we don't, that's fine too. I think we've got a game for the mass market there. If you look at a game like Runescape, or Maplestory (five million players there) millions of dollars in revenue just in the last few months. It's an important game for us.

Is the Free Realms team to the point where they're moving around the dividing line for microtransactions? Between cosmetic items and gameplay items?

Free Realms' microtransactions are pretty far along. We are actually at the point where that stuff is getting decided. I think we have it dialed in just right where mostly the stuff you can buy are things you can visually see. Visual differentiators. Some gameplay stuff, but nothing that I would consider too over the line. You're not going to be buying power-ups. I think we've got it dialed right, but truthfully we won't know until we go into Beta and put it in front of other people. I truthfully think it will be a lot of fun.

"My dream is that the current generation of MMO players will see this as the game to introduce their own kids to the genre."

I'm trying to steer us away from the concept of rentables. The notion of 'you pay a microtransaction to only rent something for 2-3 months.' It bugs me as a player, so I want us to go towards permanently buying stuff. The biggest debate we're having internally is whether we should go with spending money from the wallet. Should it be 'coins' or should it be dollars? I have mixed feelings about that. I have kids and we use iTunes, it's kind of tough to say that that model doesn't work well.

I think the dollar model is clearer, but we did a survey and it came out 50/50. I was shocked by it. I was fully expecting it to go 'coins'. As a parent I like the dollar system, where I can know exactly how much value there is in an item. You sell me a song for 99 cents? I get it. You're selling me this shirt in-game for 99 cents? I get it. You sell me a shirt in-game for 99 coins? Well, then my next question is how much is a coin worth? It's definitely a tastes great less filling kind of argument.

What are the arguments for a coin system, just to go over that?

Well, you can do smaller denomination transactions more easily, right? There's a reason that songs on iTunes aren't 20 cents. Every transaction carries with it a fee that we have to pay. That fee doesn't shrink just because it's a small amount of money. Those kind of low end fees are things you can't avoid. The other element is that you can sort of disassociate the coins from real money, get that element out of the game so the kids are just having fun. With Free Realms we're working to make the game purely on the fun side of things. We don't want to pull the kids out of the experience. That's the question.

I'm playing that game every day now, pretty much. And really playing. A few months ago I couldn't say that, it was sort of a loose collection of content. We're in the middle of focusing now - there are 25 minigames we're working on. There are five core games with five variants each. To kids it's going to feel like 25 games, because they play pretty differently. Then we're doing chess and checkers and the racing game. Then the card game, which is built right in. Then the card game, built right in.

We're doing some interesting tie-ins with the game. Everything with the game is a class. Everything. We're going to have a card-collecting class. We really have this wired. In racing, you're going to have a garage attached to your house. You're going to be able to upgrade your car, do some pretty crazy stuff there. This is where microtransactions will be great to use. Here's a great example - different exhausts for your car. Like flowers. Imagine you're playing Mario Kart, and someone cuts you off with daisies coming out of their exhaust pipe. That's a great example of something I don't think anyone would mind paying 99 cents for. A speed boost, where you lose because it's something someone paid for, I don't want that to see anything like that.

"I can definitely see us going elsewhere with the Free Realms franchise. Free War, that sort of thing. I see a lot of room for opportunity - not necessarily in the Free Realms setting but in the Free Realms universe. I'd really like to explore that. "

I think it's the difference in mindset. I didn't grow up as an arcade gamer, there are some people in the company that did. The idea of putting in another quarter to continue the game really bothers me. We're probably more drawing the line around what's behind the velvet rope than what's behind microtransactions. It's the same thing with the Live Gamer stuff. The game has been designed from the ground up not to be gold farmable. All the microtransaction stuff is no-trade. All the rare stuff is going to be limited to places where you can't really farm it. It's about time, a physical amount of time. It's about random locations so botters can't macro something together. We're putting some focus into that because it's a big issue for us.

It generally seems as though these small issues are just as important as the big-picture ones for this game.

Free Realms is a great example of this mantra of quality we have. My dream is that the current generation of MMO players will see this as the game to introduce their own kids to the genre. That's got some simply amazing stuff in there, just not quite ready to show yet. It's not in yet, but it's being actively worked on - the card battle game is going in there. Both demolition derby and the racing car game will follow that. Soccer will follow that. There's some coolness there. The combat in the game is surprisingly deep. There's a lot more variety there because of the number of classes in the game.

We went through three iterations on combat. We went to normal MMO, we went to turn-based combat, and then we went back to sort of a more-realtime-than a traditional MMO system. A kind of hybrid. The turn-based one was really interesting. It was good, and we were trying to do something super-new. Everyone thought it was too slow. We scrapped the system. It was a like three months of work down the tube. The first time we did combat was six months down the tube. SOE is changing as a company, we're really taking our time.

I can definitely see us going elsewhere with the Free Realms franchise. Free War, that sort of thing. I see a lot of room for opportunity - not necessarily in the Free Realms setting but in the Free Realms universe. I'd really like to explore that.

How does the move to SCE figure into this?

".. how we're doing secret identities in DC Universe Online. We are doing a completely different system there than what people would probably expect with secret identities. We are doing something incredibly unique. "

It sort of touches on the kind of access we're going to have in the future. This gets into a little bit of deeper discussion, but the main thing we're getting now is time. SCE makes games. Now that we're working with a company that makes games for a living, if we need to take extra time to get something done that's really core to the business. That's something SCE understands. We really enjoyed our time at Sony Pictures, but they weren't a game-focused company.

One of the things we've found really interesting is how the Denver studio has begun to connect with the other SOE ventures.

I really like small studios like that. I think they're up to 20 people now. They're not just doing Champions of the Force and Legends of Norrath. The trading card game in Free Realms is their project. The operatives, you can figure the system in there will lend itself really well to what Denver offers. One thing that's important to remember is that they're not just a one-trick pony. It's not going to just be 'a card game in every game'. Denver is about collectible digital objects. They also have the Pirates! constructible strategy game, and that's a strategy title. We have big plans for what we want to do with these folks. It involves building these technologies into our games, but in different ways.

A great example is how we're doing secret identities in DC Universe Online. We are doing a completely different system there than what people would probably expect with secret identities. We are doing something incredibly unique. I don't want to lead you too far down that path ...

Thanks so much for your time, sir.