RoI might be lower, that's not an excuse to cut development staff.

Well, it is for Sony / MS and pretty much all of the industry with few notable exceptions.

For Microtransaction, I do agree it looks to become an unavoidable asset going forward, Sony is late but they are adjusting to it with their multiple GAAS projects.

They are hoping to cut staff, lower budgets, and keep all the actual profit.

I'm reading it more like the industry saw the issue coming, then Covid made them think the problem would go away and provide them with very high ROI, invested a hell lot, Then the Covid effect was a dud, and now they go from "invest as much as you can, don't think twice" to a "Trim the fat and recoup as much you can, think your move 10 times over".

I'm not saying you're wrong. I'm saying Sony is thinking of it wrong, and of course they are since investors care about immediate gains and not the long term. 

I have the same perspective as you as a consumer, this conversation is just me putting myself into CEO/shareholder's shoes and making sense of a recent decision. The only way I can make sense of the current action is if they are currently way under what was forecasted during 2020-2021 and that the next few years have been revised with way lower expectations.

Just because Sony and MS are doing something doesn't mean it's a good reason. People and companies do things all the time that have reasons that aren't good, or the reasons seemed good but it clearly didn't work out. I mean, the bloated budgets of videogames is something Sony did for a reason and it clearly wasn't a good one in the long run. 

Just to make it clear, I'm not trying to be combative. I understand WHY Sony is doing this. I just don't think it's the best way to do things. It's not helpful to the employees or the consumers, and it's just another way that greed is getting in the way of a passion of mine. I do appreciate what you're saying overall in that I don't think you're incorrect or anything. I know that money is what makes the world go round. But I don't think short term gains is the best way to get it. I mean, Nintendo hasn't been doing the short term gains the way the others have and theyve made more profit in the Switch era than almost all other eras combined. That shows us that the model these publishers are going through is not the only way to do it. While Nintendo has their own issues and I have my own complaints (full priced ports, poor ability to acknowledge mistakes such as joy con drift, etc) as a company I respect them more because they seem to have more concern over their employees well being than any of the others. We should really value that more. 

I completely reject the idea that Sony and Nintendo are not in direct competition with each other.

Sony does compete directly in the video games market. Both companies are selling video games that make you choose where to spend your time and money.

This argument is like saying The Saturn wasn't in competition with the PS1 becuase Sega was focused on Arcade conversions and Sony wanted new home IP titles.

You might want to take a look at that document again. In FY16 the PS4 made 1.2B in profit compared to the PS5's 1.9B profit in FY23 with Bungie on the books.  Also, what makes you believe that PS5 won't be as sustainable as the PS4 after the PS6 launches? PlayStation Plus is a major factor as to why PlayStation platforms are more sustainable going forward. Its not an outlier for the PS4, its more of a new trend set with the multiplayer paywall. That's not something that's going to drop off with the PS6 launch unless PS5 sales crater going forward. So yeah, the loss in revenue as well as profit, shows why PS5 sales nosediving isn't just a gamer concern as you originally argued. 

What makes you think Sony are less committed to single player games? Do you see the push they are giving Astro Bot? Most of their live service games are coming from studios they bought. None of their prestige studios, outside of Guerrilla Games, are focusing on live service. Even most of their XDev partnerships, or projects from developers in Asia, are mostly single player. And yeah, most of their single player games are timed nowadays, but that has essentially been the case since 2020 before the PS5 even launched. The only major shift left for Sony is to go Day and Date on PC for all software as many have predicted would already happen. 

Sure, Helldivers 2 didn't need PS5 to be considered a success, but the same can be said about PC. IIRC, Mat from NPD has said that HD2 would still be the biggest game of the year on just the PlayStation 5. I actually wouldn't be surprised if Helldivers 2 made more money on PS5 than PC even if PC has a slightly larger percentage of the player base. Point is, Sony's primary way of making money in gaming, will be through the PlayStation platform, supplemented by delayed PC ports. I also disagree with Sony never attempting to make their own storefront on PC. 

Also, didn't Phil Spencer testify that PlayStation made 2x the amount of profit than Xbox? Where exactly is the better return from? If anything, it goes to show looking at just the ROI is extremely misleading. Sony is simply not in the same position as Microsoft as their console is not irrelevant outside of the US and UK. Believe it or not that's a canyon wide gap between the two and how their business functions. Xbox being backed by a trillion dollar company is the reason they can even consider next generation hardware instead of being forced out the market like Sega. 

I do agree to some degree and I'm sure the same would be echoed with PlayStation/Xbox/other directions. But Shareholder, have lost confidence in the market, they have been burned by a a fake Covid effect and now they want to salvage there investment diverse elsewhere. The issue is that PS only as the leeway to operate as Sony see fit and Sony CEO and BoD main duty is to satisfy the shareholders. So if shareholders majority thinks investment in gaming should be reduce Sony have no choice then to act accordingly and as a result operational Budget of PlayStation will be reduced and new target will be set, after this, and depending on the severity of the reduction an aggressiveness of new target, there might be simply no way for PS to go forward without layoffs / closure.

Owner/shareholder goals, knowledge, vision isn't the same as video game enthusiasts including, I'm sure of it, many higher ups at PlayStation and other which have no choice than to act on the reduction while producing PR doc that state everything is fine. 

~1.3B profits out of ~15B revenue, 2023 was 2B profit out of 29.4B revenue which make 2016 having the better yield. Bungie was not on the book as 1.Sony made the acquisition not PlayStation and 2 that's not how acquisition are accounted for.

Never said it would not. I said PS3 was not and as a result PS4 2016 provided better yield than PS5 2023 despite PS5 being substantially still helped with ps4 and also factoring in better peripheral sales, stronger revenue from service, higher priced game and hardware, more digital sales proportion. Cost increase have just been that drastic.

And yet it isn't right now, despite PlayStation plus being bigger then in 2016

You didn't understood what I meant, of course if PS5 sales where to nosedive it would be a major concern because it will be a disaster for there revenue and revenue is what they care about. But if they had a way to circumvent revenue lost by PS5 sale nosediving then it would not be a worry therefore it's not PS5 sales nosediving that is a concern in itself but its impact on the revenue.

I was speaking in proportion while single player used to be 80%+ of PlayStation during ps4 now there short term release schedule looks like :

We agree here

I'm confident they won't or that if they do they won't pursue any form of exclusive strategy with it. Sony also own share of Epic and despite this they currently support Steam.

I'd need a source for precision and time frame but I wouldn't be surprise, this is profit not RoI and Sony revenue use to be much bigger than Xbox prior to ABK purchase. 

I assume it was taken from their prior financial statement

Quite the contrary, it shows that judging a business solely by it's size or in this case, number of console sold, can be extremely misleading, Sony had way higher revenue than Xbox and yet Xbox was able to provide an healthier business with more RoI.

You claim relevancy as a factor of position over competition because you use a consumer point of view, it doesn't matter that Sony PS5 is outselling Xbox as much as they are, it still not enough for them to provide a RoI able to keep investment flowing in while overlooking other options like increasing PC support, exactly as MS was force concluded almost a decade earlier due to their lower install base. 

This is backward, nobody would keep a business that have no yield or prospect and no MS isn't philanthropically supporting Xbox as your suggestion entail. The actual reasons that a trillion dollar company is backing Xbox is because Xbox manage to produce RoI. Still not enough to fully satisfy them because MS is also forcing contraction onto Xbox (so long for "backing"). 

I fully expect Nintendo Switch 2 to face the same problems the PS5 is facing. Nintendo also is weird when it comes to home consoles they either hit out of the park (Switch/Wii) or they hit themselves with the bat (GameCube and Wii U).

I expect the Switch successor to be what the 3DS is to the DS. A successful successor, but plagued by circumstances that won't let it shine as brightly. Nintendo is also a weird (imo better) company when it comes to how it finances it games and how it prices games.

However if all Nintendo games are going to be 70 euro and stay at that price point on Switch 2 that will definitely hinder the Switch 2 as it will most likely have more expensive hardware (raw costs for hardware have gone up). I fully expect a decline between 8th gen and 9th gen if we count the sales for the Switch from 2020 and the Switch 2 till PS5 releases and I don't see that trend going into reverse easily.

"Why don't they cut the price of the system"

"Why are they charging $70 a game?" 

lol

Say bye bye to large scale hardware price drops ... ever.

The 3DS was very cheap though for like 98% of its product cycle. Can't keep using the "but it launched at $250!" excuse when that was really only 4 months out of like a 7 year product cycle. 

Switch's problem I think will be more the no COVID surge, they were perfectly positioned to ride that wave last time, without it they will have to do things like Switch 2 Pro (an actual one) IMO to create boosts throughout the product cycle. 

my exact thoughts as well. more profit, and less new (innovative) games. not a good combo for gamers. this is why these days i've been going back and playing older games pretty exclusively instead of waiting for new ones. plenty of good stuff out there that exists separately from the current state of the gaming industry.