With Amazon announcing Luna, now all of the big three (Google-Stadia, MS-xCloud) have started their own cloud based gaming services. I’m saying big three, as they are all huge companies with trillion dollar market cap, and all three have huge cloud infrastructures.
To illustrate this point: Microsoft alone has more cash at hand, than the whole Sony conglomerate (including insurances and whatnot) is worth.
The writing has been on the wall for a while. More players like f.i. Tencent entered the arena, buying up IP’s and talent, making those resources scarce. Add to that the shift in many business branches towards subscription based services in lieu of selling standalone products. The result is a coming industry consolidation - and it will be one favoring those with the huge near mythical warchests.
How can Sony compete in such a business landscape? They neither have the financial means to compete in bidding wars, nor the technical infrastructure to compete in this field. In my opinion they need to partner with one of the big, and they need to do it quick, else they’ll be left behind - like Blackberry. I find this comparison apt, as Blackberry’s where very fine products, well regarded by their users, but ultimately their niche was not enough to sustain against the competition.
Looking at Nintendo, I think they can have more success. They have found a niche where they simply have no competition right now. This might change tho, when cloud based gaming services break through on mobile devices.
What do YOU think how the competitive landscape in the gaming industry will look like over the next ten years?
Disclaimer:
This is not a free for all console war topic. Let’s discuss where the industry we love is heading, mkay?
I think them being Blackberried is a bad title, because being Blackberried implies that you were only popular for a short time before being cast to a hardcore brand loyalist market.
Sony isn’t a Blackberry in this situation, they are more of a YouTube.
They are the biggest in terms of userbase and units sold company, but it is, and will continue to lose the enthusiast and more informed markets to competitors with more unique and more diverse outputs.
I tried to explain why I’m drawing the comparison - very good hardware and eco system, beloved by its users, but ultimately with too small of a niche to sustain.
But you know, I’d like more to discuss where you see the industry heading, and how you think everything is going to shake out!
I think its very unpredictable right now. The industry is in flux and nobody can predict exactly where it will end up. Sony have clearly had a strategy of being the ‘last hold out’ protecting the traditional model - but the wheel will stop spinning at some point and Sony don’t want to be left holding the booby prize when it does. Hence their cloud partnership with MS.
Its harder to plot Sony’s path. I’d certainly not write them off - but I personally think they will need a strong partnership somewhere because they don’t have the scale to compete if google, amazon etc seriously push this. I honestly don’t think in the next decade that a Sony/MS formal partnership on gaming is out of the question.
That is such a win, win for both companies lol: Microsoft gets additional business from Sony to use their cloud platform and not Amazon’s, meanwhile Sony does not help an additional competitor get a foothold in the industry - plus I believe Microsoft agreed to use Sony’s camera division or something like that.
I’m not too worried about anything happening to Ssony in the next 10-15 years, and in that time I think they are more than capable and savvy enough to figure things out in a way that wont be similar to blackberry. Tbh from my perspective something needs to in the near future be “Apple/Iphone-ing” themselves before something can be Blackberry’d.
So far I have not seen any big splashes or good metrics or traction from these new players in the market. Even Xcloud’s official release has come and went with little fanfare. I’m also not convinced yet that the Ceos of Amazon or Google believe in gaming and making big gaming purchases like Satya Nadella does nor that these companies “get” gaming and the culture in a way where I feel worried they are suddenly gonna buy up the market any time soon.
Frankly when it comes to the “Blackberry” analogy I would say it’s Cloud gaming itself that’s in the Blackberry phase of existence or even the Nokia Phone phase and we are a good few years away still from the “Iphone” of Cloud Gaming.
I think they made many mistakes with psnow, including having a 7 year headstart and showing nothing for it.
They should have researched a way to run Playstation 1-5 games natively on windows pc and that would have got then in a massively good position. As they could rapidly expand to all markets, not being crippled by capacity issues in having to have only dedicated hardware to run their games, and they would get flexibility to migrate their entire platform easily, so they could shop for better prices.
With this they would probably be unstable in the segment.
They did not really had a headstart because they only bought the technology without the understanding how to evolve it in something bigger. IT which includes Cloud is not their key competence - you don’t have that just because you sell a bunch of PCs and Laptops. Their key competence is entertainment and consumer products and this is very well shown how they have put their strategy and tactics.
Agree, my point was mostly, since they had bought the team and launched the service they should have used the 7 years alone in the market to make it better.
But here we are 7 years from now and still limited to 720p30, separate licenses, separate saves, needing ps3, ps4 and soon ps5 hardware to support the games…
Yeah, we can see that Microsoft, Google, and now Amazon are making huge bets on cloud streaming being the ‘next big thing’ in gaming. That doesn’t mean it’s a sure thing. Motion control was the next big thing in gaming for a few years, until it petered out. VR and augmented reality have been repeatedly hyped as next big things and that’s never really arrived.
But I’m also not going to put my head in the sand and act like Microsoft/Sony/Nintendo is eternal and nothing can ever change that. IF cloud streaming does take off, and big players like Google and Amazon truly throw their weight into it, Sony and Nintendo are in real danger of being left behind, and it’s not going to matter how good The Last of Us 3 is if Sony is unwilling or unable to offer it on platforms that the market has moved to.
Nintendo at least seems very willing to evolve and pivot. They’ve gone in directions that were apart from the mainstream before and scored big wins because they were willing to do that. Sony, on the other hand, just seems completely married to its current hardware and software strategy and will never budge an inch. Maybe the cloud streaming bet pays off this decade, maybe it doesn’t. Maybe something else totally different will be the next big industry disruptor. But betting that you can just keep doing the same thing forever-- that that next big disruptor will never come-- seems like a surefire way to lose.
If that sounds like the lofty pitch for Google’s Stadia cloud gaming service, you’ve been paying attention. But every single one of those things was promised years ago by a startup named Gaikai — a startup that Sony bought in 2012 for $380 million. At the time, Sony gave every indication that it would harness the full potential of a PlayStation cloud. It even bought Gaikai’s closest competitor, OnLive, in 2015 and launched a service called PlayStation Now that finally hit 1 million subscribers this October. But half a decade later, the company has barely tapped into cloud gaming’s promise, and competitors like Google seem poised to attract the gamers that Sony failed to convert.
…Though Perry says he’s loyal to Sony for buying Gaikai and eventually building a service with 1 million subscribers instead of just “shoving it somewhere in a drawer,” he says his personal opinion is that Sony didn’t really understand what to do with Gaikai, and the company started by trying to shoehorn Gaikai’s tech into a way to sell its own hardware.
“Sony acquired something that they thought would be a good idea to buy because they could feel the momentum, and I don’t think at the time it was clear to them which business they were in,” Perry says. “If you are in charge of PlayStation, are you in the hardware business or are you in the gameplay business? I don’t think that was clear. Because if you’re in the hardware business, this isn’t very interesting. If you’re the guys building hardware, and someone starts talking about the cloud, it’s just like, ‘Meh, we’ve got work to do.’”
Sony’s model is more like Gillette, selling razor (console) at loss to make large profits on the recurring blade purchase (games). I would say the analogy is closer to Nokia+TI (dominated the feature phone, failed to react to smart phone). When you’re so entrench in a market, and making good profit, it’s very difficult for management to take their eye away from their profit centers and start to invest in any meaningful way in future project where returns are not certain.
When your immediate competition is Nintendo & XBox, its difficult to really invest in cloud. The cloud streaming has not been the tech problem, I have been working on this for 10 years, and never considered a tech challenge. But like early dot com, its been difficult to see how we make money (I think this has been the challenge for Stadia). For, cloud gaming to succeed, the successful player(s) will have figured out how to be a successful business.
MSFT, GOOG, AMZN all see 3Billion gamers, but GOOG and AMZN do have a console of PC gaming business. But they have cloud data center, so its easy for them to go this route.
Sony has strength in console, and games. But if console diminishes in importance, they need to partner with a cloud provider, get out of console, and strengthen their game studios.
Playstation can still be a strong player, as a studio. The importance for Sony is when they react to this, do they leave the transition late, hemorrhaging money to keep relevant in a diminishing market. This is always the most difficult to the market leader.
The way Sony operates now is very archaic, they’re still practicing old school methods and building a closed ecosystem.
They should have followed Apple if they want to build a closed ecosystem, the problem is Sony doesn’t have the means to build their own operating system that can be fully compatible and open.
What you will get with Sony is first party exclusives and a half-assed ecosystem. Microsoft nailed the ecosystem from Console/Mobile/PC/Game Pass/Cloud. Once their first party catches up (which it will with 23 studios) then Sony has lost all its advantages.
MS is finally operating like Behemoth it is for their gaming division.
I’d say the analogy of Windows Phone would be more accurate.
Microsoft were in Smart Phones looooong before Apple and Google. Didn’t take it seriously or do it right, then Google and Apple came in and muscled them out.
The gaming industry has proven itse;f to be a very difficult thing to crack. Microsoft still hasn’t managed to dominate it, sony couldn’t shake nintendo’s handheld dominance even at the height of their influence. Stadia…exists and not much else.
I don’t think sony’s days are necessarily numbered (for one, I bet they will end up buying/merging with a major eastern publisher at some point. If they aren’t feeling out square enix right now, they are insane.)
For one, with the exception of microsoft, every big player seems to be trying to buy their way in with streaming services, which are unproven and largely a gimmick in the gaming space.
