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EpicRandy on 02 June 2024
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PotentHerbs said:

There's no way Sony is stronger in the PS4 generation compared to the PS5. For one, they are able to sell their hardware, software, and subscription services at higher prices. The latter especially ensures the PS5 to be more sustainable than the PS4. 

By strength, I was speaking of their ROI, those have dropped significantly over the last 2 years, and as PS4 support fades. Yes, they charge more per title and hardware but cost inflation has been brutal. That's why despite record revenue for 2022/2023 their profits are still significantly down.

PotentHerbs said:

Not to mention, Sony has already projected that the PS5 will be their most profitable console, so the temporary decrease in their profit margins doesn't seem to be a major worry over at Sony.

If this refers to the doc in the OP they were referring to PS5 by years and mixing in PS4 2020+ profits, if not, please add a source and check if they didn't use the same trick of "PS5 gen". Also, they defined the most profitable in absolute terms instead of a ratio over their investment, but it's the latter that would give them strength to garner investment into PlayStation not the former. And define "major worry" Cause Sony is doing studio closure, and layoffs while also increasing PC support, I can understand those moves if they react to a situation they worry about, if not then that's a mess. 

PotentHerbs said:

- Continued expansion of the installed base: 
Increase the userbase of the PlayStation 5. Not sure how this would relate to PC as I don't see why Sony would classify their software sales as an install base. They also didn't mention a hypothetical PC launcher in the mid term that would fit this description. 

You write here, for some reasons I thought consumer base in general but that said Playstation 5 is tracking under the PS4 right now, so if things continue this way the expansion in PS5 install base throughout the gen will result in a reduction of install base gen to gen.

PotentHerbs said:

- Drive consistent revenue from Content, Services, Peripherals:
While live service is going to be a major factor, I wouldn't underestimate how much more profitable PlayStation Plus can be as a supplementary service, as well as many of their peripherals that dominate the charts. 

I was focusing on the Content part with my previous post but I agree with your assessment for the Service front. The increase in peripheral revenue, IMO I'm not sure, it depends on what has driven those and who they were able to reach. PSVR 2 and PS portal sure have generated a lot of sales at their release but it remains to be seen if those sales will be sustained throughout the gen or if it can be replicated with other peripheral.

PotentHerbs said:

- Thoughtful investments in key innovation areas: 
I'm not sure how you came to the conclusion that there would be no studio acquisitions for sure. Buying smaller developers/support studios is not a major risk. I feel like this is related more to something like Audeze or Gaikai, specialized acquisitions that can help out a subset of SIE.

I think right now pretty much any risk is a major risk.

PotentHerbs said:

- Expansion of franchise reach: 
Could also mean more PlayStation Production films, toys, merchandise, or even theme parks that Sony has recently mentioned. 

I agree, I thought I added mention to those in an edit but it was lost somewhere.

PotentHerbs said:

- Continued financial discipline: 
I don't take this as changing the console business model significantly. If Sony was going to change the status quo, they wouldn't have reiterated their stance on their single player exclusives, once again. It could mean more surefire projects, safer acquisitions, less hiring, etc.

But they already have made significant changes, driving the most recent investment towards GAAS, and announcing more support for PC. Not to mention investments in GAAS are not surefire things they are high-risk high-rewards and there will probably be more failure than success there.

IMO some other upcoming changes will include:

  • Longer support for Gen 9 after the start of Gen 10.
  • Ps5 Pro / Gen 10 to avoid a subsidized model (sold at a loss)
  • Further improvement of PC support