Sony: Console Cycle Has Changed Due to In-Game Sales

November 2, 2017Written by Anthony Nash

ps5 console

This week, Sony Cooperation’s quarterly financial conference for investors and analysts took place, and while there had been some rumblings about Sony discussing a shift in business models, we didn’t have any concrete quotes to focus on. That changed, however, when a user on the ResetEra forum page took to translating the call.

Speaking to the investors, Sony Chief Financial Officer Kenichiro Yoshida discussed how the business model in gaming has shifted and how in-game sales have mitigated the console cycle. “There are mitigating factors that affect the console cycle so far. For one thing, the business model used to be B2B royalty model, but now it has shifted to a direct-to-consumer model. “ said Yoshida (transcription via ResetEra user “Deeke77”).

Yoshida also discussed how the business of video games seems to be shifting from main access to hardware to how many users on average a company can get. “And in our business, main access to hardware is important, but rather than hardware, the number of users is getting more important–monthly average users, numbers of PS Plus subscribers, etc. And also how much time are they putting into this console–the ARPU? So the axis seems to be shifting from hardware to userbase.”

What Yoshida is saying isn’t too shocking, as we’ve seen across the industry most companies trying to collect the most amount of users it can. We’ve even seen this in the discussion of single-player games, as it seems like the focus on a game has shifted from how it’s received to how long a company can keep people playing for. According to Yoshida, these factors have mitigated the console cycle, offsetting the need to create new consoles in order to collect revenue. If the trend continues in that way, who knows how long it will be until we see the next generation of consoles.

[Source: ResetEra]