Sony's latest financial report for PlayStation is a poster child for the mainstream video game industry's current problems.
PlayStation he has enormous strength and PS5 it is a console that is achieving excellent numbers. Its financial results for the third quarter of the current fiscal year showed that it is capable of producing revenues of more than 10 billion dollars, in a particularly prosperous period such as the Christmas period. Yet its enormous success is also the mirror of industry crisiswhere the division's operating profits turned out to be very low.
We are getting to, or have already gotten to, that point unsustainability of the video game industry that Shawn Layden spoke about a few years ago, the same one that he anticipated would be the main topic of 2024, with revenues no longer able to cover costs. PlayStation is solid, but a minimum margin (around 500 million dollars) like the one declared yesterday in its financial statement for the third quarter of the current fiscal year puts it in a delicate position: it only needs one subdued period to go into deficit. Growth is flat and the market it has addressed so far does not appear to be capable of being expanded.
Many players don't think about it and look at everything with heart-shaped eyes thinking only of the next game to play (legal, of course), but the markets have already reacted to the precariousness of the situation by causing the company's stock to drop on the stock exchange, so to send an unequivocal message to management: a change of course is needed. The shyness of recent years regarding certain policies no longer makes sense: PlayStation must also broaden its gaze. After all, Totoki, the current CEO of the company, said it clearly: the model of the exclusives that sold the consoles was fine, but it no longer works like it used to, so it needs to be changed. It is the legacy of a past, as glorious as we want, but which risks breaking the toy. Listening to the whining of fans risks sending the entire ship crashing into an iceberg, also due to the worsening estimates compared to PS5 sales for the next few months and years.
Uncertain future
In a few hours Microsoft could announce the arrival of some of its first party titles on other platforms such as Nintendo Switch and PS5. Many see it as a betrayal, no one knows exactly what, but market expansion is increasingly the only way forward to keep everything from collapsing, at least in the short and medium term. Publishers need to sell more games to survive, where hardware is actually becoming a big burden to manage, due to production costs very high.
Therefore, sooner or later PlayStation will also have to open up in this sense, unless there are major market upheavals. It will start by launching its titles immediately on PC too, so as to increase sales on the platform and not have to fragment marketing every time, spending more to get less. Who knows what some games in the future first party do not also arrive on other platforms. I can already hear the cries of those who consider it unlikely. After all, it was also unlikely that Xbox would do it or that PlayStation games would arrive on PC. Someone had tried to warn that this would be the path and to point out how Spencer was also opening up to Nintendo and Sony, but the reactions were not exactly positive, to put it mildly. Time is a gentleman, fortunately.
Yesterday's PlayStation balance sheets were classic reality bath, which we hope has made even the most intransigent people understand the difficulty of the current situation. This is unlikely to be the case, but hope…
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