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Ryuu96 on 14 February 2024
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PlayStation's recent financial report is really telling, despite pulling in record revenues, it sounds like the rest is negative news.

  • Despite a record revenue, their operating margin is a quite bad 5.9%.
  • Didn't meet their expectations over the Holidays, revised forecast down from 25m to 21m.
  • PS5 entering "latter stage of its life cycle", expects hardware sales pace to start falling from next fiscal year.
  • They will put more emphasis on the balance between profitability and sales.
  • Their COO talking about how SIE doesn't necessarily have a deep understanding of how their work is being translated to growth, sustainable profits and higher margins.
  • Drastic price cuts on PS5 like the PS4 are difficult as room is limited to cute production costs on PS5 vs PS4.
  • No plan to release a major franchise titles next FY (April 2024- March 2025)
  • Heavily hinting at layoffs to improve profit margins: "We are reviewing measures for further improvement in profitability in advance of the annual forecast results announcement this May.""

I mean sure, even with a light 2023/2024, PlayStation is still absolutely spanking Xbox but their business on its own does not sound that healthy at all and that's with double the amount of consoles sold as Xbox, Lol. I understand why people would be upset about Xbox's change in business strategy but I do believe they're setting themselves up to survive whatever the future is.

I'm going to be real, I truly believe that only Nintendo has a healthy console business right now and it's a combination of Nintendo's uniquely positioned hardware which sells at a profit plus Nintendo's AAA are fairly conservative budgets, Nintendo doesn't chase after insanely photorealistic graphics, they focus on gameplay and graphics are a distant thought, art-style is more important.

I think there's a pit coming after Western AAA development and unfortunately they've put themselves in an awkward position, if Nintendo doesn't chase after photorealism, massive Hollywood blockbusters, nobody gives a shit, but if Sony or Microsoft don't have the absolute best graphics and biggest titles, they'll be mocked for it. I like that Microsoft's AAAs look more conservative in their budget cause it's safer for the studio.

You can still have an amazing title, which isn't tens of hours long, which doesn't have the absolute best graphics imaginable.

The console market has a ceiling and Sony has been hitting that ceiling since PS2 gen, meanwhile budgets are absolutely exploding causing margins to be really slim, Sony is practically carrying the high end console market but it still doesn't look good enough for Sony. Outside of the console manufacturers, Publishers will need to have a long hard think about AAA development before it's too late.

Last edited by Ryuu96 - on 14 February 2024