Sony PlayStation cross-platform game strategy

[Deleted member 11852]

I've worked for a few companies where they took a couple of years to realize revenues / incoming customers isn't a gauge of how well the company is doing. Fortunately the last one realized this and turned things around, no longer engaging in nonprofitable business. The first year the revenue dipped but the profits climbed. Now many years later it's substantially better off and profitable for all the business brought in.

Yup, many new business models are predicted on taking a losses. Amazon's business plan from the outset was to turn a profit within five years because their profit model was based on volume and it took then five years to get the volume of customers to achieve that profit. It's not always possible;e to turn customers into profit if having a lot fo customers also comes with a lot of costs. Some costs scale proportionately and some scale disproportionately.

And there's nothing wrong with this, but just waving massive revenue figures around without such context is neither helpful or transparent. I'm always dubious about seeng revenue numbers without any other context.

 

[iroboto]

And there's nothing wrong with this, but just waving massive revenue figures around without such context is neither helpful or transparent. I'm always dubious about seeng revenue numbers without any other context.

Typically this is the way things are in the stock market world however. Investors are willing to invest as long as revenue is super high, showcasing potential for large long term profits later on.
Profitability = sustainability/surviving. Something we know MS can bankroll.
Revenue = Growth

In investors eyes, any new business expansion (like Game Pass) they want MS looking to claim as much of the market as possible. More market capture will equate to more profitability in the long run. So right now they should be focusing on growth

 

[Deleted member 11852]

Typically this is the way things are in the stock market world however. Investors are willing to invest as long as revenue is super high, showcasing potential for large long term profits later on.

Uhh.. which market allows trade in public stocks that doesn't also require the traded companies to publish detailed financial data that implicitly includes proftis/losses? I've never heard of one. You literally have to publish this information to be trades in almost all countries.

You won't get many investors if your finances are opaque but venture capitalists often gamble with other people's money.

 

[iroboto]

Uhh.. which market allows trade in public stocks that doesn't also require the traded companies to publish detailed financial data that implicitly includes proftis/losses? I've never heard of one. You literally have to publish this information to be trades in almost all countries.

You won't get many investors if your finances are opaque but venture capitalists often gamble with other people's money.

P&L is calculated all the time. Not all detailed P&L statements will make it all the way to the public. Most of these documents are confidential to shield them from competitors.
P&L is still present, it's only rolled up with several services to ensure that competitors may not be able to isolate the amount of growth/expenditure they are investing towards a certain area.

I'm fairly positive this is normal business practice.

IIRC, this may fall under Roll Up accounting practices. But I'm not an accountant, so. I dunno. Our company owns several separate industries and we run them as separate companies, but we have 1 stock that represents the group. So I'm sure we are rolling up some things here to account for shortfalls in the weaker areas and so forth. I don't believe our competitors know our P&L of the individual areas. We've lost large business in the past when the companies we want to sell our product to, actually figured out they could do it themselves for instance after we pitched them. They are now our competitors in this space.

 

[manux]

Uhh.. which market allows trade in public stocks that doesn't also require the traded companies to publish detailed financial data that implicitly includes proftis/losses? I've never heard of one. You literally have to publish this information to be trades in almost all countries.

You won't get many investors if your finances are opaque but venture capitalists often gamble with other people's money.

Companies can lump things together in such a way that the information is not possible to find while fulfilling regulatory requirements. Try to for example figure out how many consoles MS has sold or what amount of revenue and profit sony got from 3rdparty sales versus 1stparty sales. Even things like is gamepass profitable is impossible to know for sure.

 

[Deleted member 11852]

Companies can lump things together in such a way that the information is not possible to find while fulfilling regulatory requirements. Try to for example figure out how many consoles MS has sold or what amount of revenue and profit sony got from 3rdparty sales versus 1stparty sales. Even things like is gamepass profitable is impossible to know for sure.

Absolutely, Apple rarely break down sales to particular models of Mac, iPhone or iPad. but fundamentally you can read their report and know which products are selling and profitable.

All I'm saying is that revenue numbers on their own are pretty meaningless. Lots of companies have gone out of business with massive revenue numbers and lots of companies have made massive profits. There isn't any real correlation. You may as well report what colour the bathrooms are!

 

[iroboto]

Absolutely, Apple rarely break down sales to particular models of Mac, iPhone or iPad. but fundamentally you can read their report and know which products are selling and profitable.

All I'm saying is that revenue numbers on their own are pretty meaningless. Lots of companies have gone out of business with massive revenue numbers and lots of companies have made massive profits. There isn't any real correlation. You may as well report what colour the bathrooms are!

Pretty sure there is a strong correlation between profits, revenue, margin, units, debts than there are color bathrooms =P

Obviously this is more scrutiny for a smaller company to be able to take on so much debt risk in favor of growth. But a company like MS, Amazon, Google, these risks are relatively small in comparison to their profits. Smaller companies approaching this style of strategy are often expected to be purchased by larger companies.

Though, discord seemed to refuse that.

With respect to your statement however, I believe only the tech industry has gotten away with this type of thing. I don't know other industries that behave like this, or are treated this way by investors. Typically they shouldn't, and if they are treated like that, I've noticed analysts calling it out if that's correct. Beyond Foods comes to mind.

 

[BRiT]

You may as well report what colour the bathrooms are!

The floors and walls are brown; sometimes the ceilings too...

 

[Deleted member 11852]

Pretty sure there is a strong correlation between profits, revenue, margin, units, debts than there are color bathrooms =P

Not much. A small company with $10,000,000 revenue and a 30% profit margin may be a better investment than a medium-sized company with $40,000,000 revenue and a 5% profit margin. There's really no correlation at all. Apple isn't the company with the most money because it sells the most products. PCs vastly outsell Macs and Android phones vastly outsell the iPhone. Yet Apple extracts far more profit from it's revenue in these businesses than the vastly greater combined revenue of their competitors in the computer and phone business. ¯\_(ツ)_/¯

 

[PSman1700]

yes it's all a question of priorities / budget
i'm 41 and only game maybe 5 hours a week now, back in time when i was 15-20 i would play maybe 4 hours a day, PC might have been a better choice then , though in that period i was litterally buying every console ! Even had a PC with a Geforce ! (5200 IIRC) I only stopped at the 360 release.
Now my PC is only used for internet, mails etc... a netbook is more than enough.
Consoles are still easier to use even today.

other spendings now too, other priorities ! (next month 4 new tires --> 600+€ !)

But for best versions of games, if budget is not a problem, PC have always been the best place since the coming of 3d cards.

Yeah i absolutely understand, the average joe perhaps doesnt even care about higher settings, ray tracing and all that. A PS5 is just a 400 or 500 dollar buy and your done, games arent going to look massively worse (for many DF even has to point out the differences). my sister asked what she should buy a new gaming pc or PS5, where i said get a PS5 since its primary used for gaming and she doesnt see the difference anyway between a game running a 2080ti or a ps5.

Not every sale is equal. Sony gets a lot more money from their 1st party games. Another thing is majority of money is made from initial expensive sales. The total sales number can be inflated as it could contain all the cheap discount sales as well. Looking at money made from 1st party games versus other games would be good metric to use.

True didnt thinkoff that, that 17% is quite impressive then yes.

 

[chris1515]

The next game to release is Uncharted 4. Horizon Zero Dawn profit on PC is very good and they gain new players in country where PC is bigger than console.

 

[manux]

I would be tempted to buy uncharted 4 for pc. One of my all time favorite ps4 games. If they do justice to it with the port then I think I'm in.

 

[PSman1700]

Not so much into uncharted but guess its a nice experience for many. If done well could play/run quite nice i think this series would fit with 60fps.

Also gonna double dip forbidden west (ps5+pc down the line)

 

[Inuhanyou]

Cant squeeze more blood from a stone. Once they started putting games on pc its clear their strategy must be to gain a new audience on pc when playstation players have stopped buying in bulk.

Which to me questions why they would attempt days gone rather than uncharted or something that is already been out sales wise for many years. Days gone wouldent give sony many sales. Its the epitome of mediocre software, only its production values as a first party title standing out

 

[see colon]

Cant squeeze more blood from a stone. Once they started putting games on pc its clear their strategy must be to gain a new audience on pc when playstation players have stopped buying in bulk.

Which to me questions why they would attempt days gone rather than uncharted or something that is already been out sales wise for many years. Days gone wouldent give sony many sales. Its the epitome of mediocre software, only its production values as a first party title standing out

Because they have nothing to lose with Days Gone. It's a new franchise that doesn't have deep roots with the Playstation fanbase because there is just one game in the franchise. The same is true with Horizon. Look at how some Playstation fans reacted to even these new franchises coming to PC, acting as if they are being somehow slighted by the game appearing on other platforms. Now imagine how upset they would be if they started with Uncharted, a series with 4 core titles, a remastered collection, and a standalone DLC that got a physical retail release.

I also thing that in the case of Days Gone, they have faith in it finding an audience. And I mean that both in sales and finding a fanbase. Horizon I think had proven itself to be successful, but all reports indicate that Sony wasn't really happy with Days Gone's sales, so getting some extra sales from a game that runs on easily portable middleware can only be seen as a positive.

 

[PSman1700]

Another article

https://www.google.se/amp/s/www.pcgamer.com/amp/uncharted-4-pc-release/

 

[pjbliverpool]

The next game to release is Uncharted 4. Horizon Zero Dawn profit on PC is very good and they gain new players in country where PC is bigger than console.

Definitely the biggest IP to come over so far. Bodes well for the future I think.

 

[manux]

Did we miss this nugget of playstation IP's coming to mobile platforms. By the sounds of it pc releases have been worth it. And it looks like sony expects that market grow from it's small initial state.

“In FY21 we will begin to publish some of our iconic PlayStation IP on mobile and we anticipate that in 2021, that will not provide a significant profit flow, but we do anticipate that as we learn from that experience, and as we increase the number of titles that we publish on mobile, the contribution from both PC and mobile will start to become steadily more important as time passes.”

“We are beginning our journey to take PlayStation first-party IP off console,” Ryan said. “We started last year by publishing two of our games on PC, Horizon Zero Dawn and Predator, and both were profitable, and really had a very successful publishing debut. We will continue that in FY21 and we will continue that beyond.

“We have been thinking about how players enjoy our content and have had some early success with experimenting with mobile games and apps to provide more choice to gamers. Mobile is just one of the areas we are exploring to reach millions of gamers beyond our platforms.

“PlayStation has a huge catalogue of diverse first-party IP that can transition to smartphone gaming and complement our AAA games or live service games. We are exploring the mobile market with some wonderful PlayStation franchises so please stay tuned.

https://www.videogameschronicle.com...playstation-ip-to-mobile-this-financial-year/

 

[PSman1700]

Wow really good news, go Sony!

 

[Silent_Buddha]

Did we miss this nugget of playstation IP's coming to mobile platforms. By the sounds of it pc releases have been worth it. And it looks like sony expects that market grow from it's small initial state.






https://www.videogameschronicle.com...playstation-ip-to-mobile-this-financial-year/

That really does sound like they plan to port as much of their PS IP as possible to mobile and PC. I would love a remake of ICO on PC.

“We are beginning our journey to take PlayStation first-party IP off console,” Ryan said.

Regards,
SB