PlayStation’s days of relying on exclusive single-player titles to drive console sales are coming to a close. Exclusive IPs will still be the centerpiece of its strategy, but PC, mobile, and even Hollywood are now fair game. Or, in PlayStation’s words: “A transformation from PlayStation’s current console-centric approach to a future where large elements of our community extend beyond the console.”
 
RIP Console Exclusivity (& the PS4)
Sony is forecasting that PC and Mobile will account for half of first-party releases in FY 2025.  That's remarkable growth given that console (PS4) accounted for over 90% in FY 2019.

• Mobile is expected to be the fastest growing segment
  • Sony has a massive catalog of legacy IPs & older titles available for porting
• PS4 release will be phased out by FY 2025
  • 12 years of games would be an impressive run
  • Expect the PS5 to have an even longer life cycle

 
The Hollywood Dream
Sony has at least three new crossover shows on tap: Horizon for Netflix, God of War for Amazon, and Gran Turismo for TV.

• These shows join Last of Us (HBO) & Twisted Metal (Peacock)

In 2022, PlayStation’s leveraging of, at worst, the second most valuable library of IP after Nintendo, makes perfect sense. These are shows with built in audiences that could appeal to non-gamers and entice them into playing PlayStation titles. These releases are no doubt also prime opportunities for tie-ins, such as, say, a relatively cheap mobile live-service title using microtransactions. Unfortunately, the media streaming bubble has deflated some, and Netflix and other services may not be as eager to spend huge sums of money.
 
Bringing VR to the People
Sony’s second crack at virtual reality may be delayed to 2023, but it’s planning to hit the ground running. PlayStation is promising “20+ major first-party and third-party titles” at launch. The first PS VR was well received, and PS VR2 seems to be doubling down on accessibility for a gaming segment that traditionally has high barriers to entry. 

The Future

• Live Services: First-party live service franchises are expected to quadruple from 3 in FY22 to 12 in FY25
  • Sony President Jim Ryan teased that PlayStation has two unannounced live service games arriving by March 2023
  • Not a Bungie release
• New Blood: PlayStation is planning to invest 50% of development money in new IPs
  • 77% currently goes to existing IPs
  • Sony, to no one’s surprise, also confirmed its “not at all finished” acquiring studios
• Supply: Sony is expecting the PS5 to overtake PS4 sales at that stage of the consoles’ lives in 2023
  • PS5 outsold PS4 in Year 1 (2020)
  • PS5 undersold PS4 in Years 2 & 3 (2021 & 2022)
• Monetization: Love ‘em or hate ‘em, add-on sales have been massive for the PS5
  • Average Add-on Revenue is up 247%
  • Average Full Game Spend is down 21%
• China: PlayStation dedicated an entire slide to singing the praises of the Chinese market
  • 6th in Active Console Volume Ranking as of March 2022
  • $69.81 average cumulative spend
  • 89.9K subscribers
• Cutting Out the Middle Man: Sony will be expanding its PlayStation Direct storefront to Iberia, Italy & Austria in 2023

 
Just What the Doctor Ordered
PlayStation has been humming along relatively fine, but Microsoft has been making big movies to set itself up as more than just a console competitor. If it wasn’t Microsoft’s acquisitions of Bethesda and Activision-Blizzard or aggressive investment in the Game Pass subscription and Xbox Cloud Gaming, COVID’s upending of console production and game development forced Sony’s hand. 

If PlayStation wants to become a multi-platform, multi-media player, it’s got to think bigger than the next Last of Us or God of War. And based on these developments, Sony has the right idea. The obvious question is, is it too little, too late? Fortunately for Sony, COVID’s impact on the entire industry may have bought enough time to catch up in the later stages of this hardware generation.