Playstation 5 [PS5] [Release November 12 2020]

[Tkumpathenurpahl]

In a time when people are struggling to buy groceries and heat their homes, it's not surprising that luxury items struggle. Even those that were very reasonably priced, such as Alan Wake 2.

Fastest selling indicates it may have done rather well outside of an impoverished market, as those who actually have disposable income bought it swiftly.

 

[Johnny Awesome]

They'll likely turn a profit when MS pays to put it on Game Pass for a year.

 

[Nesh]

They'll likely turn a profit when MS pays to put it on Game Pass for a year.

Depends how much it will need to turn a profit and if MS sees that amount as financially logical

 

[Johnny Awesome]

Of course. I think every GP decision gets made that way.

 

[fehu]

What just happened? I blinked and PS5 is a failure?
The narrative rebounded really hard.

 

[Nesh]

What just happened? I blinked and PS5 is a failure?
The narrative rebounded really hard.

Didnt understand what you were pointing to until I came across some news by accident. The investor response is just nuts. Share value nose dived by billions simply because Sony didn't reach the sales targets

 

[Nesh]

Actually it is the margins the key reason

Sony plunged $10 billion after its PS5 sales cut. But a bigger issue is its near decade low games margin

Around $10 billion of value was wiped off Sony's stock this week after it cut its sales forecast for its flagship PlayStation 5 console for the fiscal year.

www.google.com

Strange times for the gaming industry

 

[Tkumpathenurpahl]

Damn. Looks like the exclusives that drove people to buy into the platform might not have been worth those few extra $million from PC sales.

Short term thinking strikes again.

 

[chris1515]

Actually it is the margins the key reason

Sony plunged $10 billion after its PS5 sales cut. But a bigger issue is its near decade low games margin

Around $10 billion of value was wiped off Sony's stock this week after it cut its sales forecast for its flagship PlayStation 5 console for the fiscal year.

www.google.com

Strange times for the gaming industry

Part of the problem will solve with time, they didn't pay Bungie in a one time payment, they use profit and pay a part each quarter... It will end next fiscal year.

We know from Insomniac leak, releasing game too early in PS plus extra reduce profit and revenue cutting commercial lifecycle of a game like Horizon Forbidden West, Insomniac asked Sony to not put R&C Rift Apart in the subscription services before being profitable...

Control game budget, Connie booth was fired and replaced by Angie Smets because Guerrilla games is better with outsourcing than other Sony studio. For sure, the meeting with 500 millions budget for an X-men projection by Insomniac did not go well with Hermen Hulst and his team.

Short term, Helldivers 2 success can help for last quarter of the fiscal year. I think profit margin will improve in the next few quarter

 

[Globalisateur]

Damn. Looks like the exclusives that drove people to buy into the platform might not have been worth those few extra $million from PC sales.

Short term thinking strikes again.

Exactly. What we are witnessing is simply the predictable outcome of Ryan's strategy. In end of PS3 and most of PS4 era they were doing more risky Single Player ish AA projects (on top of the usual AAA projects that did not increase on PS5, actually slowed) but were doing more profits. For instance cheap games like Bloodborne, Driveclub or even Day's Gone were actually eventually very successful and made Sony plenty of profits (and good will to invest into PS ecosystem). An almost indie game like Resogun (that Sony still fully own) was probably the reason of many people switching to PS ecosystem. Where is Resogun 2? But I digress.

They wanted to make short term profits (Ryan is soon gone, probably with big bonuses) and thought they would trick people into double dipping into PS5 then PC. Wrong, people are not stupid. What they have done is encouraging Playstation gamers to invest into PC ecosystem, basically bringing their old Playstation money to Nvidia and Valve: The biggest winners of Ryan's strategy. If they don't revert to the old winning strategy (PS3-PS4), then Sony profits won't improve (but Nvidia and Valve will still beat new records).

 

[metacore]

They wanted to make short term profits (Ryan is soon gone, probably with big bonuses) and thought they would trick people into double dipping into PS5 then PC. Wrong, people are not stupid. What they have done is encouraging Playstation gamers to invest into PC ecosystem, basically bringing their old Playstation money to Nvidia and Valve: The biggest winners of Ryan's strategy. If they don't revert to the old winning strategy (PS3-PS4), then Sony profits won't improve (but Nvidia and Valve will still beat new records).

Executives looking for infinite growth loose sights on what makes their product basis. Its exactly like in that Jobs story about xerox. Much of the audience they are about to loose to pc are savvy high spenders, buying many games, and subscriptions, evangelizing platform for free. Loose them and after few years once new norm sinks in, wonder why the apathy from remaining casuals buying only fifa or cod. Just ask Microsoft but they don't care looking to excuse to jump out.

Considering valve cut, pc tendency to buy on sale, lost console subs an all knockoff effects , Im betting one typical "hardcore" spender on console might bring two to three times revenue than same one buying on pc.

They are skating on thin ice. Hardware is difficult to cost reduce. Once it's released, for a few years publishers are twisting their thumbs with crossgen. Removing last remaining advantage - exclusives will devalue the brand.

 

[wco81]

Have they put out a Naughty Dog game on the PS5 yet?

Has Spiderman 2 or Horizon Forbidden West or any other PS5 game sold systems?

Have they done a price cut yet?

Seems like plenty of things they could still do to sustain sales and extend this generation.

 

[Inuhanyou]

If they have no major franchise titles to be released I wonder if that means new IP or something similar? About their margins, smaller AA games like ratchet and quality gaas like helldiver's are the future. AAA can still exist but there needs to be less of them

 

[techuse]

With Spiderman 2 costing 300 million, how much of that was actually game dev? They built the game in 2 years and aren’t a large studio.

 

[Johnny Awesome]

It's crazy.

I still think hardcore console players switching to PC in droves is a myth though.

I know about 100 gamers, some PC and some console and almost none of them have switched from console to PC or vice versa in over 10 years.

There's a few more that switched to PC near the end of the X360 era around 2011 or so, but none since.

Even the few who switch have nothing to do with Sony's publishing decisions.

Probably a topic for a different thread, but it would be interesting to analyze the life cycle of a gamer. I have some theories....

 

[see colon]

Have they put out a Naughty Dog game on the PS5 yet?

Has Spiderman 2 or Horizon Forbidden West or any other PS5 game sold systems?

Have they done a price cut yet?

Seems like plenty of things they could still do to sustain sales and extend this generation.

You can't rush a game from a reputable studio without damaging the reputation of that studio, though.
Forbidden West was cross gen. Spider-Man 2 was the only first party non-VR PS5 game released last year. It undoubtably sold systems.
And a price cut isn't going to solve the problem of your margins being too slim. In fact, it's going to exacerbate that problem.

The problems Sony is having right now are the problems the industry at large is having right now. AAA development is too expensive. Sony has been all in on it since the later stages of PS3, but they haven't learned what their film arm has known for decades... You need a diverse portfolio with smaller and larger budget offerings. You never know when a movie like Blair Witch, that's shot on a shoestring budget, is going to blow up and make millions. The same things happen in games. Just look at Among Us or Vampire Survivors.

 

[Nesh]

It's crazy.

I still think hardcore console players switching to PC in droves is a myth though.

I know about 100 gamers, some PC and some console and almost none of them have switched from console to PC or vice versa in over 10 years.

There's a few more that switched to PC near the end of the X360 era around 2011 or so, but none since.

Even the few who switch have nothing to do with Sony's publishing decisions.

Probably a topic for a different thread, but it would be interesting to analyze the life cycle of a gamer. I have some theories....

Question for you. What do you think contributed to Playstation's popularity and what do you think comes into people's minds when they think of Nintendo?

 

[fehu]

From articles, I've read that they sail with just a 6% margin.
Ok, it's on huge numbers, but it's too thin! They just have to put on a row 2 or 3 not successful games and they go under.
Wasn't expecting this.

 

[AmFreak]

Sure, they only need to make the 2 to 3 most expensive games of all time and then sell 0 units.
And they won't go under then either, they would just have a negative FY, something that was the norm in the ps3 era and always happened in launch years before the PS4.
They also massively overproduced hardware and now are sitting on unsold stock thus the discounts, so lets see their margin next year when things should have normalized.

 

[Globalisateur]

You can't rush a game from a reputable studio without damaging the reputation of that studio, though.
Forbidden West was cross gen. Spider-Man 2 was the only first party non-VR PS5 game released last year. It undoubtably sold systems.
And a price cut isn't going to solve the problem of your margins being too slim. In fact, it's going to exacerbate that problem.

The problems Sony is having right now are the problems the industry at large is having right now. AAA development is too expensive. Sony has been all in on it since the later stages of PS3, but they haven't learned what their film arm has known for decades... You need a diverse portfolio with smaller and larger budget offerings. You never know when a movie like Blair Witch, that's shot on a shoestring budget, is going to blow up and make millions. The same things happen in games. Just look at Among Us or Vampire Survivors.

But it's not only about AAA. Some others publishers are thriving by releasing AAA games. Like From Software or Nintendo. What do they do differently at Sony to make so little profits comparatively?