Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The PlayStation 5 gaming console with host high-end next-generation tech but will come with a premium price tag. Is the market ready for the shift? Read to find out more.
Sony’s upcoming PlayStation 5 launch has already got everyone talking about it. The launch of new PlayStation models always creates a huge buzz. However, this time Sony is likely to adopt a shift in its business strategy by targetting hardcore gamers.
Sony’s shift in strategy could come with experts saying that the Japanese tech giant plans to price the PlayStation 5 at a massive $800. Michael Pachter, an analyst at Wedbush Securities spoke in the same regard during his recent talk show with Geoff Keighley.
Patcher says that this massive price surge is totally inexplicable and could be a spanner in the wheel of Sony’s biggest cash-cow i.e. the PlayStation. However, a recent report from the Wall Street Journal suggests that Sony could adopt a different strategy targetting hardcore gamers.
Targetting Hardcore Gamers
Needless to say that with the upcoming PlayStation 5, Sony will introduce high-end hardware and ultra-fast graphics rendering speed. Thus, instead of targetting more customers with attractive price points, Sony wants to target titles with big budgets to drive profitability.
As per the WSJ report, Sony CEO Kenichiro Yoshida was to introduce PlayStation 5 as a niche product targetted at serious gamers. Besides, he added that the upcoming PlayStation console will host high-end power-packed tech like ray-tracing aimed to give life-like optical effect in the games.
Thus to unleash the hardware prowess, Sony is targetting big titles which could simultaneously drive higher profitability. Note that despite the dropping hardware sales, Sony’s last year’s fiscal revenue jumped 19%. Thanks to its growing PlayStation Plus subscriptions and growing gaming software sales. The company generated $21 billion in total revenue with $3 billion in operating profits.
Thus, it looks like the company plans to further tap into this strategy by releasing more high-budget titles. However, just targetting hardcore gamers worth the gamble? This could even mean losing its share to competitors from gamers who are not willing to pay this much higher. To analyze this, let’s look into some additional data.
Sony’s Gamble With PlayStation 5
Video games researcher Newzoo puts gamers in eight categories. Based on their findings, the researcher goes to claim that casual and hardcore gamers no longer have the highest gamers’ base. This could be a big problem if Sony is to target hardcore gamers only with its PS5.
As per the Newzoo’s classification, only a third of the total gamers belong to the hardcore category. The hardcore gamers are the ones who are willing to spend money on the hardware.
On the other hand, a whopping 46% of gamers fall in the “cloud gamer” and “time filler” category. The “Cloud gamers” are more inclined to streaming services without wanting to spend much on hardware. The “time filler” gamers are occasional players playing only to kill their time.
These two contribute a huge share within the charts of global gamers and not including them in your ecosystem could be a big gamble for Sony ahead.