@NEStalgia you’re still looking at it from YOUR value proposition.
PC gaming isn’t for everyone. I have a nice rig I use for games that don’t work well on console (4x games mainly)- you are 100% incorrect saying the target audience would be better served on pc.
There is NO question that a console experience is easier. Common specs and plug and play is still way easier. You are someone that obviously understands PC builds…not everyone else does. To a laymen PC specs are daunting and people don’t want to worry about settings and specs.
Some people have $1000s of dollars in PlayStation digital games. Wouldn’t you agree that buying a $700 pro is less expensive than buying a pc and rebuying $1000 of games on steam?
Your argument of the $1200 investment is also flawed. If someone only has a ps5 and they want to have better specs that should drop $1200 for a decent gaming pc? So the options would be $500 +$700 vs $500 + $1200 plus rebuying games.
You’re not educating - you’re explaining YOUR reason. Once again you have no idea anyone’s reasons.
@NEStalgia dude- some people don’t want a pc. I prefer console gaming because I sit at a computer all day. I have all of my games digitally on PlayStation.
I have a nice computer and a ps5 - I also bought a pro. Why? Because I make good money and want to play games at the best fidelity possible. I have no desire to play on pc for many reasons.
Do you think it was dumb for me to buy?
You have no idea why people bought this…you only know why you DIDNT and expect everyone to have your exact line of thinking.
Can someone explain to me the discourse from some people in gaming right now?
$700 Is too much for an upgrade. Sony is greedy for trying to make a profit.
$70 for games is way too expensive!!!
$ 10 upgrade for a ps5 version of a ps4 game?? That’s greed!!!
anyone that supports this is a “mark” “boot licker” etc
Then…
“Where are all the new games?!?”
“These corporations shouldn’t be laying all these devs off- they are greedy!”
News flash people…Sony and every other corporation in the world is greedy. They are there to make money. If you don’t like it don’t support it. Don’t get on here and give people ***** for spending their own money.
This industry- more than just about any other industry - has been extremely inflation resistant. We are paying less than we were inflation adjusted 10 years ago.
If you expect Sony and other corporations to lose money or survive on ultra thin margins so they can get free stuff - I’d argue you’re greedier than Sony.
Corporations suck. They do ***** that sucks. Stuff above that I mention suck - I’m not personally going to pay $10to upgrade horizon but I’m not gonna get online and complain about it and insult the intelligence of people that do.
You’re free to not support it either but getting on here and insulting people makes you look worse than Sony
So if someone doesn’t have physical games, wanted a other PlayStation 5 and has plenty of disposable income to make sure they have the best option to play now and in the future then we don’t have much “grey matter”
I’d argue that people that get online and tell people who make good money how to spend it are the ones lacking “grey matter”
It’ll keep happening - people buy them and it’s probably a pretty low risk endeavor for Sony.
I just hope they arnt pulling resources from development on new games for this. I can understand wanting to have everything updated and running well but not at the expense of new product.
I loved Dragon Age Inquisition. I had taken a 10 year hiatus from games until like 2018 so I missed the discourse on it and played it years after release.
Never understood the negative reception or reaction to it. Sometimes I think people just dogpile stuff because it’s popular.
If you live outside of the US this comment doesn’t apply to you as I think you are justified in complaining about the price point.
If you live in the US then I have no idea why you’re complaining about $700. People saying they should include stuff in an OPTIONAL upgrade. Sony isn’t going to sell these at a loss. The base PS5 is there for that - they can and should make money on a niche product like this. If you think the price point doesn’t justify the upgrade - great don’t buy it! It’s just like people not wanting to buy a Cadillac and getting a Chevy.
All the sudden everyone is up in arms about a disk drive? 85% of the games sold on the platform are digital. The stand is annoying but it’s only if you want to stand it vertically.
I’ve seen people saying it should be $500 or $600 with a disk drive. You can’t buy a decent computer with the PS5 specs for $500 or $600.
This is the same group of people that complained about $70 price of games…games sales haven’t slowed. The same group of people saying the portal was over priced (sold like hotcakes).
This thing is going to sell out…and if it doesn’t they’ll lower the price and (shock) still have margin built in so they don’t lose their ass on it.
I don’t plan on buying one of these…the people complaining about it are coming off as entitled babies. Companies don’t stay in business on tight margins and losing money on products. It’s how the world works…
@Sequel ok - well I’m an actual business analyst and executive at a large company.
1. PlayStation overall won’t “fail” without your suggestions
2. They priced this thing to make money. It’s not the base model. They are capitalizing on people that are willing to shell out $700 for an upgrade. They’ll manufacture the product and sell quite a bit at $700. They likely worked in plenty of margin in the event that it doesn’t sell well.
Starting at $700 with good margin to test the market is the smart business thing to do. That way they can later drop price to $650 or so and still make margin. If they start at $650 or as many people demand $500 they have nowhere to go and could end up losing a ton on the product.
This isn’t the base model “lose money to make money on software”. They have 0 incentive to not maximize profits on this console.
I’m not defending Sony and the price point of the pro but the fact that Stands are flying off the shelf right now indicates that they don’t need saving…the Pro is going to sell well.
Would I ever buy a $200 version of a game that has a plastic statue with it? No - but some people do and that’s fine. Same goes for this - if you don’t like it don’t buy it and send a message to PlayStation that way - if you want one buy it and move on.
Those of you arguing online about this thing - take a step back and realize you are arguing and hurling insults over a freaking PlayStation…this life is short and getting angry over someone else’s opinion on a video game console is not worth it.
Remember guys we live in a world where people buy Cadillacs which are basically Chevys under the hood for a ton more money.
PlayStation is putting this out there because they can and it’ll sell fine. They don’t expect this to sell like crazy so they have to charge more for a premium product.
I really tried to like Sly - played all three on vita a few years back and didn’t have fun with them at all. I appreciate others getting to experience this.
Not sure why but I really have a hard time enjoying much of anything from the PS2 generation that I’ve gone back to. Everything before and after are fine - it’s like a mental block or something.
You’ve never gone out to eat and had terrible service? A waiter that won’t come take your order? Then had terrible food?
You’ve never dropped $30 on a movie night and the movie sucked?
The difference is if a game launches broken (which most don’t) you still have the $60 15 hour game…the other two examples your money and time are gone. Forever.
Even if you drop $60 on a game you don’t like you can sell it back and recoup something.
This is coming from someone that doesn’t buy games day one typically - but complaining about the prices of games is kinda nuts. In terms of value for time it’s still one of the best deals out there.
@OctolingKing13 the counter argument there is at $60 - 15 hour game is $4 an hour of entertainment. $4 an hour for enjoyment is a pretty outstanding value proposition. Can’t get that anywhere else.
Can’t go to dinner for $60. Going to see a 90 min movie is $30 these days.
I rarely buy games at launch and never really play any live service outside of FF14. I wanted to see what the fuss is about and started last week…I’ve never enjoyed an online game like this. I hope the content continues - excited to see how it evolves
@Friendly What i think you are forgetting is that companies are around to make money. I dont understand your comment at the end - why would Sony willingly keep people around that they didnt need? Would you pay employees that are not producing?
London got closed because they didnt make money. Sony didnt get rid of individuals that were high performing. Layoffs suck - it hurts families but unfortunately its important for future health.
As much as I dont want to pull this card - I do this for a living. As much as the executives got Sony into this position - they are sitting on razer thin margins - every analyst agrees with that. Regardless of the margins your business runs on - you're not Sony. 6% EBIDTA can crash down to 0 quick in the event of rising cost. Inflation is more than 6% right now - its not healthy.
If I worked at Sony and I was busting my ass every day and I saw other employees not working very hard and getting paid and not producing anything profitable - thus putting more pressure on me - I'd be pissed. Money doesnt grow on trees and if a company wants to retain talent they have to trim the fat.
At 6% margin you have pissed off shareholders, you are not able to take loans out from the bank to grow, and you are one bad bet away from being in the red.
@Dodoo as much as this all sucks - I think it will be good for the industry in the long run. Companies are realizing that they cant continue to put money into non-profitable / bloated games. They cant keep a bunch of people employed whenever they dont product things that sell.
Part of the issue with things not selling is that there is just too many games that get released. The flood of games makes it impossible for certain things to succeed. To me this looks like a major market correction - the execs made bad decisions and flew too close to the sun while throwing money at acquisition and hiring a ton of people. Cutting down on the extra fat isnt going to reduce the amount of revenue that comes into these companies - they'll be more profitable and hopefully keep talented people around. Less games is actually better for the industry - I think this will be good for everyone in the long run.
I could be wrong - but sometimes you have to take a few steps back and reevaluate in order to be successful.
@Friendly agree or not - their profit margins were down 6% last year vs 2022 and a 6% current profit margin is a bad place to sit for a publicly traded company. Also keep in mind Sony has business segments outside of PlayStation. They are still a manufacturing company - not a services/ software company.
6% EBITDA, once again for a company that does any type of manufacturing is very slim. Common agreement in the financial world is 10% is considered healthy…sony fell below that in 2023. Not sure the nature of your company once again - but the situations are obviously different. Sony operating on a 3% margin like your company would be seen as catastrophic…my initial reaction to 3% at your company was wrong - don’t know the business but I assure you Sony is struggling at 6%.
@Friendly wait - I might have misunderstood your comment. Do you guys manufacture anything or do you sell engineering services? If it’s the ladder then that makes sense as you have less overhead.
Sony manufactures products with fixed selling prices. If the price of super conductors or something they don’t have control goes up by 10-15% they could be screwed. You can’t live on 3% margins whenever you are buying components for manufacturing from somewhere else.
Also 6% margins for Sony is scary whenever they saw a 6% drop in EBITDA last year…another 6% drop…not good
@Secryt the verge atricle lumped gamepass core subs in with standard gamepass subs. The real number is 25 million and has stagnated. Regardless of if it’s currently profitable it’s not sustainable.
$7 billion in top line sales isn’t enough to sustain the amount of development teams they have. Whenever they release a product they get no influx of capital because big releases don’t drive new subs. They’ve built themselves into a stagnant business model
@Friendly if you work for a company operating on 3% EBITDA you need to find a new job. I’d be scared.
My company just went through a massive restructuring because we had a year of 5%. We are back up to 10-12% which is healthy for $500 million company. 3% margin is one bad decision away from bankruptcy…
@itsfoz the math of gamepass doesn’t work man. 25,000,000 subs at $11 a month= gross profit to all Microsoft studios of $3.3 billion. Remove development costs and the cost to secure third party titles. Most of Xbox revenue comes from that.
God of war ragnarok alone brought in NET PROFIT of almost $1 billion.
God of War Ragnarok - a stand alone title was more profitable than gamepass. This is why Sony won’t go to day one subscription. It’ll never happen.
@Tecinthebrain more profit before overhead. They are making more gross profit but their EBITDA numbers are down across the board - which is a better metric for business health and sustainability. Most are essentially down 6-7% year over year.
@wiiware a little of both I’d say. If I were to bet three things are going to happen.
1. More layoffs and exploration of ways to cut costs through AI, asset flips, cutting content and a push back to the office for many dev teams that arnt.
2. More investment on known IP and games that are safe bets. More sequels to popular games, more licensed games and less innovation as publishers dont want to take risk.
3. Rising game prices and more micro transactions filling games to help recoup dev costs.
We are already seeing these trends - but it’ll get worse.
@ATaco I don’t disagree at all. I hope I’m not coming off as defending corporate interests because I’m not at all. I’m personally pretty high up at a large company so just giving some business insight based on how many companies operate. It’s not good and unfortunately the games industry has become victim to this because people saw money was there.
It sucks…just trying to educate why this is happening right now.
@Ken_Kaniff read my comments above. Most companies operating expenses are out of control. Over hired In 2020 and 2021 - inflation and cost of doing business is crushing. Gamers don’t want to spend more on games and the cost to make them is climbing. All of the major developers are seeing their EBIDTA numbers drop which indicates business health.
Can’t keep people around whenever they are working on stuff that won’t make a profit.
A average game has to sell north of 1.5 million copies to break even.
@Deoxyr1bose I’m not saying the executives that made the decisions shouldn’t get canned. They probably should - their assessments of the situation was stupid.
Pay cuts don’t really do much though. Cutting 600+ employees plus benefits is probably saving EA around $60 million. Executive pay cuts can’t ever free up that much cash…
They SHOULD take one in order to keep their current employees from going nuts and they should spread some of the savings out to their employees that stay…but who knows if they actually will.
Not defending the corporations…just giving a peak into corporate workings.
The issue is that post 2020 these companies - and many software companies outside of the games industry over hired. As companies look at the future forecasts they can’t keep people employed and working on projects that won’t be profitable.
The executives should have known 2020 and 2021 were anomalies - but it’s better for them to cut employee bloat now before they start to sink. People losing their jobs sucks but if you don’t want game prices to go up or an influx of crappy half baked products flooding the market this is probably good for the future health of the industry..
@Steel76 I’m not defending what Sony - but unfortunately that’s not going to happen. It’s a business and they want to maximize profits. They got away from making those types of games because it wasn’t profitable. Those games don’t sell well and having people work on something that likely won’t make money isn’t a sustainable way to run a business.
It’s why Insomniac is essentially going to be a Marvel studio now - those games sell.
Once again - not defending what they are doing. I don’t like it..but it’s the reality of the situation.
This is the result of rising game development costs. Less expensive to remake something, sells better because it’s a known commodity.
Too much risk with spending $100-200 million on a new IP. We saw what happened with Star Field and other new IPs that don’t sell as well. Spend less, quicker cycle, easy money.
It’s going to be licensed games, remakes, established IPs for a while with a few new ideas sprinkled in.
I always read all of the comments about remote play and input lag. I use a backbone and the PS remote play app and it usually works flawlessly. I’m not sure if I’m just lucky or if I am just an idiot when it comes to input lag and don’t notice it. I’m excited for this release. I’ll try to pick one up around Christmas
@RedShirtRod Microsoft allowed that to happen because of 3 reasons - 1. Companies like mad cats entered an agreement with Microsoft to split profits. 2. Microsoft didn’t have a patent on the faceplate. 3. Mad Cats found a legal way around the Microsoft patent.
@huyi It’s not greed - it’s protection. What obviously happened here is Sony enforced their cease and desist on imagery on the PS5 while they got their ducks in a row to protect a design patent on their faceplates. If Sony has a patent they need to enforce it - doesn’t matter if it’s a mega organization or a small company patent law is there to protect people and companies from counterfeiting. The company they shut down was likely doing something illegal - good on Sony for enforcing.
Comments 39
Re: Fans Appear to Be Coming Around to PS5 Pro
@NEStalgia you’re still looking at it from YOUR value proposition.
PC gaming isn’t for everyone. I have a nice rig I use for games that don’t work well on console (4x games mainly)- you are 100% incorrect saying the target audience would be better served on pc.
There is NO question that a console experience is easier. Common specs and plug and play is still way easier. You are someone that obviously understands PC builds…not everyone else does. To a laymen PC specs are daunting and people don’t want to worry about settings and specs.
Some people have $1000s of dollars in PlayStation digital games. Wouldn’t you agree that buying a $700 pro is less expensive than buying a pc and rebuying $1000 of games on steam?
Your argument of the $1200 investment is also flawed. If someone only has a ps5 and they want to have better specs that should drop $1200 for a decent gaming pc? So the options would be $500 +$700 vs $500 + $1200 plus rebuying games.
You’re not educating - you’re explaining YOUR reason. Once again you have no idea anyone’s reasons.
Re: Fans Appear to Be Coming Around to PS5 Pro
@NEStalgia dude- some people don’t want a pc. I prefer console gaming because I sit at a computer all day. I have all of my games digitally on PlayStation.
I have a nice computer and a ps5 - I also bought a pro. Why? Because I make good money and want to play games at the best fidelity possible. I have no desire to play on pc for many reasons.
Do you think it was dumb for me to buy?
You have no idea why people bought this…you only know why you DIDNT and expect everyone to have your exact line of thinking.
Re: Fans Appear to Be Coming Around to PS5 Pro
Can someone explain to me the discourse from some people in gaming right now?
Then…
“Where are all the new games?!?”
“These corporations shouldn’t be laying all these devs off- they are greedy!”
News flash people…Sony and every other corporation in the world is greedy. They are there to make money. If you don’t like it don’t support it. Don’t get on here and give people ***** for spending their own money.
This industry- more than just about any other industry - has been extremely inflation resistant. We are paying less than we were inflation adjusted 10 years ago.
If you expect Sony and other corporations to lose money or survive on ultra thin margins so they can get free stuff - I’d argue you’re greedier than Sony.
Corporations suck. They do ***** that sucks. Stuff above that I mention suck - I’m not personally going to pay $10to upgrade horizon but I’m not gonna get online and complain about it and insult the intelligence of people that do.
You’re free to not support it either but getting on here and insulting people makes you look worse than Sony
Re: Poll: Did You Pre-Order a PS5 Pro?
@Frmknst 🙄
Re: Poll: Did You Pre-Order a PS5 Pro?
@Dom_31 what a crap comment.
So if someone doesn’t have physical games, wanted a other PlayStation 5 and has plenty of disposable income to make sure they have the best option to play now and in the future then we don’t have much “grey matter”
I’d argue that people that get online and tell people who make good money how to spend it are the ones lacking “grey matter”
Re: Capcom's Iconic PS1 Survival Horror Dino Crisis Coming to PS5, PS4
@Arnna are these not getting launched to purchase outside of ps+ premium?
Re: Reaction: Why There Are So Many Unnecessary PS5 Remasters for Games That Don't Need Them
It’ll keep happening - people buy them and it’s probably a pretty low risk endeavor for Sony.
I just hope they arnt pulling resources from development on new games for this. I can understand wanting to have everything updated and running well but not at the expense of new product.
Re: Dragon Age: Inquisition Massively Oversold Projections, Remains BioWare's Biggest Game
I loved Dragon Age Inquisition. I had taken a 10 year hiatus from games until like 2018 so I missed the discourse on it and played it years after release.
Never understood the negative reception or reaction to it. Sometimes I think people just dogpile stuff because it’s popular.
Re: PS5 Pro Shows Real Promise in First Expert Analysis
If you live outside of the US this comment doesn’t apply to you as I think you are justified in complaining about the price point.
If you live in the US then I have no idea why you’re complaining about $700. People saying they should include stuff in an OPTIONAL upgrade. Sony isn’t going to sell these at a loss. The base PS5 is there for that - they can and should make money on a niche product like this. If you think the price point doesn’t justify the upgrade - great don’t buy it! It’s just like people not wanting to buy a Cadillac and getting a Chevy.
All the sudden everyone is up in arms about a disk drive? 85% of the games sold on the platform are digital. The stand is annoying but it’s only if you want to stand it vertically.
I’ve seen people saying it should be $500 or $600 with a disk drive. You can’t buy a decent computer with the PS5 specs for $500 or $600.
This is the same group of people that complained about $70 price of games…games sales haven’t slowed. The same group of people saying the portal was over priced (sold like hotcakes).
This thing is going to sell out…and if it doesn’t they’ll lower the price and (shock) still have margin built in so they don’t lose their ass on it.
I don’t plan on buying one of these…the people complaining about it are coming off as entitled babies. Companies don’t stay in business on tight margins and losing money on products. It’s how the world works…
Re: The Game Awards Host Geoff Keighley and Parody Site Hard Drive Are Beefing
@Sequel they’d lose money on that. That would be corporate suicide. 3 years of premium?? That’s $400 + alone. With all due respect that’s insane.
Also 80%+ game sales are digital now. You may never see a disk drive on a console ever again.
Let the best analyst win? Seems like one of us is in touch with reality the other just wants free stuff.
Re: The Game Awards Host Geoff Keighley and Parody Site Hard Drive Are Beefing
@Sequel ok - well I’m an actual business analyst and executive at a large company.
1. PlayStation overall won’t “fail” without your suggestions
2. They priced this thing to make money. It’s not the base model. They are capitalizing on people that are willing to shell out $700 for an upgrade. They’ll manufacture the product and sell quite a bit at $700. They likely worked in plenty of margin in the event that it doesn’t sell well.
Starting at $700 with good margin to test the market is the smart business thing to do. That way they can later drop price to $650 or so and still make margin. If they start at $650 or as many people demand $500 they have nowhere to go and could end up losing a ton on the product.
This isn’t the base model “lose money to make money on software”. They have 0 incentive to not maximize profits on this console.
Re: The Game Awards Host Geoff Keighley and Parody Site Hard Drive Are Beefing
@Sequel saved them from what?
I’m not defending Sony and the price point of the pro but the fact that Stands are flying off the shelf right now indicates that they don’t need saving…the Pro is going to sell well.
Re: Feature: PS5 Pro's Been Clowned on By the Entire Internet, and the Memes Will Make You Laugh
Would I ever buy a $200 version of a game that has a plastic statue with it? No - but some people do and that’s fine. Same goes for this - if you don’t like it don’t buy it and send a message to PlayStation that way - if you want one buy it and move on.
Those of you arguing online about this thing - take a step back and realize you are arguing and hurling insults over a freaking PlayStation…this life is short and getting angry over someone else’s opinion on a video game console is not worth it.
Remember guys we live in a world where people buy Cadillacs which are basically Chevys under the hood for a ton more money.
PlayStation is putting this out there because they can and it’ll sell fine. They don’t expect this to sell like crazy so they have to charge more for a premium product.
Re: Sly Cooper and the Thievius Raccoonus (PS2) - Charming PS2 Platformer Can Still Steal Our Hearts
I really tried to like Sly - played all three on vita a few years back and didn’t have fun with them at all. I appreciate others getting to experience this.
Not sure why but I really have a hard time enjoying much of anything from the PS2 generation that I’ve gone back to. Everything before and after are fine - it’s like a mental block or something.
Re: Iconic PSP Tactics RPG Jeanne d'Arc Has a Platinum on PS5, PS4
Don’t know if anyone else has had this but I was just able to pick it up for free without PS Plus Premium.
Just gave me the option through the app.
Hope it’s that way for others
Re: $70 Games Are Just a Phase, Believes Saber Interactive CEO
@IslandLogic I’m sorry but I call bs…
You’ve never gone out to eat and had terrible service? A waiter that won’t come take your order? Then had terrible food?
You’ve never dropped $30 on a movie night and the movie sucked?
The difference is if a game launches broken (which most don’t) you still have the $60 15 hour game…the other two examples your money and time are gone. Forever.
Even if you drop $60 on a game you don’t like you can sell it back and recoup something.
This is coming from someone that doesn’t buy games day one typically - but complaining about the prices of games is kinda nuts. In terms of value for time it’s still one of the best deals out there.
Re: $70 Games Are Just a Phase, Believes Saber Interactive CEO
@OctolingKing13 the counter argument there is at $60 - 15 hour game is $4 an hour of entertainment. $4 an hour for enjoyment is a pretty outstanding value proposition. Can’t get that anywhere else.
Can’t go to dinner for $60. Going to see a 90 min movie is $30 these days.
Re: Over Eight Million Helldivers 2 Players Recruited Since Last Month
I rarely buy games at launch and never really play any live service outside of FF14. I wanted to see what the fuss is about and started last week…I’ve never enjoyed an online game like this. I hope the content continues - excited to see how it evolves
Re: Reaction: The Problem with PlayStation Right Now
@Friendly What i think you are forgetting is that companies are around to make money. I dont understand your comment at the end - why would Sony willingly keep people around that they didnt need? Would you pay employees that are not producing?
London got closed because they didnt make money. Sony didnt get rid of individuals that were high performing. Layoffs suck - it hurts families but unfortunately its important for future health.
As much as I dont want to pull this card - I do this for a living. As much as the executives got Sony into this position - they are sitting on razer thin margins - every analyst agrees with that. Regardless of the margins your business runs on - you're not Sony. 6% EBIDTA can crash down to 0 quick in the event of rising cost. Inflation is more than 6% right now - its not healthy.
If I worked at Sony and I was busting my ass every day and I saw other employees not working very hard and getting paid and not producing anything profitable - thus putting more pressure on me - I'd be pissed. Money doesnt grow on trees and if a company wants to retain talent they have to trim the fat.
At 6% margin you have pissed off shareholders, you are not able to take loans out from the bank to grow, and you are one bad bet away from being in the red.
Re: Sony's London Studio, Media Molecule Were Reportedly 'Highest on the List' for Closure
@Dodoo as much as this all sucks - I think it will be good for the industry in the long run. Companies are realizing that they cant continue to put money into non-profitable / bloated games. They cant keep a bunch of people employed whenever they dont product things that sell.
Part of the issue with things not selling is that there is just too many games that get released. The flood of games makes it impossible for certain things to succeed. To me this looks like a major market correction - the execs made bad decisions and flew too close to the sun while throwing money at acquisition and hiring a ton of people. Cutting down on the extra fat isnt going to reduce the amount of revenue that comes into these companies - they'll be more profitable and hopefully keep talented people around. Less games is actually better for the industry - I think this will be good for everyone in the long run.
I could be wrong - but sometimes you have to take a few steps back and reevaluate in order to be successful.
Re: Reaction: The Problem with PlayStation Right Now
@Friendly agree or not - their profit margins were down 6% last year vs 2022 and a 6% current profit margin is a bad place to sit for a publicly traded company. Also keep in mind Sony has business segments outside of PlayStation. They are still a manufacturing company - not a services/ software company.
6% EBITDA, once again for a company that does any type of manufacturing is very slim. Common agreement in the financial world is 10% is considered healthy…sony fell below that in 2023. Not sure the nature of your company once again - but the situations are obviously different. Sony operating on a 3% margin like your company would be seen as catastrophic…my initial reaction to 3% at your company was wrong - don’t know the business but I assure you Sony is struggling at 6%.
Re: Reaction: The Problem with PlayStation Right Now
@Friendly wait - I might have misunderstood your comment. Do you guys manufacture anything or do you sell engineering services? If it’s the ladder then that makes sense as you have less overhead.
Sony manufactures products with fixed selling prices. If the price of super conductors or something they don’t have control goes up by 10-15% they could be screwed. You can’t live on 3% margins whenever you are buying components for manufacturing from somewhere else.
Also 6% margins for Sony is scary whenever they saw a 6% drop in EBITDA last year…another 6% drop…not good
Re: Reaction: The Problem with PlayStation Right Now
@Secryt the verge atricle lumped gamepass core subs in with standard gamepass subs. The real number is 25 million and has stagnated. Regardless of if it’s currently profitable it’s not sustainable.
$7 billion in top line sales isn’t enough to sustain the amount of development teams they have. Whenever they release a product they get no influx of capital because big releases don’t drive new subs. They’ve built themselves into a stagnant business model
Re: Reaction: The Problem with PlayStation Right Now
@Friendly if you work for a company operating on 3% EBITDA you need to find a new job. I’d be scared.
My company just went through a massive restructuring because we had a year of 5%. We are back up to 10-12% which is healthy for $500 million company. 3% margin is one bad decision away from bankruptcy…
Re: Reaction: The Problem with PlayStation Right Now
@itsfoz the math of gamepass doesn’t work man. 25,000,000 subs at $11 a month= gross profit to all Microsoft studios of $3.3 billion. Remove development costs and the cost to secure third party titles. Most of Xbox revenue comes from that.
God of war ragnarok alone brought in NET PROFIT of almost $1 billion.
God of War Ragnarok - a stand alone title was more profitable than gamepass. This is why Sony won’t go to day one subscription. It’ll never happen.
Re: EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs
@Tecinthebrain more profit before overhead. They are making more gross profit but their EBITDA numbers are down across the board - which is a better metric for business health and sustainability. Most are essentially down 6-7% year over year.
Re: EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs
@wiiware a little of both I’d say. If I were to bet three things are going to happen.
1. More layoffs and exploration of ways to cut costs through AI, asset flips, cutting content and a push back to the office for many dev teams that arnt.
2. More investment on known IP and games that are safe bets. More sequels to popular games, more licensed games and less innovation as publishers dont want to take risk.
3. Rising game prices and more micro transactions filling games to help recoup dev costs.
We are already seeing these trends - but it’ll get worse.
Re: EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs
@ATaco I don’t disagree at all. I hope I’m not coming off as defending corporate interests because I’m not at all. I’m personally pretty high up at a large company so just giving some business insight based on how many companies operate. It’s not good and unfortunately the games industry has become victim to this because people saw money was there.
It sucks…just trying to educate why this is happening right now.
Re: EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs
@Ken_Kaniff read my comments above. Most companies operating expenses are out of control. Over hired In 2020 and 2021 - inflation and cost of doing business is crushing. Gamers don’t want to spend more on games and the cost to make them is climbing. All of the major developers are seeing their EBIDTA numbers drop which indicates business health.
Can’t keep people around whenever they are working on stuff that won’t make a profit.
A average game has to sell north of 1.5 million copies to break even.
Things are going to get worse.
Re: EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs
@Deoxyr1bose I’m not saying the executives that made the decisions shouldn’t get canned. They probably should - their assessments of the situation was stupid.
Pay cuts don’t really do much though. Cutting 600+ employees plus benefits is probably saving EA around $60 million. Executive pay cuts can’t ever free up that much cash…
They SHOULD take one in order to keep their current employees from going nuts and they should spread some of the savings out to their employees that stay…but who knows if they actually will.
Not defending the corporations…just giving a peak into corporate workings.
Edited for spelling.
Re: EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs
@JSnow2 EA saw a -6.89% drop in EBITDA in 2023.
Sony saw a -6.77% drop in EBITDA in 2023.
Can’t expect companies to keep employees around when business health is declining…
Re: EA Cuts Roughly 700 Jobs in Another Round of Industry Layoffs
The issue is that post 2020 these companies - and many software companies outside of the games industry over hired. As companies look at the future forecasts they can’t keep people employed and working on projects that won’t be profitable.
The executives should have known 2020 and 2021 were anomalies - but it’s better for them to cut employee bloat now before they start to sink. People losing their jobs sucks but if you don’t want game prices to go up or an influx of crappy half baked products flooding the market this is probably good for the future health of the industry..
Re: Rumour: A PS5 Remake of Uncharted: Drake's Fortune Is Possibly on the Cards
@Steel76 I’m not defending what Sony - but unfortunately that’s not going to happen. It’s a business and they want to maximize profits. They got away from making those types of games because it wasn’t profitable. Those games don’t sell well and having people work on something that likely won’t make money isn’t a sustainable way to run a business.
It’s why Insomniac is essentially going to be a Marvel studio now - those games sell.
Once again - not defending what they are doing. I don’t like it..but it’s the reality of the situation.
Re: Rumour: A PS5 Remake of Uncharted: Drake's Fortune Is Possibly on the Cards
This is the result of rising game development costs. Less expensive to remake something, sells better because it’s a known commodity.
Too much risk with spending $100-200 million on a new IP. We saw what happened with Star Field and other new IPs that don’t sell as well. Spend less, quicker cycle, easy money.
It’s going to be licensed games, remakes, established IPs for a while with a few new ideas sprinkled in.
Re: People Are Beginning to Play Around with PS5's Remote Play Handheld
I always read all of the comments about remote play and input lag. I use a backbone and the PS remote play app and it usually works flawlessly. I’m not sure if I’m just lucky or if I am just an idiot when it comes to input lag and don’t notice it. I’m excited for this release. I’ll try to pick one up around Christmas
Re: This Android App Will Transform Your PS5, PS4 Remote Play Experience
@Grimwood I bet you’re a lot of fun at parties
Re: PS5 Scalpers Are Selling Systems for $1,500/£1,000 on eBay
@Exlee300p as a fellow conservative I kindly ask you to shut up dude. This has nothing to do with Liberals - stop pushing an agenda.
Re: Unofficial PS5 Faceplate Business Cancels Orders After Threat of Legal Action from Sony
@RedShirtRod Microsoft allowed that to happen because of 3 reasons - 1. Companies like mad cats entered an agreement with Microsoft to split profits. 2. Microsoft didn’t have a patent on the faceplate. 3. Mad Cats found a legal way around the Microsoft patent.
Re: Unofficial PS5 Faceplate Business Cancels Orders After Threat of Legal Action from Sony
@huyi It’s not greed - it’s protection. What obviously happened here is Sony enforced their cease and desist on imagery on the PS5 while they got their ducks in a row to protect a design patent on their faceplates. If Sony has a patent they need to enforce it - doesn’t matter if it’s a mega organization or a small company patent law is there to protect people and companies from counterfeiting. The company they shut down was likely doing something illegal - good on Sony for enforcing.