PlayStation, ‘Helldivers 2’ And Sony’s Rock And Hard Place

PlayStation has just laid off 900 workers across the world, including many from its highest profile, highest performing studios like Guerrilla Games, Naughty Dog and even Insomniac, where Spider-Man 2 just had Sony’s “fastest selling exclusive launch ever” shortly after release.

All of this leads to questions about Sony’s larger business model in the market, albeit they’re far from the only ones asking themselves these questions. They are, however, one of the highest profile examples of industry staples reckoning with AAA games, live service, subscriptions and more.

This led to Sony’s Herman Hulst laying this out yesterday in the wake of the layoffs:

“Delivering the immersive, narrative-driven stories that PlayStation Studios is known for, at the quality bar that we aspire to, requires a re-evaluation of how we operate.”

“Delivering and sustaining social, online experiences – allowing PlayStation gamers to explore our worlds in different ways – as well as launching games on additional devices such as PC and Mobile, requires a different approach and different resources.”

Sony is saying here that in order to keep delivering its big, narrative stories like God of War, The Last of Us, Spider-Man, Horizon and others, other parts of the business need to grow. Namely live, ongoing games and launching games on new platforms outside of PlayStation. Though not “full Xbox,” mentioning only PC and mobile.

A fundamental question here is what exactly a giant AAA narrative success even looks like at Sony now. If Insomniac can produce Spider-Man 2, one of Sony’s biggest exclusive hits ever, a sequel to its biggest exclusive hit of the previous generation, and the studios is still be hit with layoffs, what exactly is the path forward for AAA here? The idea is that bloated budgets negate these hits and create slim profit margins, but even if not, it seems like executives are just not satisfied with the level of profit, even if there is profit.

The idea that live service is going to print money endlessly and help pay for these other games does not make much sense. Live service games are notoriously costly to run and convince players to stick with, especially some of the biggest ones. That includes the now Sony-acquired Destiny 2, cranking out live content every quarter almost, but the cost of doing so has become prohibitive and revenue and playercounts are dropping. These games are not cheap to operate and the idea that Sony can make A) enough hits and B) ones that have hugely profitable monetization and C) can fight against not just 50 other live games but also streaming TV and Tik Tok does not seem like a steady path forward.

A game like Helldivers 2 indicates that yes, Sony can have big hits on their hands in the live space. But the long term future of that game is unclear. It also has very light monetization, good for players, but perhaps less so for Sony’s bottom line. And with its big success on PC, that’s Steam taking a 30% cut of everything there. And Sony would need a couple Helldivers-like hits a year to really turn things around. That does not seem possible.

We have recently seen further disasters that can come as the result of poor, expensive live service investment. As we speak, Skull and Bones and Suicide Squad: Kill the Justice League are bombing on a level rarely seen in the AAA space after almost a decade of development and hundreds of millions of dollars invested. Wouldn’t you want a successful Black Flag-like single player pirate game over a giant live pirate ship bomb? Wouldn’t you want a successful Arkham-like single player Superman game over a live Suicide Squad looter? I know that’s what fans certainly wanted, and the case after ongoing live revenue resulted in huge losses that single player games might have avoided.

This is Sony’s problem, and one that I don’t think they have an answer for, despite what they’re saying here. I do not believe it’s viable to imagine that they are going to make a string of hugely successful live hits that can both support themselves and pay for expensive single player blockbusters. So what’s the solution? I don’t know, and they don’t either, it seems. But first, layoffs!

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