How is PlayStation changing for the future?

In the world of video games, investments and purchases are something we are used to… But we quickly realize that according to the manufacturer, the wallet is not the same. In this context, where investments are a risk to remain competitive, Sony has decided to strengthen PlayStation’s know-how by acquiring studios, but also by strengthening its position in the entertainment industry in general. Conversely, the competition from Microsoft is getting stronger. The American giant no longer hesitates to spend tens of billions of dollars to acquire not developers but publishers with Bethesda and Activision-Blizzard. Financially, PlayStation is no match for Xbox, but as you’ll see, Sony has more than one trick up its sleeve.

summary

  • All-round investments
  • Face the challenges of tomorrow
  • tough competition
  • The transformation of Sony
  • mitigate loss of trust

The following text is a transcript of the above video

All-round investments

So specifically, what has Sony bought lately? Jim Ryan, the big boss of Sony Interactive Entertainment, warned in July 2019 that content would be more important than ever in the industry. That was his guiding principle, his short and medium-term goal. We remind you that the PlayStation segment is very important for Sony, since the gaming brand’s revenue accounts for almost 30% of what the entire company generates in the latest published quarterly results. It is therefore normal for the Japanese giant to buy up development studios, because without them it has no games and therefore no money. Sony has been accelerating acquisitions since 2019. With Insomniac Games, Housemarque, Bluepoint Games, Valkyrie Entertainment, Nixxes Software, Bungie and Haven, Jade Raymond’s studio, that’s 7 new studios acquired in just three years. The last studio acquired before that was Sucker Punch, the developers ofinFamous and from Spirit of Tsushima in 2011. And then, in just under two years, the Japanese giant also invested almost 1.5 billion in Epic Games, the parents of Fourteen days and the creators of the hugely popular game engine Unreal Engine. Finally, remember that Sony has acquired Crunchyroll, the juggernaut of Japanese anime, as well as EVO, the world-famous fighting game tournament. Finally, thanks to its Sony Pictures antennas, the Japanese company is accelerating the adaptation of its video game works both on the small and the big screen to transform its gaming licenses into cross-media licenses.

But what does all this broad-spectrum, entertainment-focused spending mean?


Face the challenges of tomorrow

The answer is simple. Sony is laying its eggs while awaiting tomorrow’s confrontations. And these confrontations will be numerous and intense. It’s important to remember that the mega-corporations we call GAFAM currently have only one word on their lips: the Metaverse, namely a large virtual world where all the services of every brand on the planet will have a showcase. And the street here is virtual, of course… To go in that direction, let’s remember that in early 2022, Sony signed an amazing partnership with the famous Manchester City club. The goal? Create an online space where fans can interact with the team within a “metaverse.” as a representative of Etihad football stadium. Sony is thus attacking different layers of the entertainment world while also consolidating its hold on video games, which is pretty logical for a group that has a “music” segment and a “pictures” segment for movies and series. Maybe he sees tomorrow’s Metaverse in Fortnite, available today? Maybe… And so it’s wise for Sony to put a few balls into it. One should also consider that a few years ago Sony bet on new media to sell its consoles: CDs for the PS1, DVDs for the PS2 or even Blu-Ray for the PS3.

But in a world where the dematerialized is increasingly important, you have to know how to question yourself and go where the trend is. And the latter is clearly due to the services. In fact, she is Subscription catalog services such as GamePass, inspired by the boom of Netflix, Deezer, Spotify and Co. This explains in particular why Sony recently reviewed and corrected its PlayStation Plus offer. The other trend is service games, which are titles that are regularly updated to keep players as long as possible and to monetize their playing time. This is Bungie’s specialty, which, as you know, was bought out by Sony for its expertise in the field. The acquisition of Nixxes Software, the box specializing in PC ports, proves that like Microsoft, the Japanese giant has no intention of dropping computers. Of course, PCs are integrated into many more households than game consoles.

How is PlayStation changing for the future?

The gaming service, the catalog services, the importance of the PC in the equation… after all, isn’t Microsoft trapping Sony in taking it to its favorite territory?


tough competition

It’s hard to say with confidence that Sony is stepping up a gear on the investment side in response to what Microsoft is doing. Still, it’s absolutely interesting to note that the company’s buying frenzy began the year after the announcement of the acquisition of four studios from Xbox: Ninja Theory, Playground Games, Undead Labs, Compulsion Games, not to mention the creation of a new studio. Microsoft’s initiative. The Redmond-based company showed a more aggressive face at the end of the Xbox One’s life, creating an Xbox One X that is more powerful than the PlayStation 4 Pro and making the Gamepass offer more than attractive. And then, how not to mention the company’s recent two acquisitions led by Satya Nadella? In September 2020, a day before the official pre-order of the Xbox series, Microsoft announced the acquisition of Bethesda, the publisher to which we owe Elder Scrolls and Doom, two licenses that work very well in the United States and in Europe. Then, in January 2022, we were surprised to learn of the proposed acquisition of Activision-Blizzard, the group behind Call of Duty, World of Warcraft or Crash Bandicoot.

This time around, the American company seems to be taking video games really seriously, which isn’t necessarily good news for its competitors. Since then as a direct result It’s not uncommon for the Xbox series to outsell the PlayStation 5 in the US or UK, consoles, however, all have delivery problems, recall, except perhaps the Series S. This observation of sales tends to prove that Microsoft’s strategy was right. A recent YouGov poll showed that one in two PlayStation players would be willing to subscribe to Game Pass if Activision games made it into the catalog. In this war of attrition, Microsoft now has all the weapons. It has the infrastructure, the services, the hardware and the studios. After a stellar 2021, in which the American was named Metacritic’s Editor of the Year, it smells a little like revenge for the Redmond-based company.

How is PlayStation changing for the future?

The competition in the world of video games is therefore fierce and Sony has to face an opponent much more reactive than in the early days of Xbox One. The goal for the creator of the PlayStation is therefore clear: to change without leaving the fans on the sidelines.


The transformation of Sony

What has been highlighted by analysts since Microsoft’s planned acquisition of Activision-Blizzard is obviously the question of exclusivity for all these licenses, but above all Sony’s immobility in the face of what is going on. . Sony ignored Game Pass for a long time, until recently proposing the redesign of the PlayStation Plus… without incorporating a formula with first-party titles on day one. While Microsoft tried to reach as many people as possible on PCs, mobile phones and Xbox consoles, the Japanese company decided to increase the prices of its first-party productions. The message could be something like this: Play on PlayStation, it’s earned. Except that analysts now believe the leader must follow the path opened up by Phil Spencer. I quote, “Investors worry that if the industry moves away from the hardware-based model, Sony won’t be able to keep going,” said Kazunori Ito of Morningstar Research. Sony’s mission is therefore to continue making incredible solo games, definitely catching up on its trademark but also service games that have been shelved by the Japanese group for too long. The Haven acquisition goes in that direction, with the studio saying it’s working on a “systemic, scalable AAA that will entertain and delight gamers for years to come.” And if the battle definitely moves towards streaming services that allow titles to be played on smartphones and other connected TVs, Sony will have to prove that it is able to meet the technological and political challenges associated with this development.

To think these developments are just a detail would misunderstand market expectations. Because on the investor side, it is clear to us that Sony may not be the so-called unbeatable colossus. Some even believe that the Japanese group could experience the crisis.

How is PlayStation changing for the future?

mitigate loss of trust

As Microsoft has said in the past, its competitors are no longer Sony or Nintendo, but Google and Amazon. And through repetition, that message was heard by investors. Financially, the Redmond company is in Olympic form. On the Sony side, action just hasn’t returned to the level it was before Microsoft announced its proposed acquisition of Activision-Blizzard. However, we have to temper our statements by admitting that the financial markets are particularly unsettled at the moment. This future of video games that Microsoft is preparing inevitably pushes the opposing forces to reevaluate the directions that can be taken for the fight. And one of them is acquiring publishers. So, can Jim Ryan and his teams buy a Square-Enix, a Capcom, or even a Konami?

In theory, Sony has the option of going into debt to try and own a Japanese publisher. Nevertheless, Paul Tassi, a journalist at Forbes, explained that PlayStation just couldn’t replicate. “Microsoft is building something absolutely huge,” he said, before adding, “Eventually it looks like Sony may be eclipsed if it doesn’t find a way to move in the same direction.” ”’A Microsoft lead that the talkative Michael Pachter, an analyst well-known among video game enthusiasts, considers “unsurpassable”. He went so far as to announce the demise of the PlayStation brand over the next 10 years following the strategy pioneered by Phil Spencer. A statement that sparked more passionate than exciting debates, you can imagine. On our side, we’re a little more optimistic and think Sony has a lot of cards in hand to continue offering content that will encourage gamers to buy their consoles to enjoy them.

How is PlayStation changing for the future?

In this equation, the EVO, Crunchyroll, Sony Pictures or even Sony Music cards have not yet been played by PlayStation. So the fight is far from over.

Leave a Comment