How the PlayStation Took Over the World
Will the strategies that have powered Sony’s success in gaming for 25 years translate to the streaming generation?
It’s hard to overstate Sony’s success in the world of video games. The company dominates the list of best-selling home consoles of all time, occupying four of the top-five slots. From the beginning, Sony has set itself apart by courting (and sometimes buying) game developers and making the PlayStation experience less expensive than other options. As streaming platforms gear up for war in 2020, the question it faces now is whether the same strategies can carry the company to success in the future.
One of Sony’s key strategies in the past has been to undercut its competitors when pricing its consoles, even selling them at a loss to gain users. But in the near-future world where game streaming finally works, that strategy might not work. To wit, Sony preemptively undercut Google’s Stadia, slashing the price of its streaming platform PlayStation Now in half from $20 a month down to $10 for 720p gaming with a bunch of games included. But Stadia is already set to give its platform away for free in 2020. The race to the bottom, at least in terms of platform pricing, might come to an end soon.
If history is any indication, that might leave Sony with only one very important arrow left in its quiver: The games that no one else can get. Currently, game developers tend to pick markets where they can get the most favorable deal or sell the most copies. Platforms like Stadia and Microsoft’s xCloud are promising to widen that base farther than it’s ever been, turning every laptop, phone, and TV into a platform for the best AAA games. If they catch on, it could make developers second guess whether taking an “exclusive” deal with a particular platform is worth the sales they might miss out on by not being on a competing platform. Fortunately, thanks to some smart bets in the past, Sony might be prepared for this.
Sony set its strategy of focusing on games almost by accident. Back in the early ’90s, just before the first PlayStation came out, consoles were mainly built to sell their manufacturer’s own games. The Sega Genesis was built to sell Sonic games, and the Super Nintendo was a Mario and Zelda platform…
