Playstation turns 30 and provokes the console market

Questa fotografia mostra i giochi per PlayStation 1 Grand Theft Auto (GTA), Tomb Raider e Metal Gear Solid su uno scaffale, a Vraiville, nel nord della Francia, il 20 novembre 2024. Sony celebra il 30° anniversario del lancio della prima Playstation il 3 dicembre 2024. (Photo by LOU BENOIST / AFP)

It was a commercial success that prompted Sony engineers to introduce virtual reality (PlayStation VR) without much success. In 2023 Playstation tries again with VR, the second version of its helmet is released but the numbers are in line with the success of the metaverse. It is not Ps's only misstep. Neither is it going well on the portable console front, despite attempts by the PlayStation Portable (PSP, 2004) and PlayStation Vita (2011). Yet, the Playstation brand is becoming stronger and stronger. Over time, it distinguishes itself as the platform to find single player narrative games of the highest quality.

Questa illustrazione fotografica mostra una PlayStation 5 (L) e una 5 Pro (C) di Sony in esposizione presso la sede centrale di Sony nel centro di Tokyo il 27 novembre 2024. Il 3 dicembre 1994, la PlayStation è stata rilasciata in Giappone, prima incursione di Sony nel mercato dei videogiochi allora dominato da Sega e Nintendo. Un successo planetario, soprattutto presso un pubblico più adulto, che ha proiettato il produttore giapponese al rango di attore principale del settore. (Photo by Richard A. Brooks / AFP)

 In 2020, finally, the PlayStation 5 arrived and, thanks to Covid and the chip shortage, immediately became a phenomenon to be studied in economics classrooms. The console sold out for months. Many technical innovations were introduced, ranging from the use of SSD hard-disks for fast loading to ray tracing for realistic visual effects to the DualSense Controller with haptic feedback but no wow effect as in the days of Playstation 2.

How has the Playstation 'head' changed?

Meanwhile, Microsoft acquired the Activision-Blizzard publisher for almost 70 billion dollars, Nintendo with Nintendo Switch archived the record of the longest-lived (and possibly profitable) console ever. New gamers play a lot on smartphones and free-to-play games like Fortnite. Once again, the fundamentals of this market seem more mobile than ever. Following the departure of CEO Jim Ryan in March this year, Sony's gaming division is being handed over to two CEOs who, while collaborating with each other, will manage two different entities. Hermen Hulst, former head of Guerrilla Games and current head of PlayStation Studios, took the reins of the Studio Business Group division. Hideaki Nishino, senior vice president of Sony Platform Experience Group, will instead sit in the chair of CEO of the Platform Business Group division. So the former will be in charge of video games and development studios and the latter of technologies and designing new revenue sources..

The challenges of new management.

The rise in development costs for high-budget, so-called triple-A titles and the changing tastes of the new generations has squeezed the margins of an industry that grew a lot during the lockdown and has now, for the past couple of years, been going through a long consolidation phase characterised by low margins, layoffs (and studio closures) and the temptation to use all the generative artificial intelligence at its disposal to reduce production costs.

PS5 sales at the end of the fiscal year were 18 million, slightly less than the 21 million expected by analysts. With 97 million monthly active players on PS, Sony dominates the console market, but it is not growing, it is slowing down and is worth 30% of the total gaming business. As analysts predicted, the deck for home consoles is getting a little shorter. To date, half of these still play on PlayStation 4, the previous gaming machine. The PC seems to be back in fashion, the idea of the 'fluid' video game ready to conquer every screen, from the home TV to the smartphone, becomes more solid. Despite this scenario, Sony gives the impression of going its own way. In fact, it provokes the market by demonstrating to all and sundry that consoles have not gone out of fashion. And at the beginning of the month, the Playstation 5 Pro, a more powerful version of the Ps5 at a price that leaves everyone stunned, is launched on the market.

Sony's super-console costs 799.99 euro, practically twice as much as the Ps5 Slim. A gaming machine sells for between three and 400 euros, only the newest steam machines that are portable PCs like the Asus Rog Ally reach those figures. Sony is optimistic and the analysts too. But this time it is not just Sony's shareholders who are waiting for the sales figures, but the entire console industry. In March, it will probably be time for rival Nintendo, which could launch Nintendo Switch 2. Microsoft, which, as mentioned above, owns Xbox after the Activision-Blizzard acquisition, has become the world's largest video game publisher and it is not clear what kind of game it intends to play on hardware. For gamers, however, an era seems to be over, that of 'exclusives' for example, where buying a specific console was the only way to play a particular video game. This rule still applies to Nintendo, which is careful not to cede SuperMario, Zelda and all the other blockbusters to the competition. Hence the interest in the fate of this very expensive gaming machine that is likely to compete not so much with consoles but with PCs in the future. Despite PS5's success, therefore, something has changed in the market and among gamers. And it is the real boss to take down.