With the wind at their back, Sony Interactive Entertainment CEO Jim Ryan and head of PlayStation Studios Hermen Hulst recently presented the state of the PlayStation 5 ecosystem to investors and hinted at what’s coming in the near future. Among other things, the company promised new IPs, more live-service games, and a big push behind cloud gaming.
While Sony’s big gaming showcase will offer specific details on new game announcements, release dates, and potential hardware refreshes, the investor presentation was a broader look at the current state of the PlayStation business and where it’s headed next. We got a pretty granular breakdown of some interesting sales data as well as cryptic teases of upcoming initiatives, like Sony’s rumored cloud gaming handheld, Q Lite [Update 5/25/2023 11:07 a.m. ET: the devices was revealed in the showcase and it’s wild looking]. Here are some of the biggest takeaways from the company’s latest business meeting.
PS VR2 is already outselling the first virtual reality headset
Sony’s new virtual reality headset is a comfortable but pricey bundle that requires users to already own a PS5, but initial sales numbers show it’s actually tracking ahead of the first PS VR headset. PS VR2 sold 600,000 units in its first six weeks, while the PS VR1 sold closer to 550,000. Whether that momentum will build the platform into something more than an expensive accessory for enthusiasts remains to be seen.
Analysts previously called for a price cut to fuel sales, and it’s unclear if big new games will arrive without a larger install base, especially as companies like Meta lay off VR developers amid cutbacks.
Sony plans to invest a ton in new franchises
Since the PS5 launched, fans have been waiting to see what new IPs would grow out of the latest console generation. So far it’s been mostly sequels to series that already existed or got their start on the PS4 like God of War, Horizon Zero Dawn, and Spider-Man. But Sony revealed that new franchises are planned. PlayStation Studios’ investment in new IP will hit 50 percent in 2025, compared to only 20 percent in 2019. However the lag in production means we might not end up seeing the results of that spending until late in the PS5’s life cycle.
Live-service games will be over half of that spending
Sony’s first-party single-player games have been setting the bar for story-driven blockbusters for years now, from The Last of Us to Ghost of Tsushima. It’s clear the company now wants to do the same for live-service multiplayer games as well, and will be leveraging its recent acquisition of Destiny 2 maker Bungie to achieve that.
The breakdown of total spending on content this year will be 55 percent on live-service business models vs 45 percent on “traditional” ones. The difference will be even more stark by 2025, when live-service spending will reach 60 percent of seemingly all production costs. It’s possible some of those games will still have a traditional single-player emphasis and just include cosmetic shops, like Ubisoft’s Assassin’s Creed Valhalla. Others are sure to be multiplayer-focused affairs more like Destiny 2.
PS5 owners spend a ton on microtransactions
Prestigious exclusives might help sell consoles, but it’s not what makes the most money once players are locked in. Sony revealed that PS5 players are spending over $100 more than PS4 players were at a similar point in the console cycle. That extra money isn’t coming from more games sold, however. It’s coming from spending on add-on content, meaning paid DLC and microtransactions.
Full game sales actually dropped by 10 percent on the PS5, while add-on content grew by 210 percent. Although Sony collects a 30 percent commission on all in-game purchases in Fortnite, Call of Duty: Modern Warfare II, and Apex Legends on the platform, it would stand to make a ton more if those purchases were made inside its own first-party exclusives.
Spider-Man sold great on PC while The Last of Us Part I is off to a slower start
2018’s Spider-Man didn’t arrive on PC until last year. In the eight months since it hit PC, the game sold an additional 1.5 million copies on the platform. The Last of Us Part I, meanwhile, has sold 368,000 copies since it arrived on Steam in March. That’s not bad considering it’s a remaster of a decade-old game many people have already played on PS3, PS4, and PS5. But it’s not exactly God of War numbers, which sold nearly a million copies in its first two and a half months on PC.
It’s not clear how much The Last of Us Part I’s rough performance and poor optimization at launch hurt its initial momentum, compared to the overall increase in sales of the game across all platforms following the success of the hit HBO adaptation. It seems like the port was in part a learning exercise for Naughty Dog, potentially as Sony eyes bringing the rest of its games to PC.
Half of all game releases won’t just be on PS5 by 2025
In the past Sony seemed afraid to cannibalize console sales by releasing its games on PC. Now it’s clear the company is ready to do just the opposite, porting its exclusives and investing in potential mobile spin-offs. The company plans for 50 percent of its releases in 2025 to be either PC or mobile games.
A lot of players are paying for the more expensive PlayStation Plus subscriptions
When Sony unveiled its overhauled PS Plus program, creating three separate tiers and folding its PlayStation Now streaming service into the priciest one, it seemed needlessly complicated. The highest tier, Premium, also didn’t seem worth the extra price in exchange for a slim selection of PlayStation Classics and cloud gaming features that are still a work-in-progress.
It turns out a lot of people were willing to upgrade, however. Sony says 14.1 million subscribers joined the higher tiers in the first 10 months, which now represent 30 percent of all PS Plus users. And Premium actually accounts for the majority of those with 17 percent of total subscribers, while the middle-tier, Extra, only has 13 percent.
The first PlayStation mobile game will arrive as early as 2023
Sony said it’s currently “partnered with established teams on games,” and “bringing some of our most celebrated IP to mobile,” with the first set to release in fiscal year 2023. The company acquired mobile maker Savage Game Studios last August and Bungie has also long been rumored to be working on a mobile version of Destiny 2. According to Sony’s charts, the mobile gaming market is already bigger than console and PC gaming combined, and it only projects that gap to widen in the coming years.
Sony’s doubling-down on cloud gaming
In the most cryptic part of the presentation, CEO Jim Ryan said the company has “some fairly interesting and quite aggressive plans to accelerate our initiatives in the space of the cloud.” He didn’t elaborate on what those are, but made the comment in the context of mobile gaming and portability. It certainly raises eyebrows since Sony has also now revealed a cloud gaming handheld codenamed Project Q that would be a remote play accessory for the PS5.
PS Plus also doesn’t currently support cloud gaming on smartphones either, requiring you to use a PS4, PS5, or PC. We do know that Sony has been developing a number of patents to decrease latency while streaming games, and The Verge previously reported that the company is hiring for a number of roles to build out its cloud gaming infrastructure. Cloud gaming has been at the center of the regulatory fight over Microsoft buying Activision Blizzard, and it seems like whatever the outcome of that proposed merger, Sony wants to take back some of the video game streaming market share it previously ceded to Game Pass and xCloud.