Sony Should Focus on Internal Investment & Partnerships Over Acquisitions Ahead of Next PlayStation

“Charity begins at home.”

I believe Sony should focus mostly on this philosophy going into the next generation of consoles, rather than seeking growth through external acquisitions. There’s only so much funding to go around, and I’m betting those precious dollars are used for a combination of internal investment and partnerships with outside teams rather than outright buyouts of major studios.

I’ll now get into why this is such a hot topic, then outline each of my reasons.

Within a mostly innocuous report from the Wall Street Journal on the Japanese gaming giant’s decision to focus on gamers for its next PlayStation gaming console which means building out its portfolio of games (surprise!), the stand-out quote is how its main strategy is bolstering its lineup of games only available on Sony devices.

Then, local site Gematsu got in on the action as it translated a Nikkei report containing somewhat vague comments from Sony Interactive Entertainment President and CEO Jim Ryan about gaming content being of utmost importance and the company considering studio acquisitions as one of its strategies for this reason.

(I’ll note here that every major publisher, shoot every public company, has teams dedicated to merger and acquisition [M&A] research. There have been recent job postings from Sony seeking talent for its M&A team, though I’m not reading into this as much as others.)

Finally, PushSquare published a piece among other media sites on likely targets of Sony’s acquisition bucks. These and more sparked rampant speculation online as to which would be the best fits based on history and existing relationships. I’m here to say the ideal foundation going forward is not built on acquisitions, but rather more investment in what it does best. And that’s its current world class studios, upcoming hardware offerings and productive 3rd party partnerships.

The safer route is absolutely to spend its precious resources in its myriad of internal studios, which have produced modern classics such as The Last of Us by Naughty Dog and God of War from Santa Monica Studio, plus align itself with external companies through partnerships rather than outright acquisitions. The most notable recent example of such a fruitful team-up being Marvel’s Spider-Man from Insomniac Games, which passed a staggering 10 million copies mere months after release last September.

Similarly, I’ll go as far to say I’m not hoping for or betting on acquisitions of any major developers or self-publishers in the near term. This list includes Bungie, Insomniac Games, Kojima Productions and Remedy Entertainment. Rather, there’s a much higher likelihood of one *maybe* two smaller teams that aren’t as cost prohibitive. If forced to pick, my bet is Housemarque. Known for arcade type shoot-em-ups such as Resogun and Alienation, I think it’s really the only smaller team suited for purchase now based on its proclamation that its style of games purely aren’t selling well, plus its affinity for working with the PlayStation team in the past.

Why? Here we go.

1. Major acquisitions are costly, time-consuming and risky.

I get it. It’s fun to speculate. To dream up scenarios where a favorite game developer gets purchased by a platform of choice. It’s just, in reality, acquisitions are usually not ideal compared to partnerships and are a truly massive undertaking presenting a variety of risks.

Acquisitions aren’t just about a big company throwing money at a smaller one. Both parties must consent, really except in the case of ugly hostile takeovers which should absolutely not be a part of Sony’s strategy. It often happens when a company is in need of a financial injection, its growth prospects have depleted or, in extreme cases, bankruptcy is looming. It’s especially trickier the more closely held a company gets, which is the case with many of the private game studios. Even those with hundreds of employees. The decision lies in the hands of a select few, normally with both financial and emotional investment from years of independent operation.

Then there’s the topics of what kind of premium the target will squeeze out of the acquirer, how well do company cultures mesh plus the whole regulatory side, all of which make this process time-consuming and expensive. M&A activity is inherently risky, blending folks that haven’t worked directly together so there’s no guaranteeing the company works as well as a subsidiary. Or there might be layoffs that happen due to redundancies. What I’m getting at is these involve many other factors than merely dollars and cents.

Let’s take a couple examples. One public, one private.

A team like Remedy Entertainment is publicly-traded. The Finnish developer is valued around $115 million in market capitalization. Not a huge figure in the context of Sony’s war chest, though certainly not pocket change compared to other names in this conversation. Not to mention that comes before any sort of projects even starting. And it has investors already. Lots of them. It doesn’t need to be injected with cash, especially with a new game Control next month and a collaboration with South Korea’s Smilegate on its CrossFire franchise. Every indication is Remedy wants to be independent. Even when Microsoft was publishing games like Alan Wake and Quantum Break, it was on its own. Why would execs and investors change their mind now, unless Sony throws some exorbitant amount of dough at it?

Then, our private example is Insomniac Games. Run by industry vet Ted Price, it’s a natural name thrown around due to its history of producing games for PlayStation like the aforementioned Marvel’s Spider-Man. Insomniac is a heck of a studio, it’s been around for decades plus boasts a portfolio of Spyro the Dragon, Ratchet & Clank, Resistance and a personal favorite, 2014’s Sunset Overdrive. It’s also dabbling in virtual reality for the Oculus Rift. So, if it’s operated this long alongside PlayStation, why isn’t it a part of Sony? Exactly. As exhibited by its releases on Microsoft and Facebook (Oculus) platforms, Insomniac seems to value its creative independence above all else. And while we don’t know its valuation, to me this clearly shows its decision-makers haven’t seen a reason to become part of Sony Interactive Entertainment yet.

World class first party games are impossible without investing in internal teams before anything else. Instead of dropping $100 million or more on a Remedy or Insomniac, those funds can be funneled internally towards high quality projects for existing teams.

2. Investment in internal teams is a better use of cash.

At present, Sony Interactive Entertainment Worldwide Studios features a suite of more than a dozen teams. Guerilla Games. Naughty Dog. San Diego. Santa Monica. Media Molecule. Sucker Punch. And more, with a legit laundry list of projects under their belts that define what PlayStation is more than anything else. These will also be the main contributors to Sony’s launch lineup next generation when the (probably named) PlayStation 5 (likely) releases in late 2020.

This is a dazzling entourage of the most talented, prolific teams in all of gaming. They make games specifically for a single company’s platforms, PlayStation 4 and PlayStation VR presently. Which means they are experts. If the big focus is appealing to the hardcore audience, that means investing in the personnel that make up these excellent studios is of much more importance than trying to attract external talent. Not to mention, it’s more cost effective to retain individual team members at existing studios than to integrate entire teams.

Sony is known for its first party content. It’s why there are 96 million PlayStation 4 consoles shipped to date, not to mention the absurd numbers for prior generations where Sony has 5 of the top 10 best-selling pieces of hardware ever made. World class first party games are impossible without investing in internal teams before anything else. Instead of dropping $100 million or more on a Remedy or Insomniac, those funds can be funneled internally towards high quality projects for existing teams.

A preexisting agreement or relationship between a larger company and smaller development studio or self-publisher doesn’t necessarily precipitate a buyout, or even open the door to discussions on the possibility of one.

3. External partnerships are attractive for both parties.

When we talk partnerships in gaming, this includes stuff like marketing deals, exclusive content, pre-order bonuses and similar incentives to attract players towards one platform above another. As much as exclusives are not ideal, especially for those without multiple systems, it’s a reality.

The reason I think Sony should opt for partnerships over purchases is that from a corporate standpoint, these deals allow for the best of both worlds. Development teams benefit from the backing of a major console manufacturer, especially for advertising spend, while they also remain independent to pursue experimental projects or titles for multiple platforms.

Need a concrete example? Well, I already mentioned one in Insomniac Games. This time, I’d like to bring up Square Enix. I don’t hear anyone calling for Sony to scoop it up just because games like NieR: Automata or Final Fantasy VII Remake have an alignment with PlayStation as timed exclusives. A preexisting agreement or relationship between a larger company and a smaller development studio or self-publisher doesn’t necessarily precipitate a buyout, or even open the door to discussions on the possibility of one.

While a team like Remedy certainly has less output and lower valuation than Square, I view it similarly because of its standing as publicly-traded plus a history with manufacturers other than Sony. Then there’s the case of Kojima Productions. Game design legend Hideo Kojima had an infamous falling out with Konami a few years back, which led to him founding a private studio. When a company is used to being independent, or recently has become so, and it’s not facing financial instability, its asking price goes up plus the attractiveness of being owned by a parent company plummets.

4. Finally, hardware R&D will be the focus of Sony’s gaming budget.

While Sony’s gaming division now leads the overall firm in both sales and operating income, it’s just one of many considerations when budgets are drawn up. All signs point to it being the final year of the PlayStation 4’s life cycle. In the lead-up to a new generation, research and development costs naturally ramp up especially for a console targeting the “core” demographic of gamers, as illustrated above from executive comments. Design and construction aren’t cheap. Not to mention the massive marketing push that will take the better part of next year.

If Sony intends to put out a powerful console in late 2020 with a quality launch lineup, we’re talking a sizeable chunk of its budget dedicated to this endeavor. How much is leftover to use on merger activity? What’s the most effective way for it to balance hardware and software demands? My thought is that most of its budget must be allocated to its next PlayStation and a core offering of exclusive games, which leaves less for M&A prospects at the risk of being spread thin.

To wrap up this admittedly lengthy post, while I’d never entirely rule out the possibility of acquisitions, I think the contingent calling for Sony to dole out cash on multiple studios has unrealistic expectations. Namely because of where the firm is at in the console cycle. It already has so many talented studios in which it should invest to spur growth, then continue to reinforce its relationships with third parties. This is the ideal route to meet its goal of strengthening its software portfolio, plus has added benefits for external companies that have fought hard for self-sufficiency over the years.

It’s flashy to talk about studio acquisitions, almost casually tossing around names. And it’s certainly more boring to hope that a company stays consistent with its current strategy even when it’s doing quite well. In this case, I’m both hoping and betting that Sony keeps it boring like Proposition Joe said (The Wire hear me). Because its business ain’t broke, literally and figuratively, so it doesn’t need fixing.

Sources: Bloomberg, GamesPress, Gematsu, Kazuhiro Nog/AFP/Getty Images, NVIDIA, PushSquare, Road to VR, Sony Corp, Wall Street Journal.

-Dom

The Themes & Sounds of Funomena’s Luna Had Me Over the Moon

With its themes of togetherness, creation and rejuvenation commingled with brilliant sound design, Luna is a quick, impactful indie game that transitioned well to console play from its virtual reality roots.

(Plus, and I know you noticed, it gives me a great opportunity to use an amazing pun that I couldn’t if I didn’t enjoy it!)

Funomena, a team of 30 folks based in San Francisco led by noted indie talent Robin Hunicke, originally released the esoteric, interactive story Luna in 2017 on virtual reality and PC platforms. Today marks its PlayStation 4 and PlayStation VR debut, and it’s certainly worth trying. Likely via either medium, though this review is of the PS4 version.

It’s a game that’s relaxing without descending into boredom. Slight overtones of loneliness, albeit not dark, that transition into hopefulness. More an experience than a traditional video game. Which seems to be the exact intention. If someone is arguing whether games are art, Luna attempts to prove that no one should even be questioning it.

The tale centers on Bird, a little feathered friend that boasts a mighty song, trying to recover bits of the Moon by uplifting other critters. The other main character is Owl, ever foreboding and mysterious. Funomena’s presentation here is like a virtual picture book, with hand-crafted art and a soothing vocal narrator. The simple yet effective story is told through its environments and player interactions, with bits of narration interspersed that act more as guidance than exposition.

Luna packs a decent variety into its two to three hour playtime, as there are a handful of main “phases” that form its framework. Two of them revolve around light puzzle elements. One that’s semi-rhythmic in nature, as Bird sings to open nuts growing on a tree, while the other has the player forming constellations of different shapes or animals.

It’s necessary to complete these puzzles in order to open each of its level. What I like about the puzzles is they aren’t stagnant. They evolve each time, presenting slightly different challenges. One introduces a rotation element, the next takes away certain visual clues. It’s never too hard, and I appreciate the feeling of progression.

Speaking of its levels, they are mini-worlds each with a distinct animal inhabitant. And these are the true highlight of the game. Each of these spaces is effectively a dreary spot in need of enlightening, both literally and figuratively. Bird is fly enough to help! This is where player choice comes in, though there isn’t a strict set of goals or guidelines. It’s really a sort of free-flowing activity, which offers the player a chance to “cultivate” the scene with different plants, trees or flowers.

The player has to coax out each animal by planting those objects throughout this defined play space. Brighten it all up. Change the size. Sprinkle in color. As the player places trees or bushes, life awakens. Even though it’s simplistic and guided by context clues, it’s still satisfying. Plus, this allows for a level of creative expression. It’s especially fun to see one’s handiwork come to life in the background of the cut scene that ends each segment.

More an experience than a traditional video game. Which seems to be the exact intention. If someone is arguing whether games are art, Luna attempts to prove that no one should even be questioning it.

It’s almost a cliche these days to compare something to thatgamecompany’s Journey, though it’s natural here based on the team’s background of working on the 2012 independent classic. Luna dabbles in similar themes, as Bird tries to communicate using bits of song, though I’d actually align it more with recent titles like Fe and Gris from Zoink Games and Nomada Studio, respectively. Both of which I quite enjoyed, though this here is a much more swift adventure.

Sound plays a major role, especially in the puzzle areas. Since the player interacts with the game using a type of cursor controlled by the joystick, interacting with many of the game’s visual elements will spark a unique sound. Trying to connect a star chart to form a constellation? Guitar strings twang when the cursor crosses over any connections that already exist. It’s a subtle touch, and I found myself messing around to see how many different notes the team programmed.

Expanding on the game’s auditory direction, part of why it works so well is its free form design combined with a smooth, natural soundtrack from Grammy-nominated composer Austin Wintory (Journey, Abzu). His incorporation of chimes and piano chords amidst sounds of flowing water or ambient tones were great on console, and I’d imagine even better when immersed in VR.

The simple yet effective story is told through its environments and player interactions, with bits of narration interspersed that act more as guidance than exposition.

As much as I enjoyed Luna, I have to admit there were small moments of frustration. I think it’s equal parts the game’s fault and my own. Within the first space, as I was planting trees and changing their colors to my heart’s desire, I started to question how I was going to progress. The world seemed complete, or at least my version of it was, which meant I felt stuck. I rotated the camera, poked and prodded though couldn’t complete the instance. It wasn’t readily apparent that I had to keep adding flora until a visual cue popped up and I could conclude the level.

This is a case where the game’s abstract nature works against it. Especially for me, as I tend to be goal-oriented. Luna nudges in directions, lets the player create rather than enforcing strict guidelines. Which started as a confusion, then became much appreciated after I learned I had to form my own path. Perhaps this is the intent.

The other downside is that it ended way too abruptly! It’s not that I assume a game like this would be grandiose in its finale, it’s that I hoped it would be more interactive. Especially after giving the player tools throughout to express individuality. Just when I expected to create my digital masterpiece, Luna took the reigns and ended its story on its own terms. It’s not my ideal conclusion, though it certainly didn’t ruin the overall experience.

My thoughts on the ending are not too damning really, since the real treat is the time spent in the game’s melodic, inspiring world. The puzzles are never too difficult, and ultimately a means to open levels where the player is way more free to tinker. Nothing is overly complex, nor does it need to be.

Funomena achieves a status of interactive art with Luna, in multiple respects. It’s a visual story about unification, overcoming feelings of desertion or guilt and a sense that planting seeds can grow fruitful relationships. This all means that, in the time it takes to watch a film, I’d recommend instead taking a quick virtual trip over the Moon.

Title: Luna

Release Date: October 17, 2017 (VR), November 22, 2017 (PC), June 18, 2019 (PS4, PS VR)

Developer: Funomena

Publisher: Funomena

Platforms: Windows Mixed Reality, Oculus Rift, HTC Vive, PlayStation 4, PlayStation VR

Recommendation: If you made it this far, you already know I think it’s worth a shot! Really thinking that virtual reality version might be even better, too.

Sources: Funomena, Screenshots from PlayStation 4 Pro.

Disclaimer: Review code provided by Funomena.

-Dom

Days Gone Is Mostly Mediocre, Morbidly Mundane And Will Still Sell Better Than Many PS4 Exclusives

Disclaimer: This is not a review, as I have not completed the game yet. It’s a series of impressions and sales predictions. Minor spoilers follow.

I went into Days Gone, the latest in post-apocalyptic PlayStation 4 exclusives, mostly curious. Minimal expectations, hoping to be surprised. I’ve felt this way since Sony revealed it back during 2016, when it was featured prominently during its E3 stage show.

Turns out that the open world biker game did in fact surprise me. Just, not in a good way.

Made by Sony’s Bend Studio out of Bend, Oregon, a team known for the Syphon Filter series and handheld Uncharted titles, Days Gone checks all the boxes for features in a standard “AAA open world” game, though fails to deliver anything extraordinary with any one of them.

The third-person game opens on the semi-ridiculous premise that the protagonist, Deacon Saint John, leaves his wounded wife Sarah to fly away to a government camp while a mysterious outbreak occurs around him, to stay behind with his best bro Boozer. I appreciate the “no man left behind” mentality, though couldn’t help feel both contempt and indifference towards Deacon after seeing him abandon his helpless lover. A main character doesn’t have to be likeable (see: Joel from The Last of Us, Nico Bellic from Grand Theft Auto IV), though I should at least give a damn about him.

Fast forward a couple years, the Pacific Northwest setting is overrun by infected (I refuse to call them Freakers and I’m mad that I just did), scumbags, settlers, wildlife and “drifters” like Deacon, who considers himself honorable because of an ambiguous code which I gather is mostly that he doesn’t kill women. Unless he has to, of course.

What follows is a classic example of bloated modern game design, flooding the player with crafting, skills and systems to satisfy the endorphin rush of seeing an experience bar increase or watching numbers go up.

Within the first half hour, I was forced to smash infected children (who Deacon specifically said would mind their own business if I left them alone), because they were in my way to an objective. The game said I could avoid them then put them right in my path, overwhelming me with enemies. In fact, main missions so far have been overly restrictive to the point of “Leaving Area” signals alerting you incessantly if you stray too far.

Movement is rigid, which means Deacon is occasionally difficult to control, especially when enemies are off-screen and the camera can’t quite catch up to controller inputs.

Driving the bike is mostly competent, though the gas mileage is unforgiving early on. Who wants to stop constantly in a video game to fill up their virtual gas tank, when we do that enough as it is in real life?

Thing is, I’d be mostly forgiving of flaws if the actual content was fun. Turns out, there’s not much to it outside of the campaign. See that infected nest? Throw a molotov cocktail into it. See that outpost? Murder everyone. See that government checkpoint? Cut down the speakers, fill the generator with gas and open its doors. Then do it again. And again. Until you find another one, where you can do it all over again.


Then there’s the camp system. One of the early camps is run by a freedom fighting gun nut, whose worst offense is that he feeds obnoxious radio blasts into your ear. Which you can thankfully skip.

It’s the other camp that bothers me. It’s run by effectively a slaver operating a “labor camp.” You’d think Deacon would want to capture this camp and free its prisoners, based on his apparent moral compass, but I don’t think the game allows for that decision. You can, however, gain access to new guns when you help its leader by doing jobs or sending random survivors to work in the digging fields. And from what I can tell, there’s no consequence of choosing to work with one group over another. So morality be damned, in the name of sweet guns and bike upgrades!

I haven’t even mentioned the technical issues I’ve faced or heard from impressions online. From enemies disappearing, characters and the bike getting stuck on geometry or falling through the world, slow loading times and severe audio glitches, it’s not deal-breaking though can be annoying when considering the game’s other flaws. (Fingers crossed for more patches, since the game was already updated multiple times in classic day-one tradition.)

I’d be remiss to mention that there are certain aspects I’m enjoying, or at least aren’t interfering with my progress. It isn’t all negative, I want to make this absolutely clear.

It’s mostly stunning when it comes to visuals and art design. The setting is picturesque, and the attention to detail in parts of the world is exceptional. The artists and animators at Bend did a heck of a job. Tire treads kick up mud with a slogging sound. Light shines through tree branches before glinting off water. A foreboding sky reveals infinite stars as dusk approaches. For a dreary game, it can be remarkably majestic.

The infected horde tech is impressive, showing dozens upon dozens of distinct enemy bodies all at once that flow together like rainwater down a drainpipe. Bike customization is cool, though I wish there were more stimulating visual options. There’s a good variety of weaponry, throwables and traps for your forays into the wilderness, and shooting is competent enough. Crossbow bolts that cause enemies to turn on one another is an especially fun toy.

Survival elements aren’t overly difficult or constrictive, though it involves searching. A lot of searching. And holding down the search button. Which can break up the pacing of the game, especially when running low on materials. This was one of the main critiques of Red Dead Redemption 2, and it’s just as bad here.

Excitingly, I finally hit a narrative beat that opened up a level of intrigue. Enough so that I will be playing more to see where it goes and if the game can change my mind at all.

Here’s the thing. I’m fine being an outlier when it comes to my tastes or experiences. This time, I’m far from the only one who feels this way. Consensus on review aggregator OpenCritic is sitting at “Fair,” with less than half of the 90 critics recommending it.

One particular piece that expresses my overall hesitation is authored by Patrick Klepek at Waypoint. He writes:


Days Gone refuses to settle on what it wants to be or what it wants to say. Rather than settling on a direction, it proceeds in all directions, hoping a more-is-better philosophy will prove blinding. This is true of both the clumsy mechanics, which are ever present and impossible to ignore, and its story, following the boring moral compass of biker Deacon St. John, who roams the world in the years after an event turned the whole world to shit, claiming to operate by a “code” but refusing to allow said code to operationally manifest into action.

Marvel’s Spider-Man is currently the fastest-selling PS4 exclusive.

Mine and Patrick’s thoughts aside, where does this leave us in terms of commercial potential?

I’ve joked about it in the past, and said that I started tepid on its sales prospects. The irony is that, despite my impressions and the average critical assessments, I now actually think it will sell relatively well. Better than many games exclusive to the platform, if not becoming one of the three fastest-selling to date.

This distinction currently belongs to 2018’s Marvel’s Spider-Man and God of War, which sold 3.3 million and 3.1 million units respectively during their first three days on market. These are excellent figures, though I wrote last year that I expected a licensed property like Spidey to perform that way.

Next up, Uncharted 4: A Thief’s End moved 2.7 million units in a single week during 2016. Ever so slightly behind that was 2017’s Horizon: Zero Dawn at 2.6 million copies, though it was across two weeks.

Right about here is where I expect Days Gone to settle at launch. Between 2.5 and 3 million units, within say the next two weeks. Which means it will beat out games like Killzone Shadow Fall (2013), Bloodborne (2015), Detroit: Become Human (2017) and Nioh (2017), which all saw a million units near launch except for Killzone, which hit 2.1 million within a couple months on sale. (Detroit and Nioh are no longer platform exclusive, though were near launch.)

Sony has intensified its marketing push lately, not just in retail but also online and traditional media. Big networks like ESPN have been steadily running promos. Plus if there’s one thing that people like these days, it’s post apocalypses and zombies. Early rumblings are positive in terms of shipments from Sony, according to my bud Benji. And I expect demand especially from casual buyers will be enough to purchase most of those inventories going to retailers.

Similarly, I predict it will be the best-selling game of April in the United States, when NPD Group reports sales results next month.

After this mostly successful launch, how will it sell longer term? I can see it maybe settling right at the bottom of 2019’s Top 10 sellers, though as an exclusive it’s already at a disadvantage compared with multi-platform titles. The more titles hit release dates in this year, the tougher it gets. Lifetime units sales of 7-8 million is feasible, especially as the console’s user base approaches 100 million.

It’s always a question if single-player games can maintain strong momentum over time. At least out of the gate, I think Days Gone is more likely to.. accelerate to success than not.

All this said, should you play it? (I know many of you will, just look at my sales prediction.) Well, depends on what you like. The ultimate problem with Days Gone is that it tries to do so many things, then loses any semblance of focus. Maybe it suffered from feature creep, trying to do much more than originally intended. Or it bolted on too much close to launch. Perhaps a lack of decisive leadership during its earlier stages. What’s clear is there are other games that do these things, and do them very well, that I’d rather play.

Do you like a massive, beautiful world to explore? Play Red Dead Redemption 2.

Want stealth action and engaging character arcs? Assassin’s Creed Odyssey.

Like storming enemy encampments and taking over areas? Pick a Far Cry.

Zombies and crafting with a dynamic night-and-day cycle? Dying Light.

A sprawling world with expertly-written side quests? The Witcher 3.

Ranged combat encounters with unique enemies? Horizon: Zero Dawn.

Cinematic narrative in a post-apocalypse: The Last of Us. (Seriously if you haven’t played it, you should be doing so instead of reading this.)

Technical hiccups, repetitive side content, stiff movement, serviceable shooting, laughable enemy AI plus lots and lots of rifling through cars or houses to find crafting materials? Which are used to get caught in a tailspin of monotonous gameplay loops which serve only to make experience bars fill up, all the while questioning why you should empathize with its characters?

Shoot. Then I’d still probably play something else.

Sources: Sony Interactive Entertainment. Internet Games Database. Bend Studio. Quantic Dream. Insomniac Games. Team Ninja. From Software. Waypoint. Open Critic. Benji-Sales.

-Dom

Sony Reveals Record Gaming Sales But No New PlayStation Release Just Yet

If we learned anything from Sony Corp $SNE earlier today, it’s that it isn’t playing around when it comes to games.

The Japanese megacorp released its 2018 results, where it revealed solid overall stats and especially positive numbers within its Gaming & Network Services (G&NS) division. This includes PlayStation, downloads and related services i.e. PlayStation Plus.

Its PlayStation 4 console, released way back in 2013, has eclipsed 96.8 million in lifetime units shipped. It’s the 6th best-selling gaming platform ever, approaching the 101.63 million of the mighty popular Nintendo Wii. (Yes, the one that your grandparents even bought. To play virtual bowling.)

Quick rundown is that Sony’s total sales moved up slightly to $78 billion, while operating profit boosted 22% to over $8 billion. Sales for the final quarter came in above analyst forecast, while full-year outpaced Sony’s internal guidance.

Chart above focuses in on the gaming division, which generated a whopping $20.8 billion in sales and an increase of 75% in operating profit. This shows growth over time, using quarterly metrics, to put this record result in context.

A decline in hardware sales for the aging PlayStation 4 was offset by growth in software and subscription revenue, as PlayStation Plus members rose 6% to 36.4 million. You’ll see above that this is the best result for the “Network Services” part of this business unit, and that software is still as healthy as it’s ever been. Popular catalog titles like God of War and Marvel’s Spider-Man seem to be maintaining momentum, however Sony did not share updated individual stats on its major games.

On the hardware side, PS4 shipments were lower than the prior year however this was expected as we come up on next generation. The 17.8 million units came in above the firm’s estimate, and is helping to drive toward the lifetime 100 million threshold as mentioned before.

However, there’s an important flip side to the stellar numbers that causes me to have some hesitation for its short term prospects. (Despite remaining way optimistic longer term.)

While Sony tends to provide conservative forward-looking guidance, it’s especially the case this time. Even more so than expected, given how late in the console cycle its PlayStation business is plus unevenness in other units such as Xperia mobile phones. Operating income is expected to decline to $7.3 billion, on a 10% reduction in gaming profits. According to Bloomberg, this is below analyst consensus.

Even further, as reported by the Wall Street Journal, executives stated definitively that there will be no new PlayStation hardware released until at least a year from now. Effectively, it will go the entire next fiscal year without a new console. While it’s still projecting modest PlayStation 4 units, 16 million to be exact, this revelation along with weaker-than-expected financial forecasts and uncertainty with its games software lineup, is why I’m tepid on Sony’s short-term prospects.

It does have major games in the pipeline, including The Last of Us: Part II from Naughty Dog, Death Stranding from Hideo Kojima’s new studio and Ghost of Tsushima from Sucker Punch. Though we don’t know when any of these will be out. There’s even the possibility that one or more will be saved for next generation’s launch later in 2020. Combine this with no new console, it’s clear why Sony is being conservative.

Ultimately, while I applaud the absolutely stellar results, I’m somewhat hesitant shorter term. I don’t believe it can meet its gaming unit forecast without at least two of the three aforementioned titles, as the boost from the usual multi-platform games will exist regardless.

Thus, what will be the driving factor without new hardware or multiple flagship games? Which of its major titles will release in the next year? Upside is that we’ll know soon, one way or another.

Sources: Sony Investor Relations. Wall Street Journal. Bloomberg.

-Dom

Companies of E3: Sony PlayStation Media Showcase

 

It’s Monday night. E3 proper is set to begin tomorrow morning in Los Angeles. However, right now, it’s all about Sony Corp $SNE and its PlayStation Media Showcase. The current console market leader is known for having lots and lots of games in its shows, with little regard for release window of said games, and tonight’s show was no different.

 

Was a decent show, with highs and lows, but overall I definitely think you’ll be able to find a game that appeals to you on this list. Below are those featured at the media showcase, including details on my most-anticipated game.. Destiny 2!

 

 

Grand Turismo Sport: During Sony’s pre-show, it revealed that the latest installment in the GT racing franchise is out this fall.

 

 

Knack 2: Yes. Sony is actually releasing a sequel to the launch game that turned into an ongoing internet joke and meme. And it’s out September 5th. Honestly, it looks MUCH improved!

 

 

PlayLink for PS4 collection: Two games in this collection were announced: Hidden Agenda, where you use a smart phone as a controller, and That’s You, which looks like a social party game.

 

 

Matterfall: Housemarq indie game, releasing on August 15th.

 

 

Everybody’s Golf: Arcade golf game.

 

 

PlayStation VR Games: Super Hot, Summer 2017. Sparc. Tropico. Elder Scrolls V: Skyrim. Star Child by Playful and published by GameTrust. The Inpatient. Final Fantasy XV fishing. Bravo Team. Moss.

 

 

Undertale: Popular indie PC hit coming to PS4 this summer.

 

 

Ni No Kuni II: Japanese RPG by Bandai Namco now has a release date of November 10th.

 

 

Uncharted The Lost Legacy: This standalone story in the Uncharted series started the show proper with a new trailer, it’s out August 22nd.

 

 

Horizon The Frozen Wilds: Summer 2017 for the first expansion of Guerilla Games’ excellent open world game that released in February.

 

 

Days Gone: We see more from this post-apocalyptic zombie game from Sony Bend where you fight hordes of undead and survivors. Never seen that before. (Sorry, it’s just not doing it for me. I’d rather play The Last of Us.)

 

 

Monster Hunter World: We heard rumblings of this title recently, looks like Capcom is finally officially bringing its beloved franchise to PS4 and Xbox One in the form of an open world game this time. Out in early 2018.

 

 

Shadow of the Colossus: Early 2018. Looks like an HD remake of the 2005 game from Team Ico.

 

 

Marvel vs. Capcom: Infinite: Out September 19th, story demo is actually available today.

 

 

Call of Duty WWII: This game again looks like a Call of Duty game set in World War II. And it’s out in early November.

 

 

God of War: I admit, every time I see this new God of War game, I care more about playing it despite not playing any of the earlier games. Releasing early 2018. No exact release date.

 

 

Detroit: Become Human: Quantic Dream’s futuristic, narrative adventure game featuring androids in an uprising looks very intriguing again as it did last year. Though, no release window revealed.

 

 

Destiny 2: Finally! My favorite franchise of this generation is getting a sequel, and Sony has a marketing deal with Activision/Bungie so (better or worse) it has access to exclusive content: missions and gear, plus a multiplayer map. But the good news is that the release date is now moved up to Wednesday, September 6th on consoles. And October 24th on PC. Bungie will host a beta testing period that begins on July 19th on PS4 and July 19th on Xbox One (for those that pre-ordered) and then July 21st for everyone.

 

Can you tell I’m excited?

 

 

Spider-Man: Insomniac’s take on the  Marvel superhero franchise is out next year. I know lots are excited for it!

 

What It Didn’t Show (Yet): The Last of Us 2, which feels odd because it’s the biggest game Sony has. But it’s also nowhere near done and I guess not ready to show just yet. Media Molecule’s Dreams, Michel Ancel’s WiLD (especially now that he showed Beyond Good & Evil 2 at the Ubisoft show I wrote about earlier). Oh, and Bloodborne 2. I guess none of my long shots are panning out.

 

That’s okay, we still are seeing some really cool games! What did you think of Sony’s briefing? Will you be buying any of these games when they release? Why aren’t you as exicted about Destiny 2 as I am?!

 

Thanks for reading!

 

-Dom

Casual Friday: August 12th, 2016

No Man's Sky Art

It’s Lonely Out There For No Man’s Sky

I would be remiss to not start this week’s installment of Casual Friday without first mentioning the game that every tech nerd and casual gamer alike is talking about: Hello Games’ space exploration survival-epic No Man’s Sky. It launched this past Tuesday on Sony Corp (6758)’s PlayStation 4 (PS4), and on PC today, to a variety of opinions after a crazy amount of hype since its reveal back at the VGX Awards in 2013.

Now I’m no reviewer, but I admit I’ve been playing and generally enjoying my time in the vast universe of No Man’s Sky. It’s not a game for everyone, though. Which is why it’s suffered from mixed messaging about its nature as a single-player vs multi-player experience (apparently it’s only the former), Sony throwing huge marketing power behind it then not offering advanced review copies for media outlets, its full-price tag despite being a game developed by a smaller indie studio and many gamers expecting it to be the “only game you’ll ever buy again” based on its promise of offering the ability to explore a world with 18 quintillion planets filled with wildlife and resources galore.

Time will tell how successful it will be, both critically and financially. The initial indication is that reviews are skewing toward the negative, but so many people are playing it that I can’t help but think my sales estimate of 1.5 to 1.75 million units sold is ultimately attainable.

Xbox One

Xbox (Is Number) One!

It’s been a busy couple of weeks for Microsoft Corp (MSFT)’s Xbox business. Last week, the tech giant released a slimmer, updated version of its latest console dubbed the Xbox One S after cutting the price of its original Xbox One model to $249 (the console launched in 2013 at a cost twice that amount). It seems this aggressive price cut has impacted sales, as the Xbox One became the best-selling home console in the U.S. during July 2016 based on a report by the NPD Group. This is the first month that the Xbox One has led its major competitor, Sony’s PS4, since its win in October 2015 around the launch of Halo 5.

 

Sony Invite

PlayStation Meeting.. PS4 Neo Reveal?

Speaking of home consoles and updated versions, news dropped this week by way of VICE Gaming and Gameblog that Sony Corp is to reveal a new iteration of its industry-leading PS4 home console next month. The company has sent invitations to a PlayStation event taking place at its PlayStation Theater in New York City on September 7th. The project, nicknamed “Neo,” will be featured at this event and is expected to have upgraded specifications and enable 4K gaming.

Note there are 43.5 million PS4’s in the wild as of the end of this past June.

NVIDIA

NVIDIA Is Stackin’ Chips

Semiconductor manufacturer NVIDIA Corporation (NVDA) reported record quarterly sales of $1.43 billion this week, beating analyst expectations on a 9% jump since last quarter and 24% increase since last year. The firm, whose chips are widely used in gaming applications in addition to Artificial Intelligence and self-driving cars, showed profit growth of 29% since last quarter and triple-digits since last year! Gaming makes up a little more than half of its overall sales, and the company’s results were driven by its new “Pascal” chip series released this year as part of its future road map.

The company’s stock is the 2nd-best performing within the U.S. market benchmark S&P 500 index over the past year, growing 166% over this time frame as of last night’s price. Not a bad investment, I’d say!

 

DeNA

Nintendo LogoDeNA & Nintendo Sittin’ In A Tree..

Japanese mobile and social media company DeNA Co Ltd (2432) divulged some details of its partnership with Nintendo Co Ltd (7974) during the former’s earnings this week. DeNA said that mobile titles in Nintendo’s Animal Crossing and Fire Emblem game series are expected to release this upcoming fall, and that in total the firms have five different mobile games planned to release before May 2017 in hopes of creating medium-to-long term sustainable profits.

Nintendo will of course handle development and marketing of these games, while DeNA will handle infrastructure and back-end support services. Nintendo will cover all marketing costs. As a result, the firms will split revenue from these releases but we don’t know what the split will be just yet. DeNA expects contributions from this alliance during its 2016 fiscal year, which ends next May, so we can safely expect the same for Nintendo.

Alibaba

Alibaba vs SEC: Fight!

Lastly, yesterday Chinese e-commerce leader Alibaba Group (BABA) had its best quarterly sales growth since its public listing back in September 2014 on $4.84 billion in revenue and operating income of $1.3 billion. This resulted in its stock price soaring 7% in trading today, leading to a 20% increase year-to-date.

Still, there’s a dark cloud hanging over the company’s earnings in that the U.S. financial regulatory body the Securities and Exchange Commission (SEC) is investigating its accounting practices when it comes to reporting of one of its sales metrics, called Gross Merchandise Volume. Admittedly, I’m not quite sure exactly what this metric is, but Alibaba itself did not address the investigation so we’ll have to wait and see what the future holds.

Have a great weekend, folks!

-Dom