Sony president Hiroki Totoki officially begins his role as interim CEO of PlayStation. What are your expectations?

24 Jun 2022
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The cannibalization that you're referring to hasn't really manifested and there is no evidence to suggest it ever will.

xbox.jpg


The reality is that PC for them is very profitable

2023-05-24-image-37.jpg

Also: Revenue != Net Profits

ALSO Also: Going by that graphic, the average copy of Spiderman PC was selling for $34.66. Keep in mind, the game launched on PC for $60, so in just 4 months it was already selling for significantly under half the original Steam MSRP.

But PC gamers spend more, according to some 🤣
 
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FatKaz

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I honestly see Sony pumping the breaks on the PC ports now that Japanese leadership is back in charge. It was the western exec's that had that idea and now Jom Ryan and Shawn Layton (PC ports were his idea) are gone.
You should see what totoki said a month ago, he is the most supportive of multiplat push(specifically to pc and mobile)

Jim actually gave a bit of a nod to the 2 year gap between playstation and pc releases last year. Whilst totoki said he wants to be more aggressive.

People need to stop living in this fantasy that Japanese leadership would suddenly be better, when in fact right now it seems it will be worse.
 

RE4-City

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Its hard to say, Nintendo got an intern President after the surprise passing of Iwata (RIP) from 2015 to 2018. We do not know how long he will be in the position before he will be replaced. If he stays for 2 years I can just see him just approving things that have been working well since the PS5 launch. Maybe he could do something unexpected like completely drop support for PSVR 2 or maybe put 100% backing into it to compete more with oculus. I imagine he want to get someone new before the PS6 launch tho.
 

Yurinka

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2023-05-24-image-37.jpg

Also: Revenue != Net Profits

ALSO Also: Going by that graphic, the average copy of Spiderman PC was selling for $34.66. Keep in mind, the game launched on PC for $60, so in just 4 months it was already selling for significantly under half the original Steam MSRP.

But PC gamers spend more, according to some 🤣
You are wrong:

Since each port did cost them a around a couple millions that graph proves my point: their investment on PC has been very profitable, and as Totoki said this is the reason of why they'll double down aggresively on it to improve their profits.

And no, the $34.67 per copy (and all revenue number listed in that page) is what Steam pays to Sony after taking the refunds, chargebacks and their 30% cut. Since $35.67 is 70%, the 100% of the average amount of money paid for these copies of the first months of Spider-Man is $49.52/copy. The game wasn't discounted in that period, so the real number is $49.99 but the numbers don't exactly match because the 1.5M and $52M are rounded.

As we saw in the leaked Insomniac numbers, Sony also gets similar revenue per copy in the PS version of their games games. Because they don't have the 30% cut but have the costs from the retail copies (shipments, retailer cut, cost of components, etc).

image.png

Here their estimaed average revenue per copy for their PS versions:
Morales $25.49
SM remaster $12.5
Rift Apart $33.18
Spider-Man 2 $37.14
Spider-Man 3 $38.28
Wolverine $39

Its hard to say, Nintendo got an intern President after the surprise passing of Iwata (RIP) from 2015 to 2018. We do not know how long he will be in the position before he will be replaced. If he stays for 2 years I can just see him just approving things that have been working well since the PS5 launch. Maybe he could do something unexpected like completely drop support for PSVR 2 or maybe put 100% backing into it to compete more with oculus. I imagine he want to get someone new before the PS6 launch tho.
This case isn't by surprise, it's something planned since months before. He announced his retirement back in September, so they must have working on his replacement since -at least- then.

In case of SIE, after the 14 years of the original CEO Kutaragi, all Hirai, House and Ryan have been CEO during 5 years. With the exception of Kodera, who was CEO only during a couple years.

I assume Totoki will only be interim CEO during a very short period of time.
 
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TigerFang

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The reality is that PC for them is very profitable, and every year is generating them way more money than the previous ones. This fiscal year they should generate over half a billion from PC, more than originally estimated (more than the 50M they expected for he previous FY but got them this one due to the delays of Returnal and TLOUP1 PC ports).

Regarding new games under development, they keep progressing and get released normally, with as always great sales and critical recepttion. There are some delays and cancellations, which always happened in some companies. The difference is that now they work in way more games at the same time, which means there's also way more delays and cancellations.

Same goes with the layoffs: in the last year they fired like 1000+ people. But in the last 5 years (Jim Ryan) they hired or acquired minimum 4000-5000 people, plus they already had a lot before 2019. So they did cut some fat that it was a good moment to do so (other companies also doing it, hardware costs giving them an excuse, uncertainity in the global economy, growth in total gaming revenue being flat, post-covid etc).

Things are going well there, there's nothing to worry about. AAA games take longer to be made every generation, but they keep coming.


The Japanese interim CEO said they'll do the opposite, to double down in PC (as they already had planned, to continue with the ports of old games plus day one GaaS releases). Which is what it makes sense, because they need more profit in the short term and PC gives them that. Plus also an interim CEO -specially a Japanese one- won't make any important changes that were already planned way before.

Western SIE CEOs made a way better job than the Japanese SIE CEOs in terms of finances, userbase and market share. Same goes with the console performance in each market, performs way better in the west. Or the gamedev studios from each market, the western ones continue being the most successful ones. Same goes with the head of PS Studios, their games are way more successful and are more producive with Hermen than with the previous (Japanese) heads. Meaning, very likely the next permanent SIE CEO will be western again.
I agree with you, I knew that pretty much all the studios doubled and tripled in headcount, and I understand that as hardware gets more powerful, the budgets increase and the development time increases to take advantage of the hardware.

But I didn't know about that much revenue being generated from PC..? their most hyped games reach 1-3 million sales predicted on steam. While Returnal is predicted at around 130k~. All this while steam also gets a 30% cut.

How are they generating that much on PC Like you're saying?
 

JAHGamer

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A lot of fake news in this thread. Jim was trash, this guy will be even worse.

I honestly see Sony pumping the breaks on the PC ports now that Japanese leadership is back in charge. It was the western exec's that had that idea and now Jom Ryan and Shawn Layton (PC ports were his idea) are gone.
Nope, this bum Totoki knows literally nothing about gaming. He probably is gonna see if he can port anything to mobile.
 
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You are wrong:

Since each port did cost them a around a couple millions that graph proves my point: their investment on PC has been very profitable, and as Totoki said this is the reason of why they'll double down aggresively on it to improve their profits.

You keep saying "very profitable", when SIE don't disclose their actual profits from the PC ports in isolation. So how would you know they're "very profitable" versus "decently profitable" versus "not very profitable"?

The answer is you don't, and insisting over and over that it's "very profitable" doesn't actually mean that is the reality. All we have are the revenue figures, and we also know the cost for ports can go up to $30+ million else that would not have been a cutoff specified by Jim Ryan for further clearance of ports.

And no, the $34.67 per copy (and all revenue number listed in that page) is what Steam pays to Sony after taking the refunds, chargebacks and their 30% cut. Since $35.67 is 70%, the 100% of the average amount of money paid for these copies of the first months of Spider-Man is $49.52/copy. The game wasn't discounted in that period, so the real number is $49.99 but the numbers don't exactly match because the 1.5M and $52M are rounded.

Doesn't Steam lower their cut to 20% after a certain sales threshold is met? Haven't you in the past suggested that Sony has a specific arrangement with Valve so they get more of the revenue for games sold on Steam? So which is the truth?

As we saw in the leaked Insomniac numbers, Sony also gets similar revenue per copy in the PS version of their games games. Because they don't have the 30% cut but have the costs from the retail copies (shipments, retailer cut, cost of components, etc).

image.png

Here their estimaed average revenue per copy for their PS versions:
Morales $25.49
SM remaster $12.5
Rift Apart $33.18
Spider-Man 2 $37.14
Spider-Man 3 $38.28
Wolverine $39

You'll need more context for this graph because you've also incorrectly insisted that Rift Apart was not profitable until the PC port, a point discredited by numerous people multiple times. We also know, again using Rift Apart here, that this chart is older than others in that hack/leak, because the Rift Apart figures are almost 2 million below where they actually were before the PC port released.

Also keep in mind, figures like those for Wolverine are conservative estimates, because the game hasn't actually released yet. We also know that ALL of the numbers in this graph are conservative estimates, not the actual sales totals or revenue amounts (at least for Spiderman 2, Wolverine, and Spiderman 3) because the date cutoff for this graph's data is probably sometime mid-late 2022, or late 2022 at the absolute latest.
 

mibu no ookami

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I was referring to a specific portion of the comment about their first party output being worthless specifically PS3 era. A discussion can be had about the PS1 and to a point the PS2 since first party studio portfolios in general were smaller back then overall and they had no need to secure up all these studios given how different the industry was and the fact they were still relatively new with everyone already giving them exclusives. God of War and GT were not their only success PS2 generation though, again you are revising history a little but whatever floats boats here.

You're moving the goalposts. First party studio portfolios were smaller then? Not Nintendo or Sega's.

The point that you're ignoring is that Sony's ps5 output to date is greater than what Sony has ever done to this point in any generation, especially the PS2.


However The PS3 was being carried by Sony's internal IP's from the very first day, yes you can nit pick and say some of the studios weren't technically first party yet but those studios were only making Playstation games.

That isn't nitpicking. People aren't crediting 2nd party games for Sony this year why should we count them from the ps3?

The irony here is y you failed at basic comprehension because my comment literally stated I was speaking about Totoki.

Sony's stock could surpass Apple's tomorrow and that wouldn't change a thing about the current state of PlayStation and the fact Jim and Hermen has left Playsyation Studios weakened and in development hell. And now we have a penny pinching accountant who sees gaming as a thorn in his side taking over along with the prime CEO of SONY stating gaming is niche, while they continuously depend on PlayStation to subsidize their other departments.

You were the one that brought up stakeholders...

Totoki is a financial guy, that doesn't mean he hates PlayStation, but that's how someone who doesn't understand business sees things.

A brand being watered down while the stocks rises and gamers gets less information from the company about their future pipeline, but every 3 months a PC game is announced... Bless the stock market, if only we could play it,

Old games being released on PC somehow is watering down a brand... that's very interesting.

Sony is handling marketing differently these days, that doesn't mean there isn't anything in the pipeline.
 
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mibu no ookami

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Where are the PC game sales for Microsoft games to suggest a shift from Xbox console gaming to PC gaming?



2023-05-24-image-37.jpg

Also: Revenue != Net Profits

ALSO Also: Going by that graphic, the average copy of Spiderman PC was selling for $34.66. Keep in mind, the game launched on PC for $60, so in just 4 months it was already selling for significantly under half the original Steam MSRP.

But PC gamers spend more, according to some 🤣

Where are you getting 4 months from? August 2022 to March 2023 is 7 months.

Who said PC gamers spend more? If you look at the price history of Spider-Man on PC, you'll see that it has never been under 35.99 USD in the US, but it's been significantly cheaper in other regions. That's what PC gaming is. It's a discount parade, particularly across regions.

That being said, a game can generate millions of dollars relatively easily due to the userbase. If you sell 2 million copies at 5 dollars a piece, it's 10 million in revenue. You're looking at at least 7 million in net. PC games have a very long life, but for some reason people are determined to compare them directly to console sales that generally sell closest to launch.

Compare the price of the Witcher 3 on PC to Spider-Man. The Witcher 3 has been as low as 8 USD and significantly lower in other regions, under 2 dollars in India for example.

So why not sell every game for 10 dollars? Because it's still selling units at 35 (US) and that's obviously a better margin, but as time goes on and with more transmedia, that game will continue to sell more and more. It bumped up when Spider-Man 2 released, it'll bump up again whenever a new Spider-man property is released in theaters or on tv.
 
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mibu no ookami

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You keep saying "very profitable", when SIE don't disclose their actual profits from the PC ports in isolation. So how would you know they're "very profitable" versus "decently profitable" versus "not very profitable"?

The answer is you don't, and insisting over and over that it's "very profitable" doesn't actually mean that is the reality. All we have are the revenue figures, and we also know the cost for ports can go up to $30+ million else that would not have been a cutoff specified by Jim Ryan for further clearance of ports.

Which port costs 30+ million dollars?
 

Yurinka

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You keep saying "very profitable", when SIE don't disclose their actual profits from the PC ports in isolation. So how would you know they're "very profitable" versus "decently profitable" versus "not very profitable"?

The answer is you don't, and insisting over and over that it's "very profitable" doesn't actually mean that is the reality. All we have are the revenue figures, and we also know the cost for ports can go up to $30+ million else that would not have been a cutoff specified by Jim Ryan for further clearance of ports.

We know their costs (aprox. a couple million per port, not 30M) and their revenues, so we know their (aprox.) profits. That's a fact. We also see in the graph they have a huge yearly growth.

In several cases cases we have even the exact cost of the PC ports (around 2M) and their revenue during a few early months or years, and have an insane ROI. That's another fact.

Plus the interim CEO stated it, and that they plan to double down in PC to improve their profitability. They wouldn't do if PC would be an unprofitable market. That's another fact.

So all the related facts we have tell us they are very profitable, have a great ROI which is way higher than with new games.

There isn't any fact that shows them as "decently profitable" or "not very profitable".

Doesn't Steam lower their cut to 20% after a certain sales threshold is met? Haven't you in the past suggested that Sony has a specific arrangement with Valve so they get more of the revenue for games sold on Steam? So which is the truth?
Yes, we say 30% cut to speak quickly.

Since 2018 it's 30% for until the game makes $10M for the publisher. In the portion that goes from $10M to 50M it's 25%. And when the publisher has made over 50M, then it's 20%.

Not just for Sony, but for everyone in Steam. In the case of mobile and consoles, there are a few cases where the few top publishers secretly have a better deal than the normal cut they have for everyone else.

So pretty likely the same applies for Steam.

You'll need more context for this graph because you've also incorrectly insisted that Rift Apart was not profitable until the PC port, a point discredited by numerous people multiple times. We also know, again using Rift Apart here, that this chart is older than others in that hack/leak, because the Rift Apart figures are almost 2 million below where they actually were before the PC port released.

Also keep in mind, figures like those for Wolverine are conservative estimates, because the game hasn't actually released yet. We also know that ALL of the numbers in this graph are conservative estimates, not the actual sales totals or revenue amounts (at least for Spiderman 2, Wolverine, and Spiderman 3) because the date cutoff for this graph's data is probably sometime mid-late 2022, or late 2022 at the absolute latest.
The data you say "discredits me" (not me, but the leaked slide posted above) was another one found later and apparently made later, I may be wrong but I think it was from shortly after HFW was included in PS+, shown in a table with estimates in a document that was about making estimates on the impact of including a game in PS+, particularly making projections about what HFW was going to have.

A document I assume that thanks to this document about estimates they tought it wasn't a good idea to include Ratched in PS+ as quick as HFW did and instead prefered to wait some time more.

Which port costs 30+ million dollars?
As far as we know, no PC por costed 30M. The Sony PC ports budgets we know are somewhere around 1.5M and 3.5M aprox, around 2M.

In the table posted above we saw the cost of the Spider-Man Remaster did cost $39M. The remaster, not the PC port. And this is with Insomniac doing it, who with their prestige and in Californa have much higher salaries than an European porting studio.
 
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Kokoloko

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The poor takes I'm seeing here are super disappointing. Thought there would be better analysis here.

Sony is in their strongest position in gaming since the early 2000s. They've made several investments to ensure that position improves over the next 5-10 years.

Jim Ryan has left PlayStation considerably stronger than any other executive has and that's simply undeniable.

  • Has entered into higher margin businesses that can bring in revenue AND operating income at times when new games are not be released
    • PlayStation Productions
    • Audeze
    • PC Game ports
    • GaaS
  • Has rapidly expanded the size and scope of PlayStation Studios and SIE
    • Haven, Bluepoint, Housemarque, Insomniac, Bungie, Nixxes, Firewalk, Firesprite, Valkyrie, e.t.c.
  • Successfully navigated the pandemic
  • Gained additional market share
  • Forced its primary competitor into releasing games for PlayStation

Jim Ryan's success since becoming CEO in 2019 despite the significant hurdles in front of him has been pretty staggering.

The amount of hate he gets from small children is pretty laughable.
Sony was in a great position before Jim.

He navigated the pandemic great but Playstations success was carried over from last generation and the decisions they made last time.
The purchases were good, getting Kojima for another exclusive too. Everything else has been awful
 

Nhomnhom

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At this point I'm just hoping that studios like Team Asobi, ND, SSM, Sucker Punch will get one game out before the gen is over and I give up on PlayStation for good.

For more than a decade since about 2009, PlayStation was the best place to be and a platform that was exciting. Now it just isn't that good and someone like Totoki is unlikely to be the one that will get them back on track.

The pivot to PC ports and GaaS, the Bungie acquisition, the over reliance on remasters and remakes, the lack of any announcements, the lack of exciting upcoming games, the canceled games, the extremely long development cycle. It's pretty obvious that the best days of the PlayStation platform are now behind us.
 
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Polyh3dron

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The poor takes I'm seeing here are super disappointing. Thought there would be better analysis here.

Sony is in their strongest position in gaming since the early 2000s. They've made several investments to ensure that position improves over the next 5-10 years.

Jim Ryan has left PlayStation considerably stronger than any other executive has and that's simply undeniable.

  • Has entered into higher margin businesses that can bring in revenue AND operating income at times when new games are not be released
    • PlayStation Productions
    • Audeze
    • PC Game ports
    • GaaS
  • Has rapidly expanded the size and scope of PlayStation Studios and SIE
    • Haven, Bluepoint, Housemarque, Insomniac, Bungie, Nixxes, Firewalk, Firesprite, Valkyrie, e.t.c.
  • Successfully navigated the pandemic
  • Gained additional market share
  • Forced its primary competitor into releasing games for PlayStation

Jim Ryan's success since becoming CEO in 2019 despite the significant hurdles in front of him has been pretty staggering.

The amount of hate he gets from small children is pretty laughable.
I'm with you on most of this, but the GaaS pivot and positioning of Bungie has been an abject failure.

We do seem to be in the minority on here as far as the merits of late PC game ports go though. A few very loud voices here hate them in any capacity with every fiber of their being, no matter how late they are.

When did Sony buy Audeze though?
 

Danja

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You're moving the goalposts. First party studio portfolios were smaller then? Not Nintendo or Sega's.
I am not moving any goalposts lol. Games did not require as much man-power and resources back then. Yes, first party portfolios were smaller then? I don't even wanna know what you are thinking about if you think modern day first party stables are even the same as they were back during mid 90's to mid 00's.

The point that you're ignoring is that Sony's ps5 output to date is greater than what Sony has ever done to this point in any generation, especially the PS2.
Please without those supped up PS4 cross gens the PS5 would be a wasteland first party wise. And it currently is. PS3 and PS4 had better NEXT GEN only first party support launched aligned compared to the PS5.
That isn't nitpicking. People aren't crediting 2nd party games for Sony this year why should we count them from the ps3?
Again look at the PS3's first 3 years. Sony pushed their own intellectual properties from day one. Acting like an Insomniac game in 2006 - 2009 wasn't basically just a first party game is weird. They were literally collaborating with Naughty Dog and helping them with their PS3 engine as well. People love to claim the PS3 had no games till 2009 but Sony did a pretty good job getting out their own stuff from the very start... the PS5 would be the best console ever if we were getting output like that again lol.
You were the one that brought up stakeholders...

Totoki is a financial guy, that doesn't mean he hates PlayStation, but that's how someone who doesn't understand business sees things.



Old games being released on PC somehow is watering down a brand... that's very interesting.

Sony is handling marketing differently these days, that doesn't mean there isn't anything in the pipeline.


1) Dou have problems reading? I said Shareholders aren't all in on Totoki's short term gain at the expense of long term gain plan. You bragging about how high sony stock shares are is irrelevant.

2) Totoki gives no shit about Playstation. Many would kill to have a business as successful as Playstation, this guy comes out shitting on the brand, gtfo. Man has no confidence in the brand or even understand just what makes PlayStation special. He speak about the brand as if it's just another checks and balance spreadsheet.

3) I wasn't aware stuff like Returnal, Ratchet, Forbidden West, Sackboy, Miles Morales are all old games? Again Demons Souls and Spiderman 2 being the only actual PS5 exclusives left, is embarrassing. The Last of Us 2 def getting an announcement this summer.

4) Sony and marketing? LOL , do they have a marketing department anymore? :ROFLMAO:
 

mibu no ookami

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I am not moving any goalposts lol. Games did not require as much man-power and resources back then. Yes, first party portfolios were smaller then? I don't even wanna know what you are thinking about if you think modern day first party stables are even the same as they were back during mid 90's to mid 00's.

Easy enough to prove me wrong. Name the games that came out during the mid 90s that you think are in line with what Sony has done so far on the PS5.

Please without those supped up PS4 cross gens the PS5 would be a wasteland first party wise. And it currently is. PS3 and PS4 had better NEXT GEN only first party support launched aligned compared to the PS5.

Name the games... pretty simple.


Again look at the PS3's first 3 years. Sony pushed their own intellectual properties from day one. Acting like an Insomniac game in 2006 - 2009 wasn't basically just a first party game is weird. They were literally collaborating with Naughty Dog and helping them with their PS3 engine as well. People love to claim the PS3 had no games till 2009 but Sony did a pretty good job getting out their own stuff from the very start... the PS5 would be the best console ever if we were getting output like that again lol.

Name the games... again pretty simple. And no Insomniac wasn't a first party. You may want to redefine 1st party to suit your needs, but that tells you how weak your argument is.

1) Dou have problems reading? I said Shareholders aren't all in on Totoki's short term gain at the expense of long term gain plan. You bragging about how high sony stock shares are is irrelevant.

Sony's stock has never been higher than it has post PS5 launch.


2) Totoki gives no shit about Playstation. Many would kill to have a business as successful as Playstation, this guy comes out shitting on the brand, gtfo. Man has no confidence in the brand or even understand just what makes PlayStation special. He speak about the brand as if it's just another checks and balance spreadsheet.

Put the tribalism away. Totoki wants to be the next CEO of Sony. PlayStation is the most important product and division Sony has, but keep telling yourself want you want to believe.

3) I wasn't aware stuff like Returnal, Ratchet, Forbidden West, Sackboy, Miles Morales are all old games? Again Demons Souls and Spiderman 2 being the only actual PS5 exclusives left, is embarrassing. The Last of Us 2 def getting an announcement this summer.

Have no idea what your point is here.

4) Sony and marketing? LOL , do they have a marketing department anymore? :ROFLMAO:

How was has Helldivers 2 done without marketing? The industry is changing. You might not want to accept that, but it's a fact.
 
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