Playstation 5 [PS5] [Release November 12 2020]

[Seanspeed]

If they had room to reduce prices and shift more units, why haven't they? They actually prefer to reduce forecasts rather than maintain historic growth? That seems backwards to me

Well Sony are likely currently selling basically every PS5 they make without too much concern. They may not be flying off shelves the instant they arrive like they used to, but there's probably not a lot of worry of them sitting on shelves unable to be sold at all.

But really, they did use heavy discounts in the last six months or so of 2023 to push more sales as they cleared out all the OG models they could. They may not have quite hit the sky high sales expectations of internal forecasts, but sometimes such forecasts are also unreasonably optimistic(aka greedy) and the actual resulting sales were still very good for them as a result of this.

Yet now the new, notably cost-reduced version of the PS5 is sitting at higher prices again, and Sony are expecting lower sales as a result and they seem fine with this strategy. Why? Because I think it's become more important to them to be able to tout profit margins on their financials. Classic short-term over long-term thinking. It only seems like an obviously bad choice to us, but to bean counters(and look at who the new interim Playstation head is...), it can look very different. I'm sure they're betting that sales will stay high enough to justify all this, but it's still telling they seem fine with this only a few years in.

 

[Seanspeed]

I get from your post that you believe that Sony and devs are having bigger profitability opportunities than before.

To some extend, yes companies do act against the consumer and find excuses.

But if Sony could increase software and hardware sales to maximize profits like they could in the PS1 and PS2 days I am sure that would have remained their current strategy. But they expect contraction of sales. If that's the result of them keeping margins high as an easy solution, thus making gamers less willing to buy, that's them sabotaging themselves. If that's the result of bigger challenges and changes in the nature of the industry, then it's inevitable

At this point I feel that a lot more are at play than simply Sony and the developers.

The production of software has become more complex.

A lot more companies involved in the production of goods and services are trying to increase profits at the expense of their clients which are other companies.

These added costs or strategy changes will reflect eventually at the final cost or utility that the consumers are paying for, as every company involved is trickling down their added margins on each other until it reach us.

I don't think Sony is getting huge margins from PS5 hardware. The manufacturing process between Slim and PS5 aren't significant. The days when consoles were highly simplified after 3-4 years from launch are gone. From the day Sony couldn't be the proprietary owner of their hardware anymore we saw a trend where the hardware doesn't get significantly simpler and cheaper to produce or sell. Hence there isn't much room to drop prices and attract even more people.

AMD need their profit margins too. That's something Sony didn't have to deal with in the PS1 and PS2 days. Therefore they keep prices higher to cover AMD's revenue

I dont think Sony are getting huge margins on PS5's either. But I think they'd like them to be as high as possible, even if it comes at some expense to sales. Otherwise they could absolutely reduce prices if they really wanted to. It's been a classic, proven strategy throughout console history. The Slim is absolutely saving them a decent chunk of money. It was the whole point of the project. It would not have been cheap to redesign all this stuff, but they knew it would be worth it.

I think there's likely no chance that AMD or any other of their bigger cost suppliers are charging more money today than they were back in early/mid 2020 when they were first ordering final manufacturing parts.

Companies, especially ones that get especially greedy or arrogant, are absolutely not immune from sabotaging themselves with short-term thinking. This isn't some rare thing that we must discount.

 

[dobwal]

No point in cutting prices to drive additional sales if they don't have the units to support the additional demand. Sony would have have to invest in additional work shifts or additional production lines to accommodate more volume but we are close to the apex point for the best selling console during a generation. Traditionally sales for Sony consoles start to fall after the 3rd or 4th full year on the market. Software tends to follow the same curve.

 

[metacore]

The days when consoles were highly simplified after 3-4 years from launch are gone. From the day Sony couldn't be the proprietary owner of their hardware anymore we saw a trend where the hardware doesn't get significantly simpler and cheaper to produce or sell. Hence there isn't much room to drop prices and attract even more people.

AMD need their profit margins too. That's something Sony didn't have to deal with in the PS1 and PS2 days. Therefore they keep prices higher to cover AMD's revenue

Interesting perspective. With regard to chip cost and die shrinks. I would think it more of issue with cutting edge wafer cost at TSMC than AMD not allowing die shrinks to protect the revenue. Afterall both sony and microsoft using amd IP were allowed to shrink chips few times in ps360 and to lesser extent with already slowing progress in ps4xbone days. It is only now that something broke and usual motions are not happening. 5nm node capacity is available for long time. It would allow them to almost halve chip size with less mobo, cooling, psu and yet they are not doing it. Probably wafer cost is still so high that it cancels out potential savings from smaller chips.

 

[Scott_Arm]

I agree at the very least, GaaS is a very difficult nut to crack, enormous amounts of investment with low probability of viral success.

To be honest, I'm not sure games in general are a sound investment. I'd guess it's like restaurants and the vast majority of games fail. Immortals of Aveum is a pure single player game and it basically sunk a new studio in one game. I have no idea how so-called "GaaS" games fare compared to single player games.

 

[MCharta]

AMD need their profit margins too. That's something Sony didn't have to deal with in the PS1 and PS2 days. Therefore they keep prices higher to cover AMD's revenue

You also need to add margin of TSMC and evolution of their wafer prices.

TSMC's average wafer price jumped 22% in one year — nearly all semiconductor industry growth now comes from more expensive products, not higher production volumes

Shipments of 3nm wafers account for 15% of the company's revenues.

www.tomshardware.com

 

[Nesh]

You also need to add margin of TSMC and evolution of their wafer prices.

TSMC's average wafer price jumped 22% in one year — nearly all semiconductor industry growth now comes from more expensive products, not higher production volumes

Shipments of 3nm wafers account for 15% of the company's revenues.

www.tomshardware.com

Yes that was implied here

A lot more companies involved in the production of goods and services are trying to increase profits at the expense of their clients which are other companies.

These added costs or strategy changes will reflect eventually at the final cost or utility that the consumers are paying for, as every company involved is trickling down their added margins on each other until it reach us.

 

[techuse]

To be honest, I'm not sure games in general are a sound investment. I'd guess it's like restaurants and the vast majority of games fail. Immortals of Aveum is a pure single player game and it basically sunk a new studio in one game. I have no idea how so-called "GaaS" games fare compared to single player games.

Immortals of Aveum was a poorly made product though. By and large, well made games typically return a profit.

 

[Nesh]

Immortals of Aveum was a poorly made product though. By and large, well made games typically return a profit.

What is considered a "Well made" AAA game by our modern expectations and standards require cream of the crop attention to detail in all fronts where every piece of the production, animation, graphics, sound, gameplay mechanics and progress, pacing, story telling and physics are ideally coordinated.

I see many games that show great talent and exceptional effort but fail in this coordination and consistency to meet present demands. It is almost impossible by common studios to reach that fidelity and coordination.

To create a "well made game" by today's standards requires exceptional effort where the teams surpass themselves. It a hard task to undertake even by big established studios who will often miss.

The projects are overly complex. Much more complex than movies. The industry changed to facilitate more immersive games, but can only facilitate only the health of extremely few games in the ocean of game production.

 

[cheapchips]

Immortals of Aveum was a poorly made product though.

I don't find that entirely fair. It didn't land the world building, gameplay or technology but it's 90% of the way there towards something that would have been received better. Every game is a disaster until the end of development and all that. It still might not have made money.

The performance capture / character work was excellent. Shame the story and script weren't! (in the demo at least)

 

[MCharta]

Yes that was implied here

TSMC ones are particalary notable IMHO.

 

[techuse]

What is considered a "Well made" AAA game by our modern expectations and standards require cream of the crop attention to detail in all fronts where every piece of the production, animation, graphics, sound, gameplay mechanics and progress, pacing, story telling and physics are ideally coordinated.

I see many games that show great talent and exceptional effort but fail in this coordination and consistency to meet present demands. It is almost impossible by common studios to reach that fidelity and coordination.

To create a "well made game" by today's standards requires exceptional effort where the teams surpass themselves. It a hard task to undertake even by big established studios who will often miss.

The projects are overly complex. Much more complex than movies. The industry changed to facilitate more immersive games, but can only facilitate only the health of extremely few games in the ocean of game production.

A game doesn’t have to meet AAA standards to be well made. Games like Deathloop, Hitman, Alan Wake, Hi-fi Rush and Armored Core are just a few examples that almost certainly had budgets comparable or smaller and are vastly better games.

Immortals is just the result of a steady stream of bad decisions in almost every area of its development. Technology, art design and game design are all poorly executed.

 

[Nesh]

A game doesn’t have to meet AAA standards to be well made. Games like Deathloop, Hitman, Alan Wake, Hi-fi Rush and Armored Core are just a few examples that almost certainly had budgets comparable or smaller and are vastly better games.

Immortals is just the result of a steady stream of bad decisions in almost every area of its development. Technology, art design and game design are all poorly executed.

The games you mentioned still required high production values/costs and skill. Especially Alan Wake and Hitman. And they could still financially fail. The majority of games released fail to meet market performance or quality standards or both despite the talent and capability.

Even as such Immortals exhibits exactly what I described. It is hard to make everything coordinate well. You see only a bad game, but there is actually tremendous work behind it's art, technology and design even if it is not executed up to the standards of other games. It is exceptionally hard to make a good game by today's standards. They are more complex. Most well made game's 20 years ago is crap by today's expectations in every department.

For example FF7, the most expensive game in it's time and considered as probably the best game ever made in 1997, is actually infested with broken and horrendous game design elements if played today. Room for error tolerance is narrower while the room for potential mistakes is much bigger.

 

[Scott_Arm]

Immortals of Aveum was a poorly made product though. By and large, well made games typically return a profit.

How many "well made" games as a service made fail? I'm also not sure that well made games in general actually turn a profit. Again, I don't know if there's any real data out there. I think it's more of a feeling people have based on the games they follow etc. The landscape of games is huge.

 

[techuse]

How many "well made" games as a service made fail? I'm also not sure that well made games in general actually turn a profit. Again, I don't know if there's any real data out there. I think it's more of a feeling people have based on the games they follow etc. The landscape of games is huge.

Perhaps this will be controversial, but I think almost every games as a service title ever made is quite poor. On the spot right now, I can't think think of 5 that I would consider to be well made. Fortnite, Warzone, Apex Legends and then I go completely blank. I don't like any of them, but they are unquestionably well made.

 

[Scott_Arm]

Perhaps this will be controversial, but I think almost every games as a service title ever made is quite poor. On the spot right now, I can't think think of 5 that I would consider to be well made. Fortnite, Warzone, Apex Legends and then I go completely blank. I don't like any of them, but they are unquestionably well made.

Beauty is in the eye of the beholder, so I'm not going to get into a list war. I will say there are games like Paladins, which maybe a lot of people don't even know exists, but it's been running for I think six years and it still gets updates and I'm pretty sure it's entirely battle pass/micro supported as it's a free to play game. I honestly cannot tell how successful live service games are as a whole, because there are a ton of successes and failures that I'm probably not even aware of. Same with single player games. There are so many you can't really be aware of all of them and their financial situations. Would be interesting to see an industry analysis, but I don't know if there's anyone doing that kind of reporting for free. I'd guess it's mostly consulting analysts that sell those kinds of reports.

 

[Seanspeed]

Perhaps this will be controversial, but I think almost every games as a service title ever made is quite poor. On the spot right now, I can't think think of 5 that I would consider to be well made. Fortnite, Warzone, Apex Legends and then I go completely blank. I don't like any of them, but they are unquestionably well made.

Minecraft, iRacing, No Man's Sky, Final Fantasy XIV, World of Warcraft, Forza Horizon 4/5, Rocket League, Path of Exile, Counterstrike, etc etc. Tons more I could name if I wanted to think about it.

The idea of 'games as a service' is not at all new and has been a successful form of gaming product for a while now, but it's only in the past 5 years or so that it has become this 'everything needs to have GaaS elements' sort of situation that's become intrinsically detrimental on actual game design of games that really just dont need it or at least would have been better off without them. That's the real problem. That we cant just have games be 'games you beat' anymore, no, these games need to occupy your whole freaking life now, giving you recurring goals and rewards for signing back in everyday for months on end, with the obvious caveat that they will push you into further purchases of some kind.

 

[Johnny Awesome]

Destiny, Sea of Thieves also come to mind.

I'm not sure it's really true that they are trying to GaaS everything as much as the narrative would suggest. Sure Avengers and Suicide Squad are easy examples that come to mind, but I'm not really seeing an explosion of failing GaaS games.
More like GaaSlighting.

 

[Nesh]

The games you mentioned still required high production values/costs and skill. Especially Alan Wake and Hitman. And they could still financially fail. The majority of games released fail to meet market performance or quality standards or both despite the talent and capability.

Speaking of which

Alan Wake 2 fastest-selling Remedy game, but yet to turn a profit

Alan Wake 2 has become the fastest selling Remedy game to date.

www.eurogamer.net

Still failed to make a profit

 

[Scott_Arm]

Speaking of which

Alan Wake 2 fastest-selling Remedy game, but yet to turn a profit

Alan Wake 2 has become the fastest selling Remedy game to date.

www.eurogamer.net

Still failed to make a profit

That’s really sad to read. Remedy deserves better. Game is top notch.