Sony says it can not ignore the Switch

[EricHiggin]

Lawlight said:

EricHiggin said:

Takeda says "Our greatest risk now is losing our intensity". He is saying if PS4 sales start to slow, profits will most likely become less because simply jacking up the price of PSN isn't going to cut it, and can't last. There's lot's of other content they can sell like exclusive PS games, but those ever increasing console sales numbers are strong indicators of how the platform is doing overall.

With Switch potentially taking attention away from PS4, it makes it harder for PS to make money. Far from impossible, but harder. It also makes shareholders wonder how long PS4 can be 'milked' if it's user base growth is slowing. Sure PS5 is coming, but that's another gen and potentially a fresh start. We saw what that did to PS3, Wii U, and XB1. We also saw what it did for PS4 and Switch. It's anybody's best guess at this point in time.

While trying to sign more PS4 owners up to PSN, or get them to buy more games, exclusive games, etc, PS will surely want to keep consoles moving as much as possible. Not only does it allow for easier game and PSN sales, but the more people locked into the PS4 community, the less that will be tempted by Switch. The reason the PS2 was so successful, was due to it's early stranglehold of the market share, as well as overall unit sales.

Shareholders don't always care most about profit. There are many times where companies will announce record profits and even see their stock prices fall. Why? If the company is making money by milking a product, and doesn't have a bright, clear outlook for the future, it scares people off. Just look at AMD, the makers of the PS4 APU. Their stock increased an insane amount over a years time, all because Ryzen was on it's way. Meanwhile, AMD was still losing money during that entire year. The shareholders cared about the future, Ryzen, and the potential it would bring. Now Ryzen is on the market, AMD is making money, yet the stock price has basically flat lined. If PS4 sales slowed and Switch sales continued to increase, traders would sell their SNY stock and buy Nin stock.

With PS4 being as strong as it is, $199 was unnecessary, even against a $189 XB1S. I would almost bet the reason that PS4 was $199 for BF, was to give PS a good idea of what price range the PS4 needs to be at to make sure they aren't losing too many sales to Switch come next year. They know how PS4 sells at $299, and they now know how it sells at $199, so they can decide on what price is necessary to keep sales and momentum strong for the first six months of next year. They don't want to throw away money, but they also don't want to lose potential customers.

Before we go on - AMD shares are lower now than at the beginning of the year so not a great example. Now you said a lot of things so let’s keep it simple:

What do you deduce from the strategy he mentions when he said they have to keep the tension in several businesses? Recap, this is what he said:

we're working to get more customers paying continuously for content, for example through paid subscription services.

AMD shares dropped recently yes, but they have been up and down a few dollars for quite a while. Overall, they've basically flat lined.

"More customers" "continuously paying" "subscriptions". You can take that as either convincing existing, non PSPLUS, PS4 customers to pay, or acquiring new PSPLUS customers through new PS4 hardware sales.