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Reaction: What Sony's TGS Tells Us About PlayStation's Future

Posted by Sammy Barker

Through the looking glass

Sony shocked attendees at its Tokyo Game Show press conference earlier this week by announcing the PlayStation 3 Super Slim. Unfortunately, the corrugated console itself was not the reason for open-mouthed attendees – that accolade was reserved for its flummoxing price-point. Indeed, as opposed to positioning the aging system at a previously untapped cost-conscious market, the company instead opted to go toe-to-toe with Nintendo’s new Wii U. In Japan you’ll be able to pick up one of Sony’s new machines for a meagre ¥20 (roughly 25 cents) less than Nintendo’s fresh arrivals, and the situation isn’t much better overseas. So, what does the announcement tell us about PlayStation’s future under a much more financially focused regime?

Upper executives have clearly concluded that brawling for market share is no longer worth the financial risk

For those still puzzled by the platform’s existence, the PS3 Super Slim is undoubtedly the product of a cost-cutting exercise. However, unlike the system’s previous refresh, Sony’s decided to pocket the savings for itself. That probably reads a lot more sinisterly than it should, but upper executives have clearly concluded that brawling for market share is no longer worth the risk to the company’s bottom line. As such, engineers have concocted a platform that’s cheaper to produce, and allows Sony to maximise the profit on each console sold. From a purely financial perspective, it makes sense.

However, it emphatically eschews the rules established by several generations of console production. Typically manufacturers choose to lose money on hardware, opting to grow their install base and recoup costs through premium priced supplements such as software and accessories. At a more mainstream $199.99, there’s no doubt that Sony would have been able to capture more customers this Christmas. But whatever your opinion of the organisation’s business acumen, you have to imagine it carefully considered all of the potential outcomes.

That it opted for such a risk averse approach speaks strongly about new CEO Kaz Hirai’s profit-centric philosophy. The former PlayStation boss has stated his intent to unite Sony Corp as a whole and drive it back towards profitability, and that endeavour will no doubt have an impact on the design of the PlayStation 4. With the platform holder adamant it won’t cut the cost of the Vita even in lieu of paltry hardware sales, it’s evident that the company will endeavour to make money from the off next generation.

Alas, that puts the pressure on the division to position the platform properly at launch. The Vita has been far too easily outmuscled by the 3DS, and because of the organisation’s devotion to its bottom line, it’s been unable to properly react. A limp TGS showing compounded the handheld’s woes, with only Soul Sacrifice and God Eater 2 (a title also coming to PSP) worthy of note. Its headaches aren’t too dissimilar to those initially faced by the PS3, but this time it doesn’t have the clout of the PS2 to prop it up. The Vita is caught in a catch-22 at the moment, unable to convince developers or consumers that it’s a platform worth investing in. Even though it’s probably breaking even, the handheld is currently too expensive to turn things around.

Sony may be forced to avoid an arms race with PS4, and opt for a platform that favours value above all else

The PlayStation 4 simply can’t succumb to the same situation. If Sony’s aiming for profitability across the board then it needs to ensure that it can achieve a price-point that’s palatable on a global basis. That may mean that the company’s forced to avoid a technological arms race against Microsoft, and opt for a refined platform that favours value above all else.

It would certainly be a first for a brand that’s defined itself as cutting-edge, but the company’s financial predicament may leave it without a choice. The console needs to be bankable and successful from the start – Sony simply doesn’t have billions of dollars waiting to blow on digging its next commercial disaster out of a quarry-sized hole. Perhaps its recent acquisition of Gaikai will hold the key to it attaining the very best of both worlds.

Either way, the next 12 months are going to be fascinating for PlayStation fans – and followers of the industry alike. With the Wii U braced for impact, and rumours pegging Microsoft and Sony’s next consoles for E3, it’s going to be interesting to see how each of the manufacturers react. The latter’s Tokyo Game Show press conference certainly won’t be remembered for its content – but it may just be looked back upon as a tease of the overall company’s corporate direction.

What do you think is the perfect price-point for the PlayStation 4? Would you prefer the company to produce an expensive console packed with cutting-edge technology, or release a cheaper system that’s a little more refined? Let us know in the comments section below.

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User Comments (23)

Squiggle55

#1

Squiggle55 said:

I personally want a cutting-edge machine in the PS4. I don't care if it's $600 if the value is there. I want a powerful enough machine to bring remote play to life. But the problem is, if the PS4 fails because of a high price point, that directly affects me as well.

zezhyrule

#2

zezhyrule said:

What Sony's TGS conference told me is that Sony is lame at making good TGS presentations. Was bored out of my mind the entire time.

get2sammybAdmin

#3

get2sammyb said:

@zezhyrule People tend to forget with TGS that it's generally aimed at the Japanese market. As such, they always tend to retread a lot of stuff from GamesCom/E3, but re-tune it for the Japanese market who may not be aware about it.

@Squiggle55 Personally, I agree with you — but the market is just not rewarding high powered consoles at the moment. I've always appreciated that Sony makes the "Ferrari" of game consoles, but I think it's going to play it safe next-generation. It'll still be significantly more powerful than the PS3, though, of course.

Samholy

#4

Samholy said:

too pricey for a console at the end of its cycle. And that fears me on the next console launch price.
i will wait a few years until the machine is in place, had revisions, price cut and a library to pick in. (and a used market is available) To be honest, sony never had a console that worked fine at launch, they all had malfunctions. bugs, overheating, problems. all of them

so ill stick with the WiiU for the next few years until the ps4 is affordable and fixed. nintendo never failed me with console overheating of malfunctionning. i owned one of each of their consoles, and they all lived until the end of their cycle and beyond. even old NES work fine. Unless you think that blowing into carts is a bug ;-p And the WiiU has great chances to get the same third party titles than the other consoles, which is great.

hydeks

#5

hydeks said:

I think that's all fair, and honestly, I can't see the PS4/xbox 720 being much more powerful, least not the leap it had from PS2 to PS3.

ThreadShadow

#6

ThreadShadow said:

Is TGS over? I'd like to know what happened to the unannounced games Sony had to offer, what were they?

Mandoble

#7

Mandoble said:

The PS4 already exists, companies are already creating games for it and Sony cannot downgrade it from which ever grade it has already without ruining current works in progress. If any, they can upgrade it. About the price, it will depend on what it gives. Curiously I got 3DS and Vita at launch time for very similar prices, few weeks after acquiring the 3DS it was quite clear for me how incredibly overpriced it was, I have not the same feeling with the Vita.

CrissCross87

#8

CrissCross87 said:

I really think the next generation is going to be more about gimmicks, innovation, and features. I really think both Sony and Microsoft will be trying more to cater to all consumers. People say PCs currently have the power to make the ps3 and 360 look like garbage, but I have yet to see a game look like that, let alone a fleet. Do people realize how long it takes to animate Pixar movies or Avatar? To expect games games to look that good in that recession sounds almost like a joke. If video game studios close often now, what do you expect then?

Mandoble

#9

Mandoble said:

@CrissCross87, that's not the point about power. That's the feeling you might have if playing only on consoles, that only graphics can be improved. The reality is a bit different.
http://www.youtube.com/watch?v=olEt30pd6o0
http://www.youtube.com/watch?v=5zhS4DuML5Q
1000 AI units at work at once, be ready to put a battery of 10 PS3 working in parallel to handle that.
http://www.youtube.com/watch?v=8KK6Fo3Y0AU&feature=related
1500 AI
It is not just about graphics at all.

Slapshot

#10

Slapshot said:

@CrissCross87 "I really think the next generation is going to be more about gimmicks, innovation, and features."

Perfectly stated and I completely agree. The only wildcard I see is if Sony goes all out power, which I think will be disastrous for them.

"Do people realize how long it takes to animate Pixar movies or Avatar?"

Yes and it also cost an insane amount of money too. Disney is also found itself in financial woes, because just like the gaming industry, people don't want to pay premium prices any more and they'll never recoup the massive losses they took on Tangled.

There's another equation that so many people keep leaving out of the "next gen" debates — cost to produce games. The prices to develop triple-A first/third party games has went through roof and Ubisoft is one of the only developers/publishers that could support the high cost to develop games without going under if a game didn't sell well. The risk is simply too high in this market. Consumers don't want to pay premium prices in a high enough demand and Vita is a clear sign of this.

Mandoble

#11

Mandoble said:

There are companies that tend to go with story driven games with lots of cutscenes, which are like small fragments of big films and expensive voice acting. And this doesnt result into any AAA. Then you have other companies that just use already created game engines and that focus just on gameplay. Remove all the Hollywood like fragments of a game and see how much money do you save, but for the rest you might pretty well need an i7 and 4GB of RAM. You program the AI of one unit once, and you can model a unit only once, now place 1000 of these in a map and lets see how much power do you need (in exchange of minimum development effort). Model five types of trees, then use an island creator program to generate a map with 10000 of these, you may do it in a weekend, then set visual range to 10Km and try that in a PS3, lets see if you get more than 2 frames per second. More power is not equal to more effort, usually it is the very opposite.

Gamer83

#12

Gamer83 said:

Both Sony and MS will have consoles that are a marginal step up at best. I'm fine with that, as long as the pricing is right. $400 bucks for a system a bit more powerful than Wii U? I can deal with that, more than that though and these companies better be throwing in extra stuff. I'm talking a second controller, game, etc.

Slapshot

#13

Slapshot said:

@Gamer83 I think you're dead-on with the pricing — $400 USD would be a great entry price for a new PlayStation console that offers a decent leap ahead over the PS3.

Slapshot

#15

Slapshot said:

@get2sammyb I think if it tops that, there's going to be problem for Sony. Not trying to be negative, but just being realistic.

The issue of today is that while the premium tablets cost around $400+, they are also portable laptops. If you've been paying attention to the iOS world, the push to the bottom (pricing wise) is being countered by some developers bringing out games that are pushing into premium console-like experiences. iPad 3/ iPhone 5 have the potential to produce some really amazing games and as soon as Apple's official gaming controller lands on the market, we'll see more and more of this. Since I've recently plunged myself into this world of gaming, my eyes have been opened to what's about to come and how tablet/smartphone gaming is absolutely here to stay.

This impacts the next-generation of home consoles (market wide) too. If a tablet can do all of this for $400 and produce console-like quality games at a cheaper price-point, then it's going to keep attracting more core gamers. People only have so much money to spend — one reason Vita continues to struggle — and the more options that become available to people, the harder it is to take a risk on premium content for any company.

The next 5-10 years are going to be very interesting to witness for anyone who love the gaming industry.

Oh, if you're looking forward to Dragon Fantasy: Book II, then you must play Dragon Fantasy! It's available on iOS/PC/MAC and it's absolutely brilliant. It runs absolutely brilliantly on the iPhone and is the best $2.99 (iOS) you'll spend in a long-time. Highly recommend it! ;)

get2sammybAdmin

#16

get2sammyb said:

@Slapshot Picking up one of your points, though — I'm not sure how long the "race to the bottom" model can be sustained. You're never going to be able to buy God of War for $0.99 — so either that type of game ceases to exist in the future, or it gets turned into an infinite runner.

astroshamu

#17

astroshamu said:

I feel like the ps4 should go and compete against xbox more than wii U because if they compete with wii U they probably will end up losing because the wii U is a family and gamer system now. Most people dont think of xbox or playstation as a family system no matter how hard they seem to try with move, kinect, and whatnot. The only games my family plays on ps3 is all of our old ps2 games or little big planet.

bubby444

#19

bubby444 said:

I got the vita day one and i spent well over $300 for it.i dont regret it back then but now seeing all these bundles coming out for the same price i got mine makes me made.Thats why im not getting a ps4 when it comes out until the price is good and has a good value.

Slapshot

#20

Slapshot said:

@get2sammyb Oh yeah, no way I'm saying you'll ever see a triple-A God of War game on the App Store (in the format the series is today) for $5 or less. What I am saying is that the handful of games that are on the the mobile market(s) that offer console-like experiences are usually usually premium prices ($5-$40) — many of which I expect to see on PlayStation Mobile — and with their cheaper prices and massive install base, whether we like it or not, they're pulling the gaming market into a new (unexpected) direction.

Personally, I think Microsoft is going to bring out a cheaper system with moderately better specs than the 360, that utilizes a new iteration of Kinect and focuses mainly on family/party type games. I think SmartGlass and Windows 8 will also play key roles in their next system as well.

FluffyNinja

#21

FluffyNinja said:

In my opinion, they shouldn't worry too much about the next gen console. I believe they should focus more on the PS vita.

Gamer83

#23

Gamer83 said:

@FluffyNinja

That should definitely be top priority for the next year. They need to do some price adjustments and open the checkbook to companies like Capcom, Konami and Square. I really think North America and Europe are lost causes, they can have moderate success but once again how the system performs in Japan will go a long way to determining how long the machine can stay around. To have any hope of that they need/have to land Resident Evil, MGS, Monster Hunter, FF and Kingdom Hearts.

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