How is PlayStation transforming to face the future?

In the world of video games, investments and acquisitions are something we are used to… But we quickly noticed that the portfolio is not the same according to the manufacturers. In this context, where investment is a risk that must be taken in order to remain competitive, Sony has decided to strengthen the knowledge of PlayStation through the acquisition of studios, but also by strengthening its position in the entertainment industry in general. Opposite, competition from Microsoft is getting stronger. The American giant no longer hesitates to spend tens of billions of dollars to secure 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.

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  • Comprehensive investments
  • Facing the challenges of tomorrow
  • fierce competition
  • Sony’s transformation
  • stop the loss of confidence

The following text is a transcript of the previous video.

Comprehensive 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 guideline, his short and medium term goal. We remind you that the PlayStation segment is very important for Sony, since the turnover generated by the gaming brand represents almost 30% of what the company as a whole generates in the latest published quarterly results. Therefore, it is normal to see the Japanese giant buy development studios, because without them, it has no games and therefore no money. Since 2019, there has been an acceleration of acquisitions at Sony. With Insomniac Games, Housemarque, Bluepoint Games, Valkyrie Entertainment, Nixxes Software, Bungie and Jade Raymond’s studio Haven, that’s 7 new studios acquired in just three years. Before that, the last studio acquired was Sucker Punch, the developers ofinfamous Y Ghost 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 Fortnite and the makers of the ultra-popular Unreal Engine game engine. Finally, it’s worth remembering that Sony bought Crunchyroll, the Japanese anime giant, as well as EVO, the world famous fighting game tournament. Finally, the Japanese company is accelerating the adaptation of its video game works to both the small and the big screen thanks to its Sony Pictures antennas, to transform its game licenses into cross-media licenses.

But what does all this spending mean that covers a broad spectrum and is directed at entertainment in the broadest sense?

How is PlayStation transforming to face the future?

Facing the challenges of tomorrow

The answer is simple. Sony places its balls waiting for tomorrow’s clashes. And these confrontations will be numerous, as well as intense. It is important to remember that currently the megagroups, which we call GAFAM, only have one word on their lips: the Metaverse, that is, a large virtual world where all the services of all the brands on the planet will be showcased. And the street here is virtual, of course… To go in this direction, let’s remember that at the beginning of 2022, Sony signed an amazing partnership with the famous club Manchester City. The goal? Create an online space where fans can interact with the team within a “metaverse” representing the Etihad football stadium. Thus, Sony attacks different strata of the entertainment world while consolidating its dominance over video games, which is quite logical for a group that has a “music” segment and a “images” segment dedicated to movies and series. Perhaps you see in Fortnite the Metaverse of tomorrow already available today? Maybe… And so it’s wise for Sony to spend a few bucks on it. You should also remember that a few years ago, Sony opted for new media to sell its consoles: CD with the PS1, DVD with the PS2 or even Blu-Ray with the PS3.

But in a world where the dematerialized is becoming increasingly important, you have to know how to question yourself and go where the trend is. And the latter is clearly in services. More specifically, she is subscription catalog services, such as GamePass, inspired by the boom of Netflix, Deezer, Spotify and company. This notably explains why Sony recently revised and corrected its PlayStation Plus offering. The other trend is service games, those titles that receive regular updates to keep players as long as possible and monetize their game time, this is Bungie’s specialty, which, as you know, was bought by Sony for its expertise in the countryside. As for the acquisition of Nixxes Software, the box specialized in PC ports, it is proof that, like Microsoft, the Japanese giant has no intention of abandoning computers. Of course, PCs are built into far more homes than game consoles.

How is PlayStation transforming to face the future?

The game service, the catalog services, the importance of the PC in the equation… finally, isn’t Microsoft catching Sony by taking it to its pet turf?


fierce competition

It’s hard to say with confidence that Sony is accelerating its investment in response to what Microsoft is doing. However, it is necessarily interesting to note that the company’s buying spree began the year after the announcement of the acquisition of four Xbox studios: Ninja Theory, Playground Games, Undead Labs, Compulsion Games, not to mention the founding of a new studio. , The Initiative, from Microsoft. The Redmond firm showed a more offensive face at the end of Xbox One’s life, creating an Xbox One X more powerful than the PlayStation 4 Pro, and making the Gamepass offer more than attractive. And then, how not to mention the last two acquisitions of the company headed by Satya Nadella? In September 2020, one day before making Xbox Series reservations official, 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 shocked to learn of the planned acquisition of Activision-Blizzard, the group behind Call of Duty, world of warcraft either crash bandicoot.

This time, the American company seems to be taking video games very seriously, which is not necessarily good news for its competitors. Since then, as an immediate consequence, It is not uncommon to see in the United States or England that Xbox Series is sold better than PlayStation 5, consoles that are nevertheless experiencing supply problems, remember, except perhaps the Series S. This sales observation tends to show that Microsoft’s strategy was correct. Recently, a YouGov survey showed that one in two PlayStation gamers would be willing to subscribe to Game Pass if Activision games made it to the catalogue. In this war of attrition, Microsoft now has all the weapons. It has the infrastructure, the services, the hardware and the studios. After an excellent year 2021 where the American won the editor of the year award from Metacritic, there is a bit of a smell of revenge for the Redmond firm.

How is PlayStation transforming to face the future?

Therefore, the competition is fierce in the world of video games, and Sony must face an adversary that is much more reactive than during the first years of life of Xbox One. Therefore, the goal for the creator of PlayStation is clear: transform without leaving the fans on the sidelines.


Sony’s transformation

Since the Activision-Blizzard bid proposal by Microsoft, what analysts point to is obviously the issue of exclusivity for all these licenses, but above all Sony’s immobility in the face of what is happening. Sony for a long time ignored Game Pass until it recently proposed the PlayStation Plus redesign… without integrating a formula that includes first party titles on the first day. While Microsoft tried to reach as many people as possible on PC, mobile and Xbox consoles, the Japanese firm decided to increase the prices of its first party productions. The message could read like this: play on PlayStation, you win. Except now analysts believe the leader should follow the path laid out by Phil Spencer. I quote: “Investors fear that Sony may not be able to continue to win if the industry moves away from the hardware-based model,” said Kazunori Ito of Morningstar Research. Therefore, Sony’s mission is to continue to create amazing solo games, its trademark, but also to definitely catch up with the service games that the Japanese group has sidelined for too long. The acquisition of Haven goes in that direction, as the studio said it is working on a “systemic and scalable AAA that will entertain and engage gamers for years to come.” And if the battle ultimately evolves towards streaming services that allow titles to be played on smartphones and other connected TVs, Sony will need to show that it is capable of overcoming the technological and political challenges associated with this evolution.

To think that these developments are just a detail would be to misunderstand the expectations of the market. Because on the investor side, we realize that Sony may not be the so-called unbeatable juggernaut. Some even believe that the Japanese group could live through the crisis.

How is PlayStation transforming to face the future?

stop the loss of confidence

As Microsoft has said in the past, its competitors are no longer Sony or Nintendo, but Google and Amazon. And by dint of repeating itself, this message has been heard by investors. Financially speaking, the Redmond firm is in Olympic shape. On Sony’s side, the stock has simply failed to regain the level it was at before Microsoft’s announcement of its proposed takeover of Activision-Blizzard. However, we must moderate our statements by admitting that the financial markets are particularly choppy 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 to fight. And one of them is the takeover of publishers. So can Jim Ryan and his crew buy a Square-Enix, a Capcom, or even a Konami?

In theory, Sony has the option of going into debt in an attempt to own a Japanese publisher. Nevertheless, Paul Tassi, a journalist for Forbes, explained that PlayStation simply could not reply. “Microsoft is building something absolutely huge,” he said before adding that “at some point it looks like Sony could be overshadowed if it doesn’t find a way to move in the same direction.” ”’A lead taken by Microsoft deemed “insurmountable” by the mercurial Michael Pachter, an analyst well known to video game enthusiasts. He came to announce the death of the PlayStation brand in the next 10 years following the strategy put in place by Phil Spencer. A statement that generated debates more exciting than exciting, as you can imagine. For our part, we are a little more optimistic, and we think that Sony has many cards in hand to continue offering content that encourages players to buy their consoles to enjoy it.

How is PlayStation transforming to face the future?

In this equation, EVO cards, Crunchyroll, Sony Pictures or even Sony Music have yet to be played by PlayStation. Therefore, the battle is far from over.

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