But can you answer the question more specifically? Like what is Playstation, what does generate money for Sony and why people buy Playstation?
PlayStation is a platform in which they sell a console to its users who purchase it, and developers and studios create software for that console in which they pay royalties to PlayStation to do so.
To encourage more potential consumers to purchase PlayStation they also create their own software that is only available on their platform so that it entices people to buy their platform and not invest in another.
Everything else, would be a branch of this. That’s what I think playstation is, as how I view many platforms.
The majority of revenue for PlayStation comes from royalties of 3rd party software sales as well as profits from first party software and any subscriptions they happen to sell to their user base as well as any accessories.
People buy PlayStation because of a large heritage of having games that other ecosystems did not have; driven largely by their entrance to the marketplace with CD over cartridge, letting developers access vastly larger space at a fraction of the cost over a cartridge.
But back to my original point, it should be clear that the majority of PlayStation purchasers are driven by older gamers, largely because they grew up with PlayStation. But are children buying PlayStation in droves?
Nintendo doesn’t have that issue, children and families are still buying Nintendo. Tablets and IPhones have a big stake in kids growing up playing games.
So where does that leave PC, Sony and MS? Well PC has a ton of games that kids play, so many of them are playing Fortnite, Minecraft, Roblox, now palworld. So many of them engaged on twitch and social media. PC is stronger than ever in the younger markets.
Why would children want to play the types of games that MS and Sony are releasing today? They don’t have the connection we do with these brands. So they have a problem, the demographic that is buying these titles is shrinking, in 8 years I’ll be 50 and then you’re going to see a cliff of users fall off the platform and secondly the cost of releasing newer and stronger hardware keeps going up.
So what exactly should Sony and MS do if you want to think long term ? I mean let’s realistically look at the output from Sony the last two years and tell me how they are getting new young gamers on the platform to monetize for the next 30 years?
Because when we talk about long term, that’s what I think about, I think about demographics, the vast majority of millennials and Gen X have children now. Where are the games for them, where do they spend their time and on what devices, and how are they getting engaged. What games are made for them?
When you talk about long term, you’re thinking exclusives are the most important thing to driving people to keep buying PS. But I before exclusives I worry much more about demographics.