In 2021, GamesIndustry.biz spoke with former PlayStation CEO Jim Ryan about his hopes for the company’s future. And he gave this answer:
“I would like to see a world where the games we make on PlayStation can be enjoyed by many tens of millions of people. Maybe hundreds of millions. Right now the success with the current console model, a really big hit of PlayStation… you” we’re talking about 10 or 20 million people being able to play that game.
“We’re talking about games that stack up against music, we’re talking about games that stack up against movies. Music and movies, they can be enjoyed by almost limitless audiences. And I think some of the art that our studios are doing is some of the fun the best that has been made anywhere in the world and to get the audience for that to 20 or 30 million, I would love to see a world where hundreds of millions of people can enjoy those games.
There’s a problem with this vision, which Ryan acknowledges when he mentions ‘the current console model’. The audience for game consoles hasn’t grown this much in decades. For the PlayStation in particular, it never went much beyond 150m. In a GI.biz panel held on IGN Live last week, former president of PlayStation Worldwide Studios Shawn Layden said that the gaming market is “still in the overall 250-foot installation base of active consoles, and that’s a challenge “.
The console gaming market has done a good job of making more money through things like digital distribution and subscription services. But overall, Xbox, PlayStation and Nintendo just got the same number of players to spend more.
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PlayStation wants to make its games more popular. It wants to turn its franchises into true entertainment powerhouses. But more than that, it should do it. His games are often on the cutting edge of what’s possible, and that takes time and costs money. Development costs have tripled (in some cases) over the past five years. And if Sony wants to keep its games at the top level, they need to make them more successful.
I’m picking PlayStation because they’ve just announced that Lego Horizon Adventures is coming to the Nintendo Switch. A PlayStation-owned IP releasing on a rival console is unheard of. You have to turn the clock back to 1998 and Wipeout 64 to find another one. But of course, this isn’t just a PlayStation thing. Almost every company in the gaming industry is trying to push their biggest franchises into new areas to try and find new fans, and I’m not just talking about games. We’ve seen AAA Assassin’s Creed and Resident Evil games on the iPhone, Mario on the big screen, Halo on the small screen, Sonic on Roblox, Final Fantasy coming to more consoles… they’re all in this.
The situation feels more important with the platform holders because there is a contradiction at the heart of placing their franchises on different gaming platforms. Xbox, PlayStation and
Nintendo effectively has two parts to their business: the platform and the IP. The platform business is everything from hardware sales, accessory sales, subscriptions and store sales. These companies get a huge cut of the revenue (30 percent in most cases) for every third-party game sold on their platform, so the platform business is an extremely profitable and important part of their income. . There’s a reason Sony balked at the idea of Xbox owning Call of Duty, and it wasn’t simply about the impact on its console sales. He made money from every game sold.
Meanwhile, the IP business is what we’re talking about, which includes game sales, merchandise, TV and movie expansions, and so on. The easiest way to find new players for these games is to go and look for them and not wait for them to come to you. In other words, if Microsoft thinks PC gamers might like a particular console franchise, it’s better to release it on Steam than wait for them to buy an Xbox.
But for console manufacturers, this is the main challenge. If they aggressively pursue players on other platforms by releasing their games on them, it risks weakening its platform business.
Looking at platform holders from the other side, Xbox probably has the least to lose by going multiplatform considering the relatively small size of its platform business. Its main focus has been expanding its franchises to PC and mobile. It’s currently building a mobile game store and has launched all of its first-party titles on PC the day they hit consoles for the better part of a decade. It is also expanding its franchise through TV and film.
But considering the install base of PlayStation and Nintendo, it’s clear that there is a good audience to reach through these consoles as well. And the firm has strategically released select titles on PS5 and Switch.
Nintendo has shown no interest in placing its brands on its direct rivals. And it’s in a slightly stronger position as its console platform has actually grown quite a bit from one generation to the next. However, it is aggressively pushing its brands outside of the Switch, first with smartphones and now through movies and theme parks. Things like Super Mario Run and the Mario Bros movie are his ways of finding new fans and it’s working. Mobile games have attracted hundreds of millions of players (although they haven’t been as profitable as expected), while the Mario movie was one of the biggest animated movies of all time, and its release even boosted sales of Switch devices.
Back to PlayStation, and the company has targeted the PC as a place to release its games. It has even acquired a PC port specialist (Nixxes) to offer its franchises on Steam. However, with a much larger audience of PlayStation owners, it has more to lose than Xbox, and so (outside of direct service efforts like Helldivers 2) has mostly waited one to two years before porting a game. PlayStation on PC. The hope is that not only will it reach more players this way, but it could create new fans of PlayStation games who will then purchase a PS5 console in the future.
“We are finding a new audience [via PC] who will potentially be very interested in playing, for example, sequels on PlayStation platforms,” PlayStation co-CEO Hermen Hulst said in a business update last month.
Meanwhile, like Nintendo, the firm has invested heavily in TV and film expansion, including last year’s The Last of Us TV movie and Gran Turismo. It is also making early moves into creating mobile games as well.
For many companies, mobile is the biggest opportunity. We’re seeing an increasing number of AAA games coming to Apple’s latest phones, like Assassin’s Creed Mirage and the remake of Resident Evil 4. This platform might not seem like the ideal place to experience these games, but it it is worth remembering the console business is not really a global business. There are many major gaming markets, including China and India, where the console install base is very small and most games – even among heavy gamers – are being played on mobile devices. The challenge, as is often the case with mobile, is how this audience pays for their games. It’s a free-to-play market, which usually doesn’t lend itself well to premium AAA console games.
Releasing games on mobile and PC carries less risk for console manufacturers than putting their games on other consoles. And considering the relatively small size of the console business, it’s understandable that they’d focus more on areas like smartphones. However, depending on the game, there will be times when releasing titles on rival platforms can make strategic sense.
“People aren’t going to turn their backs on the PS5 because of a Lego retelling of a 2017 game coming to another platform.”
The news that Lego Horizon Adventures is coming to Switch may have come as a surprise, but there’s a lot of logic to it. Guerrilla has been proactive in trying to build the Horizon brand, with comics, toys, a board game and even an upcoming TV show. The Lego game is part of this strategy. It’s a game aimed at a younger audience than the main Horizon series, and if you’re actively after younger players, what better platform than the Switch, where Lego games typically sell extremely well?
Sony will have appreciated this move and will consider it largely additional. People aren’t going to turn their backs on the PS5 because of a Lego retelling of a 2017 game coming to another platform. The risk is low. The Switch represents an untapped audience for Horizon, which, in turn, could come the other way: ‘Do you like the Lego Horizon game? Well, why not try one of the top games on PlayStation?’.
In contrast, an Xbox version of the game is not as attractive. Xbox’s audience is much smaller than Nintendo’s and not as family oriented (there are also a plethora of Lego games available on Game Pass).
Xbox has been more open to releasing games on PlayStation and Nintendo, which makes sense considering the size of its console business versus the rest. But she is also selective and strategic with the games she chooses. Take Sea of Thieves and Grounded, which are live-service games that benefit greatly from more players. Or Hi-Fi Rush, which is a game that could potentially do well in Japan, so it should really be released on platforms that Japanese gamers actually own. Or the Ori games, which are in a genre – Metroidvania – that is extremely popular on Nintendo.
In the future, we should expect to see more games pop up in surprising places. And there’s likely to be some tension behind the scenes over what’s right for each game. It is somewhat clear that PlayStation has appointed two CEOs this time, one to lead the platform business and one to charge the games. And there’s a potential challenge to that relationship, because what’s best for God of War or Uncharted may not always be what’s best for PlayStation 5.
Consoles aren’t about to disappear, and neither are exclusives, not completely. But as gaming becomes more and more mainstream, with an ever-increasing number of multi-billion dollar franchises, the need to make these properties as widely available as possible will only grow.