Sony president wants to improve margins with Multi-Platform releases.

CNBC: Sony plunged $10 billion after its PS5 sales cut. But a bigger issue is its near decade low games margin

The company's shares fell after the announcement, with around $10 billion of value wiped off the stock since the forecast cut, according to a CNBC calculation using FactSet data.

But analysts were watching another key metric — the operating margin in the gaming business — which came in just under 6% for the December quarter, according to a CNBC calculation. By contrast, Sony's operating margin was more than 9% in the December quarter of 2022.

"The shipment forecast cut for PS5 ... is not what is disappointing ... What is disappointing is the low level" of operating margin, Atul Goyal, equity analyst at Jefferies, said in a note to clients on Wednesday.

The latest quarter's single-digit margin for Sony is present "despite various tailwinds that should have driven up the margins towards 20%," Goyal said, adding that the situation is "extremely disappointing."

These tailwinds include sales of its first-party games, which are increasingly in the form of digital downloads, in addition to its high-margin PS Plus subscription service, which commands around 50% margin, according to Goyal.

Toto said that part of the reason why margins are being squeezed more recently is that software production costs have been rising.

"Spiderman 2," which came out last year and is produced by Sony-owned Insomniac Games, cost around $300 million to make, according to gaming website Kotaku, citing an internal presentation that was leaked after a ransomware group hacked the company.

"So these budgets seemed to have a significant impact on their gaming margin over time," Toto said.

https://www.cnbc.com/2024/02/19/sony-ga ... lunge.html

Probably one of the main reasons why Sony are going more multi-platform.

Yeah if game development budgets are going up, but the number of PS5 owners is static-ish, well they need to look elsewhere to sell their games.

And Sony, I'll do my part by pre-ordering Bloodbourne on Steam once the Digital Foundry crew certify it as running at 60+ FPS.

Elephant in the room: the technology is outpacing the budgets, and it's been that way for a while.

They're selling you the hardware they know full well 90% of the industry can't take advantage of. Nintendo outsmarting everyone.

It does make you wonder when "AAA" games now release at prices of £70 to £100 and that still "isn't enough" to enable much profit.

Maybe Sony will have an epiphany and realise not everything has to be the next Oppenheimer.

Make WipEout Sony, it won't cost you $300 million, you'll be able to run it at 8K shifting an additional tele or two, and it'll be scientifically more FUN.

KK wrote:Maybe Sony will have an epiphany and realise not everything has to be the next Oppenheimer.

Make WipEout Sony, it won't cost you $300 million, you'll be able to run it at 8K shifting an additional tele or two, and it'll be scientifically more FUN.

let me know if you find a genie to make this happen

It’s probably not as obvious because we’re too close to it chronologically but I do think we’re watching the “AAA” bubble burst before our very eyes.

The big problem for Sony as a publisher is that they’ve put all their eggs into that basket. Ballooning budgets, protracted development times. Nothing about the trend of how they’re doing it looks sustainable. Critically, they’re a hit factory, but even branching out to other platforms is really only kicking the can further down the road. It’s really just a question of how many more years of this style of development would they be buying. I think Sony’s reported push into GaaS was really just an effort to get one mega hit could bankroll their future big ticket games, and the reason they’ve been concentrating so hard on this space has been that they want to throw everything at the wall and hope one sticks. If you compare it to the alternative strategy (try one big shot at a time) you can end up with a Skull & Bones or a Suicide Squad on your hands and you’ll eventually just run out of time and money.

It’s funny that Helldivers 2 is their one big GaaS success so far, given it’s so hands off in how it’s gonna make long term money, and has (perhaps because of this) shattered all expectations. But it is also clearly not a AAA game. There are so many lessons to be learned from it’s phenomenal response, the question is can Sony learn them before the arse falls out of their whole development pipeline.

KK wrote:Elephant in the room: the technology is outpacing the budgets, and it's been that way for a while.

They're selling you the hardware they know full well 90% of the industry can't take advantage of. Nintendo outsmarting everyone.

1080p, 60fps is more than enough for probably 95% of games in my opinion, the jump to 4K and every game needing to be bigger and better than the last has just made cost’s ridiculous.

Of course, Nintendo are barely hitting 1080p/60fps with the majority of their games, but if this is what Nintendo decide to top out at, from a purely graphical point of view, I’d have little complaints, especially if it kept costs down so they could keep most games around the £45-50 price range.

Robbo-92 wrote:...
Of course, Nintendo are barely hitting 1080p/60fps with the majority of their games, but if this is what Nintendo decide to top out at, from a purely graphical point of view, I’d have little complaints, especially if it kept costs down so they could keep most games around the £45-50 price range.

It is perhaps surprising that Nintendo has been the place for cheaper games; their £50 (£60 for Zelda and Smash titles) pricing is attractive against Sony and Microsoft's £70+. I suspect that Switch 2 will see the £70 price tag arrive, though.

This is why you wonder why they are in a hurry to release new consoles, games cost a ton to make as it is. Just have devs focus on hitting performance, graphically I’ve not seen anything this gen that’s been truly mind blowning and you still have issues with performance in a lot of them.

jawa_ wrote:

Robbo-92 wrote:...
Of course, Nintendo are barely hitting 1080p/60fps with the majority of their games, but if this is what Nintendo decide to top out at, from a purely graphical point of view, I’d have little complaints, especially if it kept costs down so they could keep most games around the £45-50 price range.

It is perhaps surprising that Nintendo has been the place for cheaper games; their £50 (£60 for Zelda and Smash titles) pricing is attractive against Sony and Microsoft's £70+. I suspect that Switch 2 will see the £70 price tag arrive, though.

Pricing is very subjective though, what some people think is a bargain for £60 (Zelda for example), others will feel is £10 too dear.

Robbo-92 wrote:

jawa_ wrote:It is perhaps surprising that Nintendo has been the place for cheaper games; their £50 (£60 for Zelda and Smash titles) pricing is attractive against Sony and Microsoft's £70+. I suspect that Switch 2 will see the £70 price tag arrive, though.

Pricing is very subjective though, what some people think is a bargain for £60 (Zelda for example), others will feel is £10 too dear.

I agree that pricing is subjective and depends upon an individual's situation... but Nintendo still has the cheapest "AAA" games right now, which often stands against the general perception.

Budgetary concerns also seem to have caused an awful lot of looking backwards, rebooting the past, focusing on the established, whereas PS1 was all about looking forwards and being new. There was a glimpse with Astro's Playroom of Sony PlayStation (aesthetically with a bit of SEGA Dreamcast thrown in there as well, I thought) of old. New character, new game, new controller, new ways to play, didn't have to endure a load of actors RADA'ing around screen for 4 hours. Probably didn't cost a fortune to make either.

Just make smaller, cheaper games.

I'd also add "stop chasing infinite growth" but we know that's not going to happen

Squinty wrote:Makes me think, have we finally reached a point where games development is simply too expensive now? They've been complaining about costs since the 360/PS3 era.

The problem is what they're spending the money on. Well known voice-actors/likenesses. 1000s of lines of dialogue to be voiced, enough to span multiple, multiple movies. Amazing visual effects and animations (during cutscenes). And what kind of experience does it make? What are essentially interactive movies. How much of that budget goes into developing a new, exciting, fun, highly-interactive gameplay experience? From the looks of things that's not where the money is going. Most of what they spend money on, the majority of players probably won't even experience it - being some obscure trigger for a one-liner no one will even care about. It's a shame really. All that power and they don't use it for the thing it's meant for.

A coincidental article about much of the same feelings iterated in this thread:

Tomb Raider Remastered Is A Bittersweet Reminder Of How Games Used To Be

The technological progression of video games has plateaued in recent years. Every new generation used to mark exactly that - a generational jump in visuals, mechanics, and capabilities in the games we loved to play. By offering developers more powerful hardware, more impressive games could be made. For decades, we watched the medium evolve from basic sprites to three-dimensional behemoths bordering on photorealism. Now we’ve found ourselves at a standstill, improving on minor details and loading times instead of pushing video games forward like we used to.

As I play through these games for the first time in decades, I can’t help thinking about how we’ve increasingly come to focus on fulfilling our own nostalgia without thinking about how we can ensure a sustainable future. Not just for Tomb Raider, but every property that was firstborn in the early ages of 3D and persists to this day. We used to be able to lay track during the course of development, but now we’re headed towards a cliff with little to show for it.

Continues: https://www.thegamer.com/tomb-raider-re ... me-change/

Maybe we are all just grumpy old gits who just want things how they used to be

ITSMILNER wrote:Maybe we are all just grumpy old gits who just want things how they used to be

Yeah when they were affordable

ITSMILNER wrote:Maybe we are all just grumpy old gits who just want things how they used to be

You're_god_gamned_right.gif

I’d say Returnal is probably the best new gen game, and that at its core is an arcade rogue like. Sadly it didn’t sell too well. But it is a great game that stands out over the big blockbusters with gameplay above everything else. It’s a throwback to fast frantic arcade action.