By Paul Tassi
www.forbes.com
The PS5 is a massive hit, limited only by Sony’s ability to produce more in a turbulent manufacturing economy. It is once again leading the sales race against Xbox for the second generation in a row, and by at least somewhat similar margins, according to estimates.
And yet all through this generation, there seems to be a narrative continuously taking shaping regarding PS5 and Sony’s attempt to squeeze consumers for extra cash. The word “greedy” has been thrown around a whole lot since the system launched, for a few different reasons, and we have another one this week.
It is, of course, somewhat redundant to call a megacorporation “greedy” when its purpose is to generate revenue. Sony is in practice probably no more or less greedy than hundreds of other companies attempting to extract as much profit from customers as possible. And yet once you get branded with something in the video game space, it tends to stick. Xbox got hit with the idea that the Xbox One was “underpowered” and that lasted essentially the entire generation. The Wii U was a “gimmick” and it was the worst hardware generation in modern Nintendo history.
Now, the “greed” narrative keeps getting brought up with Sony, and it feels like it’s sticking, warranted or not. But here are the main arguments, some of which are even annoying PS fans themselves, making this not an exclusively “console wars” debate.
There are of course counter-arguments about what Sony is doing here, defending their position. All the Microsoft comparisons may need to factor in that Sony, while a big company with a $100 billion market cap, is not Microsoft with its $2 trillion market cap, so they can afford to eat a lot more costs when Sony can’t.
For game pricing, there is the eternal debate that game prices have been locked at $60 for ages now, well past what inflation (even before this recent hyper-inflation spell) should have caused them to rise to already, and Sony’s move is logical. The counter-counter-argument there is that games have way, way more revenue streams than they used to from DLC to microtransactions, and the industry is bigger and more profitable than ever.
But the more these issues come up, the more Sony keeps making pricing and policy moves that seem designed to pad their pockets and the direct expense of their customers. When your product is in this much demand, you can do things like raise prices and still hit all your targets, but I do see a growing frustration among even Sony fans that things like this keep happening, and only exclusively within the PlayStation ecosystem, with Microsoft and Nintendo not taking similar action, whether that’s on console or game pricing. Sony’s goodwill may have a hard cap at some point here, and they should keep an eye on that.
Sony Needs To Watch The PS5 Narrative Taking Shape
Sony has started to be branded as "greedy" for a whole lot of PS5 actions they've taken since launch, including some recently.
www.forbes.com
The PS5 is a massive hit, limited only by Sony’s ability to produce more in a turbulent manufacturing economy. It is once again leading the sales race against Xbox for the second generation in a row, and by at least somewhat similar margins, according to estimates.
And yet all through this generation, there seems to be a narrative continuously taking shaping regarding PS5 and Sony’s attempt to squeeze consumers for extra cash. The word “greedy” has been thrown around a whole lot since the system launched, for a few different reasons, and we have another one this week.
It is, of course, somewhat redundant to call a megacorporation “greedy” when its purpose is to generate revenue. Sony is in practice probably no more or less greedy than hundreds of other companies attempting to extract as much profit from customers as possible. And yet once you get branded with something in the video game space, it tends to stick. Xbox got hit with the idea that the Xbox One was “underpowered” and that lasted essentially the entire generation. The Wii U was a “gimmick” and it was the worst hardware generation in modern Nintendo history.
Now, the “greed” narrative keeps getting brought up with Sony, and it feels like it’s sticking, warranted or not. But here are the main arguments, some of which are even annoying PS fans themselves, making this not an exclusively “console wars” debate.
- Sony just announced they are raising PS5 prices by about 10% in a whole lot of regions outside the US due to inflation and currency complications. Immediately, both Nintendo and Xbox, facing the same market conditions, have announced they will not raise prices on their own hardware.
- Sony has been the primary driving force behind trying to get the industry to accept an increase from $60 to $70 as the standard price for most new video games. This includes a huge range of games from ones that might be able to make that case (God of War) and ones that can’t (Godfall). Most recently, Sony attracted controversy for selling The Last of Us Part I remake for $70, a remake of a 9 year old game that has already been remastered once, and now this new version, at $70, costs more than the original ever did.
- Then there are just the non-stop comparisons to Microsoft, which has offered all its games on Xbox Game Pass “for free” right at launch as part of that service, while Sony has said that idea is financially untenable for them and their large scale AAA games, which remain sold separately for that new $70 price. And while Sony has started to release more games on PC, unlike Microsoft, they are attempting to sell the same game twice on different platforms, years later, rather than giving players a PC copy gratis at launch.
There are of course counter-arguments about what Sony is doing here, defending their position. All the Microsoft comparisons may need to factor in that Sony, while a big company with a $100 billion market cap, is not Microsoft with its $2 trillion market cap, so they can afford to eat a lot more costs when Sony can’t.
For game pricing, there is the eternal debate that game prices have been locked at $60 for ages now, well past what inflation (even before this recent hyper-inflation spell) should have caused them to rise to already, and Sony’s move is logical. The counter-counter-argument there is that games have way, way more revenue streams than they used to from DLC to microtransactions, and the industry is bigger and more profitable than ever.
But the more these issues come up, the more Sony keeps making pricing and policy moves that seem designed to pad their pockets and the direct expense of their customers. When your product is in this much demand, you can do things like raise prices and still hit all your targets, but I do see a growing frustration among even Sony fans that things like this keep happening, and only exclusively within the PlayStation ecosystem, with Microsoft and Nintendo not taking similar action, whether that’s on console or game pricing. Sony’s goodwill may have a hard cap at some point here, and they should keep an eye on that.
