Businesses nowadays consider engagement and interest in their product line to essentially be just as important as hard sales numbers, and Sony is no different. During yesterday's conference call with investors to mark the end of Fiscal Year 2023, the general manager of finance at Sony, Sadahiko Hayakawa, explained how the PlayStation business adjusted its focus during the PS4 era as a result of network services like PSN and games designed to be played in perpetuity.
Hayakawa said: "The business model up to and including the PlayStation 3 was focused on increasing the number of software units sold in relation to newly sold hardware for each console generation. After a transition period during the PS4 generation, the PS5 model has shifted to where playtime on platform has increased due to expansion of the user community beyond console generations. Due to this change in business model, during the PS4 generation, we were able to significantly grow profits in this segment, thanks to rapid digitalization and the expansion of network services."
While online multiplayer games were a standard during the PS3 generation, rarely did they offer more than a standard suite of modes, maps, and level unlocks. You could reach the maximum rank and see everything an online mode has to offer inside just a few days, then left to wait for the next map pack to arrive. However, once the PS4 rolled around, these experiences became considerably more in-depth, giving rise to the likes of Fortnite and Genshin Impact — games you could quite comfortably play daily and never have to touch anything else.
"In the PS5 generation, which has capitalized on the established user base, the trend is hard to see due to the impact of stay-at-home demand and acquisition-related expenses. But since the launch of the PS5, we have continued to achieve a high level of a more stable profit growth. As we enter the second half of the console cycle, we expect the number of new PS5 units sold to gradually decline," Hayakawa continued. "However, by steadily maintaining and expanding the consistently increased number of active users and user engagement while also strengthening control over business costs, we believe that we will be able to steadily increase sales and profits on the PS platform going forward."
Sony revealed that during March 2024, total playtime on PlayStation platforms increased by 15 per cent compared to the same month in 2023. "And for the entire fourth quarter of the FY '23, it reached the second highest level in history, second only to the fourth quarter of FY '20, which benefited from significant stay-at-home demand due to the pandemic." The comments also come as Sony confirms a 10 million increase in monthly active users on PSN year-on-year.
Despite a couple of stumbling blocks along the way, Sony is ready to deploy the sort of online titles people dedicate a significant amount of time to later this year. Helldivers 2 already arrived in February, and Concord is scheduled to launch in 2024. Have you noticed your PS5 playtime increase at all lately? Let us know in the comments below.
[source seekingalpha.com, via wccftech.com]
Comments 43
So they are looking to shackle and milk dry existing players. Noted.
I love games that offer a long playthrough, but I'm a single player, offline gamer, so I guess this news doesn't really have any direct bearing on me. I'll just hope for more of what I enjoy.
doesnt xbox like to focus on playtime and active users as well
Makes sense for their live service games and we also know that playstation cares about completion rates for their single player offerings.
Still dislike the idea of all games wanting all the attention of players. Nothing wrong with being a 30 hour one and done game which you may replay 2-3 down the line.
@Unlucky13 Oh it will have a bearing on you in some way shape or form when the engagement numbers aren't there and business decisions are made surrounding it.
Give me good first-party single-player games and I'll happily increase my PS5 playtime.
Corpos doing corpo things. SMH.
The pandemic was the worst thing that could have happened for gaming (and the world off course). I know Sony, Nintendo and Xbox had benefits because of it but look at the situation we are in now. They peaked way to hard in a short time.
A lot of people that wouldn't normally buy a game console bought one just to have something to do. Especially Switch and PS4 sold incredibly well back then because they were the most easily available.
I know all the companies will count those sales during that time but a lot of those users might not be users anymore.
@Martijn87 It's true that SOME of the users they picked up during COVID may not have stuck around, but we are still seeing higher numbers of total players (9-10 million more monthly active users) than at any time during covid on PlayStation. (114m max in 2020, 123m max in 2023)
I agree the companies overextended themselves. That along with cost of living crisis and several other factors have led to the recent contraction of the industry which is a huge low point, but I think things are still bright for the future.
Bring back SOCOM 2 multiplayer and I will play this game for the rest of my life.
Uh oh. I read this as: We see everyone playing Fortnite, all the Genshin Impact games, etc without paying for online, so we’re going to start requiring PS+ to play those games online. 🤑
Maybe not this gen but I expect it for PS6. 🤷🏻♂️
There's something cynical about an industry shifting from selling products to "keeping existing customers engaged" as much as possible, with a profit generating subtext to that. It reads like "metered gaming" is a glimmer in their eyes.
It echoes MS's way of doing things, which I always thought was about GP, but now I'm not sure.
@Martijn87 Completely agree. Both for Nintendo and PS the hardware numbers are probably significantly padded by non-uers, and I think that's a big factor in why so many games have been over-budgeting, is they're overestimating their real installable market based on that. Although in a lot of ways it only accelerated a problem that was already there.
@themightyant I highly question any metric that says total engagement is higher than in 2020 in home entertainment and would very much like to know how exactly they tracked those numbers in 2020 and how they track those numbers today. My guess is like with so many of the financial statements they're not the same number tracking the same thing but have different measuring points to arrive at better numbers. Statistics can say whatever you want them to say as long as you choose the right data.
Kind of like how the US economy is always great. As most industry is laying off by the tens of thousands we have "lower unemployment than at any decade since the 60's!" while failing to mention they changed how they define the metric so that if you worked a lemonade stand for an hour this month you're not unemployed, if you've been unemployed for years, you're not unemployed. By only counting employed people and counting finding money on the ground as employed, we've successfully reached 0% unemployment! Low inflation (because we changed the index we use to not include food, shelter, or fuel like the metric that said it was high!) Classic Soviet statistics tracking. Solve a problem by defining it away.
@breakneck I am always shocked by the low percentage of players that complete games. Sometimes they barely manage to get past the first hurdle. "complete the tutorial...80% of gamers have achieved this"
Playtime is the biggest nonsense metric going.
I played MHW for 1000hrs, it cost me £50. Had I played 10hrs they still would have got the exact same from me.
@NEStalgia From the Sony Investor PDF:
While it does say it's only an estimate this is word for word the same description given during covid years. Sony have always highlighted when their methodology changes for other listed metrics. I believe they have to legally so as not to mislead investors. They did this recently for "Other games" (games not sold on PlayStation systems) and a few other metrics so it's safe to assume the methodology used is the same.
The whole point of a console is plug and play- you can easily experience lots of different games by simply swapping out one disc or cartridge for another, and the box costs you a standalone £300-£500. If you’re only going to play one game as service you might as well bypass the box and get an all in one PC instead. That’s why World Of Warcraft was a big PC game. Without showing the variety of what their console offers Playstation are sort showing it’s a bit pointless.
The way to increase my engagement is continually releasing solid experiences. My Rebirth playtime exceeded anything I did on PS last year (though TotK will be unlikely to be topped) and Dave the Diver is getting close (two hours now from tying) to FF16, last year’s #1 on PS for me. However, I’d say my playtime is down overall this year. It might be my lightest year since 2016 for overall playtime and that’s directly because games right now aren’t as much of to my preference this year. Give me the cliche third person, story driven character games and I’m more invested.
My playtime has decreased significantly due to a change of job and children . Ain’t no going back on them Sony sorry
It cuts both ways. It can be engaging when its new but then you get a steep fall off. I recently went deep deep into Destiny 2. While I still enjoy it, having done the main campaigns and now doing the seasonal campaign, there is a lot of stuff that clearly has no respect for your time. Repetition or a very long sequence where you only die if at all right at the end and then have to redo 7-8 minutes of tedious reclear to hit the challenge.
I am not sold on the new expansion yet mostly because I get the feeling this “playtime is king” ethos will make the game feel like wasted time.
This is precisely why most MMOs drop off like a rock after the first two months. The new content is stale and redoing it endlessly has no appeal.
For every WoW, Destiny, Fortnite/Apex, FC/Madden there are untold dozens of similar games trying to cash in on “playtime and engagement” and end up with player counts lower than a DOS emulation of King’s Quest IV.
"After a transition period during the PS4 generation, the PS5 model has shifted to where playtime on platform has increased due to expansion of the user community beyond console generations."
In other words, you couldn't really make anything that compelling to show the big generational leap so you decided to push all the games onto PS4 as well so you'd make more money despite hampering the ability to show off what the PS5 can actually do.
@Martijn87 I don't think Nintendo has suffered the post pandemic knock back in the same way that Sony and Microsoft have. The Switch sold amazingly during the pandemic and releases like Animal Crossing just added to that. Nintendo's first party titles continue to sell ridiculous numbers despite being over 7 years old in some cases.
@NEStalgia completely agree. Both for Nintendo and PS the hardware numbers are probably significantly padded by non-uers, and I think that's a big factor in why so many games have been over-budgeting, is they're overestimating their real installable market based on that.
You ready for me to get slammed on here worse than our pal Jimbo? What you just said above shows something i wasn’t going to bring up. PS has a 2-1 hardware lead on Xbox. But Software sales were XBOX 7.11 Billion and Sony 7 billion. Last i checked hardware sales makes pennies if that and the money is in software. Sony has to see that and say HOW? Then they look at the PC sales and the ABK deal and realize they need to go to PC more aggressively and have more online games cause single player games and the casuals that buy PS5’s to play Madden and FIFA aren’t all that profitable.
Boarding up my windows now, the rocks will be flying at the Hicks house LOL!
My gameplay hours have fallen off a cliff. 910 hours in 2022, 149 in 2023, hardly any so far this year.
There are reasons for that... my mum has been quite ill, and I'm her full-time carer... but even before that, my gameplay was dwindling. Apart from co-op, I'm not interested in online games, and Sony have been woefully deficient in their single-player offerings so far on PS5.
Liam Croft wrote:
Such a sad paragraph, there were plenty PS3 games that took quite a while to fully rank up and unlock everything, sometimes quite a long time.
It was much more compelling to do so since ranking up you unlocked cosmetics among other things, instead of paying for them.
Fortnite etc being more in-depth? Lol, they perpetually add cosmetics for purchase, oh yes, so much more in-depth. Load of rubbish, they're less in-depth if anything. Happy to elaborate if anyone replies and disagrees lol, but I'll leave it at that for this comment
@BigJoze I also found that quote odd. The PS3 COD games had prestiging, as did RDR1. In many ways they were a free Day 1 version of a battle pass—each time you reset, you unlocked things faster but at higher levels the rewards were cooler.
I distinctly remember RDR1 having a zebra mount that was ridiculously fast if you put insane amounts of time in grinding. I put hundreds of hours in and never got close.
@themightyant How can we assume the methodology was the same when the methodology wasn't even listed? It's an estimate based on....what criteria? What measuring instruments? We know absolutely nothing. And as an estimate it's bound to nothing.
Now obviously the biggest spike they have that could make it legit is going to be PSN for Helldivers on PC. But that in itself is kind of a change in the methodology if they're now including a bunch of PC login accounts for a popular PC game (which they are.)
Does using the PS app count? I'm sure it does. It uses the network. Does hitting F5 on the sale page count? It's using network services. Does advertising count? If advertising and network services are reported together, it might.
There's a lot of ways to play with the numbers. Again, it's very very very suspicious to me if 2024 has higher MAU metrics, real PS console players interacting with more engagement, in 2024 than in 2020 while PS 4 was still peak and all consoles were sold out and being sold at extreme scalper prices and most of Earth had nothing better to do at all. For all the platforms, I can't see that artificial peak being exceeded, really ever, without massive growth which hasn't happened. It's a spike on the graph that stands out to me as a red flag on the measuring. I'm not saying they're making the number up. I'm saying there's extreme likelihood they're creatively interpreting their metrics to achieve a more holistic view of their performance trends.
@__jamiie Switch benefited from not being in the middle of a generation switch with their old production lines shut down and the new ones not up and running yet, so they had stock and availability whole Sony and MS had none. I suspect MANY of those switches sold then are just gathering dust, too, but they sold SO MANY of them that their user base is still there to buy games.
@HonestHick LOL yeah, although Microsoft is almost certainly including King's mobile business in that which was more than half of ABK's net profit before the purchase, so even PC isn't making as huge a splash as just the mobile acquisition. But OTOH they haven't actually even owned a Call of Duty at launch yet, so that's not even a factor. I think PS has been surprisingly damaged by the rise of the casual single game player. Their entire business model required a certain type of customer they've had since 1995, and their success as a cultural icon ironically harmed them, as they're now selling Fortnite adapters by the millions at little margin to which they won't be selling any other games.
I still fear the GTA6 effect. Yeah the game will sell great, it'll make some short term numbers look great. but the sheer number of consoles, especially PS5s that sell just for people to spend forever in that one game is really going to hurt them. Maybe with subs they won't care. But it'll lead to more collapses among other publishers for sure.
@NEStalgia But surely if the games keep selling millions, the user base is there?
@NEStalgia 100% it includes King’s money. That was the whole reason for the ABK purchase. Mobile money is more than anything. Crushes consoles and beats PC. Well yeah i mean just look at this site, they were up in arms when Jimbo was saying gaas games. I was talking on here yesterday with a “friendly” fellow and i said there needs to be balance in Sony’s approach to 1st party games. I think they will do that by the way. They can’t be the PS4 this gen and make 4% profit in return. Meaning sure have some of those killer single player games fan’s know and love but have HD2 and others make the real money. Again i am on record saying i trust Sony will attempt that and of course include PC. I have said GTA6 will lose other companies a lot of money starting in 2025. That will be a game someone buy’s a PS or Xbox for and that game and maybe 1-2 sports games and thats it. It would be insanely stupid for anyone not COD to release a game around the month of GTA6.
@NEStalgia @__jamiie the user base is surely there, Single player games still sell well they just don’t profit much and on top of that they don’t make people buy PSN with is another revenue/profit stream being missed by those players.
@HonestHick Gaming is sad where good games make little money and mediocre games make billions.
Yeah, the industry seems excited for GTA, and probably excited it's not on PC (why is it not on PC??) but, in some ways I think GTA will represent the final blow. I know Phil says a lot of things and then half of them are contradicted and nobody here likes Phil, but I think he was 100% right in talking about the future of the console razor and blades business model ending, and I think Sony talking about MAU etc is saying the same thing he said in a different way. It just no longer makes sense to sell cheap/loss taking hardware when you just sell one or two games to most people buying it. People aren't building libraries anymore, they're just buying a big white phallic Chromecast for Fortnite and GTA. IDK what that means for future hardware. Do consoles go the Nvidia route and just try to make $600 profit on their latest GPU?
@__jamiie Sure, the user base is there, but I don't think that means that Nintendo didn't suffer the same knock back the other two did. I think they simply had so much larger a sales glut during that time because they had inventory and the other two didn't, that the knock back effect isn't as significant to their total install base, because it was so much larger a glut. Plus nobody was buying a Switch just to buy a switch because it was the thing to buy because it was already old. People were buying Switch to "get a console" vs PS5 and XSX that people were buying them "because people are buying them."
@NEStalgia Phil isn’t liked here cause most of what he was doing Sony did a year or so later. It was like a window of whats to come to PS. Sony adopts a lot of MS’s way, thankfully not the bad messaging part or lack of 1st party releases. I do think Phil took heat for saying exclusives are dying and not sustainable. There isn’t much to nit pick over Sony being the popular console. They earned in more than others. But with that comes the headache of how do we get our player base to buy more than free to play and GTA and COD, while producing 300 million dollar single player games that gamers buy and trade in and sales sharply fall. Thats hard to do in today’s market. Can they figure it out, maybe. They have great teams and good software in the pipeline. But i do think they made a mistake in raising the PSN price to $80. That turned off a lot of subscribers. Also with HD2 there is no way their investors will stand back for long and not ask why everything isn’t coming to PC, cause investors don’t understand what games do well or not on PC. They just want to see the whole catalog there. Overall i think Sony will struggle a bit but they will have enough success’s to continue to do their thing. But the PS4 day’s of all their games being single player is likely over. Sure we seen a lot of service games canceled by Bungie. But they have to have a few more in early development. I will get my PS5 Pro and enjoy the exclusives that i like much like i did in the PS4 era and avoid the controller as much as i can for 3rd party games. Nothing much has changed for me. They get just enough money out of me to make me a worthwhile customer for them.
@HonestHick "not the bad messaging or lack of first party"
Wait You've seen the 2024 lineup right? . And when did Sony communicate anything under Jimbo?
For me I'm on in fence on the pro. I was against but Xbox has me thinking maybe. But that's money I could sink into PC. But I don't want to have to do that because it's a MASSIVE money sink and a lot of hassle. Plus I leaned never to do high end in PC the hard way. Youre do better with frequent upgrades than trying to future proof at high premium. If I do pro I stick all console. If I do pc I keep a base ps for games that don't come to PC.
And a handheld matters to me. Xbox will have it. Pc has it. Nintendo has it. Ps has portal and proprietary earbuds . If they do a real handheld you know it'll be gimped.
The Twitter console war is ablaze with people using this as ammo.
I simply reply this is bad news. Any company focusing on this is wanting you to live in a game and all this means is less innovation and new experiences and more of, what can get people addicted to our game? Just a larger attempt at ripping off Fortnite, COD, etc.
Re: “ Have you noticed your PS5 playtime increase at all lately?”
Depends on what you mean by playtime. Ultimately, yes, because I’m playing Balatro when I’m not working, eating, or sleeping. 184 hours into that damn game, and I’m still not anywhere near done. Grr!
My nephew, on the other hand, always seems to have his PS5 on, but he’s using it for non-game related things, like YouTube, Netflix, Tubi, or one of the other apps. Is that time considered “playtime”?
@NEStalgia
“ It just no longer makes sense to sell cheap/loss taking hardware when you just sell one or two games to most people buying it. ”
I can’t help but feel this is a little basic. Those people who just buy the one game are profitable as they spend a lot on that game in Microtransactions. The key then is to ensure you get a cut of these Microtransactions as that is where the money is. 30% on everything bought through your walled garden. It could be argued this is better for the platform holders as there is no chance of lending and second hand use.
If it takes spending 500 million on a couple of prestige games that just break even, but that make people feel they should buy your “Fortnite adapter” as you put it, rather than adapter b, then that’s sunk money worth spending as it facilitates the profits from the crap “games”.
@thefourfoldroot1 Not really, those games are built on the whale model. While console whales and mobile whales are going to be somewhat different, at least from the mobile market, it's something like 10% of players actually spend money on mtx. Everyone else goes for the free ride. It's just that 10% spend a lot with the worst dumping thousands of dollars into a single game. Even if we're generous and say 25% of console whales are spending money, if we go really reductive and say 15M PS5s were sold just to people playing those 1 or 2 games, at the most generous that's 11M of them that aren't really spending money on the platform. It's a hardware sku sold but it's not profitable. Those are made up numbers, obviously, we don't know if it's 1M or 30M that are in that single game crowd.
Yes, it's still insanely profitable getting that 30% cut of the mtx, and that's why they all chase the mtx dragon, but it also means console units sold, and hours played metrics don't mean much on their own, only a portion of those total players actually generate a profit. But that portion generates outsize profits.
I think the real key though, and I think that's the key Sony itself has realized too, is that they no longer need those 500M on a couple of prestige games that make no money. Everybody buys their Fortnite adapter by default because everybody else buys that Fortnite adapter. Marketing and social penetration have made it the default, and those big budget games that "nobody" buys that make no money are no longer needed as a marketing vehicle to keep the momentum going. They know that now.
The only real challenge from here will be phones becoming more powerful so that a "Fortnite adapter" isn't needed or desired at all anymore, or Switch 2 being powerful enough to be a rival Fortnite adapter for cheaper with more convenience.
The business remains profitable that way, but not in a way that's valuable to any of us here. It's more the opposite, abandoning our low margin for the very high margin fortnite adapter market. But also means most people buying the hardware aren't actually generating a profit, they just facilitate the whales who do. The bigger question is, for the whale that generates hundreds or thousands in revenue....is raising the box price another $300 going to stop them or send them to PC or will they stay?
@NEStalgia Yeah Jimbo did have a way with his words. PC would be a huge shift for me. Still not sure if i do it or not. I for sure trade my PS5 or better yet sell it for a little more and pay the rest for the Pro so not a huge investment there for me. I would buy the handhelds for PS and Xbox. More Xbox cause thats where all my games are at from 3rd party. I’m excited to hear and see what Sony has for us in a few weeks. I think they will show the Pro there, but you never know. Concord I suppose should get a look and of course the rumored PS5 Pro enhanced titles from Sony, Horizion Zero Dawn. The game i beat front to back and couldn’t understand and follow the story at all. Pretty graphics tho.
@NEStalgia
I’m not sure why it matters to the argument what the percentage is of money from whales to standard players. You need to have as much market as possible to addict people into becoming whales. It’s still a numbers game that relies on you capturing enough market share to create those whales in your system.
I don’t buy that “they no longer need those 500M on a couple of prestige games that make no money . Everybody buys their Fortnite adapter by default because everybody else buys that Fortnite adapter. Marketing and social penetration have made it the default, and those big budget games that "nobody" buys that make no money are no longer needed ”
A few reasons I disagree with some of those points: 1) crossplat means you don’t need the same platform as your mates to play the same big game any longer (which is why the market leader in Sony fought so hard against it, and MS where pushing so hard for it); 2) even whales seek out new highs (new games) and those big budget games (and more importantly the social conversation that makes them feel a leading part of a community) will appeal if only momentarily, keeping them engaged in your platform; 3) even if true, it would only be for one generation. Constant marketing is required to not lose the gained advantage. You need to keep attracting (and ultimately addicting and turning into whales) each new generation.
The answer to your final question though, is that whales will always gravitate, not to console or PC, but mobile. They are fundamentally addicts, and a system that lets them always have the drug in hand, like a vaping kid, is the system that will always win out.
@thefourfoldroot1 I've said often that SIE could shut down all their studios today, and their sales would remain mostly unaffected. Their social relevance as default console is so strong, and by and large the market for those prestige experiences so separate from the real moneymakers it really doesn't matter anymore. It used to. But they've done their work now unless a new competitor shows up, but I don't see that happening.
You're not totally wrong on the addicted Mobile whales though. It's terrifying the way mobile developed into what it did.
Live Service Games 👎🚫
Souls Like Games 👎🚫
These two types of games are taking over and they are the games I hate the most.
I remember playing Clash of Clans when it first released and not really playing anything else. When I finally quit I realised it was an addiction. The game was just a repetitive loop which had the right ingredients to keep a person addicted and returning each day.
Single player games are so much better Because they have an endpoint that results in you completing the game. This allows you to move on and enjoy a brand new game.
@HonestHick See, for me Horizon ZD is pretty much the only modern Sony game I care about. It's actually the only Platinum trophy I have, other than Astrobot. Loved that game. Loved Call of the Mountain VR (RIP Firewalk), I bought Forbidden West but haven't played it yet. But from all I've heard the story of 1 can't be topped.
Actually the story is a bit too close to modern home: Tech bro CEO is full of himself, releases self-replicating AI-based war robots that consume biomatter for fuel, sells them to both sides of conflict groups to profit. AI becomes sentient, goes rampant. Every last living cell on Earth annihilated until it's a barren rock. Tech bro is "sorry." Basically it's the story of 2029 but told in 2017. Humanity saved by briliant scientist that bottles digitized versions of Earths biology in AI based terraforming system and all Earth's knowledge to rebuild. Tech bro decides to erase all knowledge and kill everyone that ran the AI terraforming to prevent what happened (that he caused) from happening again and keep humanity in the stone age. New terraforming AI is also broken and starts attacking itself from its modules. Shady humans wield this power because power. Moral of the story is pretty much AI is a pandora's box of guaranteed mass destruction because it's made by humans, but doesn't get better when it remakes itself. The lore indicates earth had spiraled into a corporatist slave state dystopia before the machine war.
TL;DR HZD is the story of Nadella + Gates & us. Honestly I find it hard to want to play the sequel because the story of AI devastating life feels too real now. It's less fiction and more prediction/portent. Minus the mountain sized land-squids.
@kirkn Yeah, the industry is bent on merging the model of mobile into the model of console, because that's where the big money is. Agreed on Souls-like. I don't actually understand how that became the big thing taking over gaming. The hard-for-the-sake-of-hard masochistic gameplay of that series is by definition something that is very niche. How it became this mainstream success, IDK. The whole idea of the design was that games were becoming too easy and it was for those that missed the challenge of "Nintendo hard" games in the NES days. But that's a niche. And most of the "Nintendo hard" games were accidentally hard due to poor designs, making up for extremely short gameplay, and many games being designed by arcade designers used to making games unfair to get people to put more money in the machine.
@NEStalgia I’m glad you liked it. Many people do. I had it was a 8.2/10 for me. Graphics were really nice. That studio always do nice graphics. Seems like a lot more of it is on the way.
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