Sony’s head of games admitted that the Japanese group’s new console could be the last because it unveiled pricing of his PlayStation 5 in anticipation of a fight with its rival Microsoft over next-generation technology.
Sony will sell the PS5 for the same price of $ 499 as Microsoft’s upcoming Xbox Series X, stepping up the focus on the rivals’ exclusive gaming lines as they battle for dominance in a changing entertainment industry where millions of people remain homebound due to Covid-19.
While console makers have already struggled over hardware comparisons, analysts have said that competition between Sony and Microsoft’s new machines will be defined by their investments in in-house game production.
For Sony, more than Microsoft, the outcome of this fight will be critical. Its games division is its main revenue driver and its importance will increase as the global pandemic and tensions between the United States and China cast a shadow over other units, such as those that sell image sensors. used in Apple iPhones.
The company expects its gaming business to generate 30% of its revenue and nearly 40% of its operating profit for the fiscal year through March 2021.
The upcoming consoles from Sony and Microsoft represent the fourth time they have faced each other in this space, both devoting massive resources to capturing a critical segment of the global games market, estimated by Newzoo at around $ 45 billion.
But asked by the Financial Times if there would be a PlayStation 6, Jim Ryan, Managing Director of Sony Interactive Entertainment, said Wednesday: “The truth is, I don’t know and no one knows.”
“Seven years ago, everyone was saying, ‘The PS4 will be the last, everything will be tablets and cellphones’, and [more recently] it’s “everything will be in the cloud” so nobody knows, “he added.
Some analysts have predicted that it could be the last round of console wars as streaming games and digital downloads push content to different devices and technology evolves away from a large box placed under a television. One of the main launch titles for the PS5 – The devil can cry 5 – will only be available digitally.
“We think the PS5 will be the last console. The games will likely be played entirely online on PS6, ”said Kota Ezawa, analyst at Citigroup.
In 45 minutes online promotion Wednesday which featured new titles such as Spider-Man: Miles Morales and Resident Evil 9, Sony has revealed that it will launch two versions of its new PlayStation. The main edition – which includes a disc player – and a version that only plays games downloaded digitally for $ 399. Both go on sale on November 12 in Sony’s major markets, including the United States and Japan, and on November 19 in the rest of the world.
Sony’s long-awaited pricing announcement came a week after Microsoft disclosed that its Xbox Series X will retail for $ 499 while its less powerful and smaller Xbox Series S console will go on sale for $ 299 on November 10.
Minami Munakata, analyst at Goldman Sachs, said the discless version of the PS5 will support an industry acceleration toward digital-only game sales.
“I anticipate that digital sales will increase in the future due to the launch of this low-cost model,” Ms. Munakata said. She thinks the ratio of digital game sales to disc sales would likely drop from around 51% now to 80% in five years.
The timing of the launches prepares Sony and Microsoft for a year-end showdown amid Covid-19, which has forced profound behavioral changes in households around the world and boosted the games industry as people shifted are immersed in home entertainment.
The pandemic, along with long lockdowns in many countries, has dramatically accelerated a number of trends in gaming, analysts said, including the overlap between gaming, social media and other entertainment.
As travel and social restrictions crushed live performances, some artists have experimented with virtual gigs in games like Fortnite, drawing massive global audiences.
Still, analysts expect the looming Microsoft-Sony showdown to contain many elements of traditional console warfare, with a focus on games exclusive to each machine, as well as the range of titles available in the game. launch and during the critical festive season in December.
On Wednesday, Sony showcased a series of games generated by its own studios – production units that it either acquired or developed in-house in an attempt to gain an advantage over Microsoft. Its American rival has carried out a wave of studio acquisitions in recent years to strengthen its own range.
David Gibson, analyst at Astris Advisory in Tokyo, said Sony’s hardware pricing was in line with expectations and the lineup of launch titles from its in-house studios was solid. “Spiderman will easily beat Master Chief,” Mr. Gibson said, referring to Sony’s main launch odds against Microsoft’s flagship series, Halo.
In 2013, Sony offered a $ 100 reduction on its PS4 from Microsoft’s rival Xbox One, sparking one of its most successful launches with console sales now exceeding 112 million units.
But a lot has changed in recent years. Apart from their console rivalry, Sony and Microsoft have become important partners in cloud technology. The monetization of console games has also moved from a one-time purchase to a service model, where a single title can generate years of revenue from the purchase of added content.
Of the 113 million monthly active users on the PlayStation network, 45 million are paid subscribers to its Plus program and 2.2 million people stream games through its Now subscription on PC and PS4.
Citigroup’s Ezawa said Sony faces the challenge of seamlessly integrating its subscription services to compete with not only Microsoft, but also Amazon, Netflix and Apple.
“The PS5 will determine whether Sony becomes a major global player in the subscription industry. In this sense, the success of the PS5 will be even more critical for Sony than for the PS4 ”, he added.