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EricHiggin on 09 December 2017
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Lawlight said:
EricHiggin said:

PS4 does offer more services than PS2 ever did, and charges for them, but the article is mostly about the stock price and where it's potentially headed. A decrease in PS4 sales later on does mean something. Whether it means new customers are buying another console brand instead, or the PS4 is seen as old and out of date, it has importance. Especially in terms of when shareholders can expect next gen hardware to hopefully continue the PS4's momentum.

There is a limit to overall unit sales, but that limit is much higher than 100 million, even 200 million sales. PS4 could probably sell 500 million, if they could find a way to convince many more people to sit on the couch and game, instead of doing something else with their time and money. Convincing those non gamers is very tough. Convincing an existing gamer, who isn't into online gaming, or anything requiring a sub, is easier, but still tough. Convincing a brand new user, is much much easier period.

Let me put it this way. If your a dog lover, and you want to be able to teach a dog tricks, what's the more logical option? Go to the pound/shelter and buy an old beat up dog, or find a new litter and buy a young pup? If you have someone who has owned a PS4 for 3 years now let's say, and they still haven't bought into PS PLUS or any other service, are you as a PS businessman, going to try to convince them to buy into one, or are you going to push more console sales knowing there is plenty of room to grow and for every 2 or 3 new customers who buy a PS4, you are guaranteed one or two subs as well? There is a reason they say you can't teach an old dog new tricks. Now everyone knows that's false, that old dog can learn, it's just a huge pain in the butt to accomplish that goal. A new young pup however, once it's slightly matured, will do what you want for the most part quite easily.

As for keeping PS4 users on board, if you own a PS4 now, and switch to Switch, odds are that you fit the Nin/Switch ecosystem better. You may also just want variety and will play on both platforms. PS4 can offer as much as they want, like PSVR for a more than reasonable reduced price recently, but the true way to really hold onto these gamers, is to offer them something as similar as possible to Switch. This is why it is important for PS to pay attention to how the market is reacting to Switch, and decide what the best future approach is. Maybe it's a PS Switch, maybe it's more affordable VR, maybe it's a super cheap PS4. Highly affordable PS4 and PSVR, are much easier than making a PS Switch. All are possible if deemed necessary though.

Sony forecast a decrease in PS4 sold since the beginning of this fiscal year - how did that translate in share price? Let me help you - the share price still went up. I mean come on - the idea that Sony's share price depends on the number of PS4s sold and not the profit of the gaming division is kinda silly.

And no, I don't think it's easier to get an existing owner to spend an additional $10 a month vs. a new user spending $300 to get a new console. And your dog analogy is just as silly. Again, with the PS+ example, it's much easier to make PS+ more attractive to users than get people to buy a new system. Look at PS Vue - 670k subscribers in the US paying at least $30-$75 a month (growth of 570k in 1.5 years). That's the equivalent of 67,500 to 167,000 new PS4s each month. Do you really think it's easier to grow PS4 sales by that much each month in the US? I don't think so.

So they announced it around March then. How ironic that SNY stock dropped from late March to mid April, due to that poor sales forecast, but then rose from there, more than likely because the sales numbers themselves showed promise otherwise. The more consoles they sell, the more profit they make. It's not like they can't make profit without more console sales, but it's much easier that way and it's also easier for investors to have an idea of where the profits will land and the share price is headed. Console sales are something they can constantly watch, where as much of the other information they require is locked behind quarterly investor meetings. SNY also did a smart thing, having the sales numbers add hype instead of being a letdown, which would help the stock price to rise.

How did PS get those subs in the first place? By selling PS4's. How many of those new Vue purchasers are existing PS4 owners vs new PS4 owners? How much did PS have to give up to get those new subs vs what they had to give up to sell more consoles? Just because you find the analogy silly, doesn't mean it's not true.

You also said "And no, I don't think it's easier to get an existing owner to spend an additional $10 a month, vs. a new user spending $300 to get a new console."  So you agree with me then? Focusing on hardware is a much easier way to increase console sales, as well as subs, since the numbers show for every so many new PS4 owners a certain amount of subs come along with those purchases. If you have little competition, putting more focus on sub sales actually makes sense. If you have competition, like Switch, when it's this early in it's lifespan and this hot of an item, you want to get as many people on board your own platform as possible before it's too late. Once you've exhausted your sales potential, that's when you really need to focus on subs. Truth is, by that time, in the console industry, if you don't have new next gen or Switch competitor hardware ready to go, your going to pay for it one way or another.