PlayStation CEO Jim Ryan talks Metaverse, potential acquisitions, expanding live services and more

During the PlayStation segment Q&A session of the 2022 Sony Business Segment Briefings, CEO Jim Ryan provided additional details about SIE’s business and plans.

Ryan was asked to comment on the Metaverse, and he mentioned that nobody really knows what the Metaverse will look like in the future, but he doesn’t think it will directly replace the existing way people play games. It will appeal to some individuals and segments of the market, but many will prefer to enjoy games the way they’ve played them for the past 30+ years.

He thinks the Metaverse could lead to some sort of incremental move in the business, but no one knows yet to what extent that will make sense. For the time being, Sony sees this as an opportunity for further growth.

Ryan then mentioned that PlayStation Studios has a great track record of delivering great, narrative and graphically beautiful single player games, but he admitted that Sony may have limited itself to a fairly narrow segment of the gaming market. By expanding into PC, mobile and live services, they have the opportunity to expand outside of this narrow segment and have a presence anywhere in the gaming market. If done right, intelligently, and excellently, Ryan believes that this is potentially an extremely big opportunity for significant growth in the number of people playing and spending money on Sony games

If Sony manages to take a portion of the 12 Live Services games that are expected to be active through March 2026 to critical and commercial success, the impact will be “completely transformative” for the company’s business structure.

Ryan explained that gamers want great games. This is the first and most overwhelming perspective. How they are delivered is “rather of secondary importance”. From this perspective, PlayStation Studios has never been in a stronger position than it is now and Sony expects this position of strength to continue and grow.

Sony is in a “virtuoso cycle” where success has enabled investment that will generate more success, which will enable further investment and, in turn, will generate even more success. The company believes that there is a significant risk of disrupting and possibly breaking the virtuous circle in a move to a different model that puts its AAA games into a subscription service on day one, and that’s not imminent best interest of the PlayStation gamers.

We’re also hearing that Sony is investing heavily in partnerships with independent and other third-party developers to secure a “substantial pipeline of compelling virtual reality content” when PlayStation VR2 launches. This investment will continue to grow as the installed base of the headset grows.

Ryan then discussed acquisitions, stating that Sony “is far from done with its strategy to grow PlayStation Studios.” In addition, they must expend a great deal of management time and energy to ensure that the large number of studios acquired are properly integrated and managed.

To the extent that potential targets fit Sony’s strategy and allow it to accelerate the way the company executes its strategy, they will “certainly consider further M&A activity” (mergers & acquisitions) to to complement their business portfolio.

Sony expects the 15% difference in ARPU (average revenue per user) enjoyed by the PS5 versus the PS4 to increase over time. First of all, the quality of games Sony sees coming to PS5 “will only increase over time” and they “already have some wonderful and very exciting games visible that show a relatively large increase in quality” compared to what was during the same period in PS4’s lifetime.

Second, the shift to a large percentage of live service games is likely to stimulate ARPU growth. Great live service games have ARPUs in the hundreds of dollars compared to $60-70 for single player games. Not all live service games can do that, but if Sony manages to get these types of results in a significant percentage of the 12 live service games that are in development, it will take PlayStation’s overall ARPU to unprecedented levels bring level.

In closing, Ryan stated that it’s still too early to draw any conclusions, but the very first market reaction to the new PlayStation Plus offering has been “extremely positive”. If Sony performs well in rolling out the service globally, there’s a chance the subscription game will grow significantly, especially as PS5 console sales start to accelerate.

Furthermore, the potential of the service goes beyond simply increasing the absolute number of subscribers. If many join the second or third tier of the service to access their “really attractive features and game offerings,” it will not only increase the number of subscribers, but also the ARPU for each subscriber.

https://twinfinite.net/2022/05/playstation-jim-ryan-metaverse-acquisition-live-services/ PlayStation CEO Jim Ryan talks Metaverse, potential acquisitions, expanding live services and more

Jaclyn Diaz

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