PlayStation is at a crossroads. The company’s new chairman, Hiroki Totoki, has acknowledged that the company’s studios need to improve “when it comes to business,” while Sony is also expecting a decline in PS5 sales next year due to a lack of major franchise titles.
During an earnings call covering Sony’s latest financial results, Totoki said that he was impressed by the creativity of the studio workers but believes there is room for improvement in how they invest money and plan development schedules. He said overall growth and sustainable profitability for increasing margins is a problem for the organization, and pledged to find solutions.
“It’s been about four months [since I became Chairman] and I’m trying to demonstrate leadership and have as many meetings as possible with the management team,” Totoki told media and investors listening to the web call, via a translator. “I’ve also visited studios, and everyone is working really hard to fulfil their responsibility to try to optimise the business, and I understand that. But overall growth and sustainable profitability for increasing margins… how will that translate to these goals? I don’t think people understand that deeply. I think that is the problem of the organization.”
This comes as Sony is also expecting PS5 sales to decline in the next fiscal year. The company is attributing this to the fact that they are entering the “latter half” of the console cycle the fact that it does not have plans to release any “major existing franchise titles” during this 12-month period.
It is clear that PlayStation is facing some challenges, but the company is also taking steps to address them. Totoki’s focus on improving business efficiency is a positive sign, and the continued growth of the PlayStation Network (which just posted a record number of 123 million monthly active users) shows that there is still a lot of potential for the platform.
Interestingly, another way the company plans to increase profit margins is by pursuing a more aggressive cross-platform release strategy – specifically on PC.
“In the past, we wanted to popularize consoles, and a first-party title’s main purpose was to make the console popular,” Totoki explained. “This is true, but there’s a synergy to it, so if you have strong first-party content – not only on our console but also other platforms, like computers – a first-party [game] can be grown with multi-platform, and that can help operating profit to improve, so that’s another one we want to proactively work on.
In 2022, PlayStation Studios announced plans to make console games wait “at least a year” before coming to PC. But recently, the company has been ramping up the number of first-party games it brings to PC.
Earlier this month, Helldivers 2 released for PS5 and PC on the same day, with the result being a smashing success for Sony. Helldivers 2 quickly set PlayStation Studios’ highest concurrent Steam player record, blowing past God of War‘s previous record of 73,529 players (as of February 13, Helldivers 2’s highest concurrent player count stood at 203,644).
While PlayStation faces headwinds, including a decline in PS5 sales and pressure to improve studio efficiency, its recent foray into PC gaming suggests a willingness to adapt and embrace new opportunities. The success of Helldivers 2 on Steam demonstrates the potential for this multi-platform strategy, and could herald a new era of growth for PlayStation Studios beyond the console space. However, navigating this shift while maintaining the unique identity of its first-party titles will be key to PlayStation’s continued success in the evolving gaming landscape.