The Summer Game Fest hopes to bring the news, announcements, and headlines we have lost over a canceled E3. So far there hasn’t been a large volume of news but, what has come out has been significant. We got the Tony Hawk 1 and 2 Remastered announcement. That was followed by an Unreal Engine 5 tech demo running on PS5. As well as an Xbox Series X 3rd party games showcase for the launch window of the new Xbox. After the Xbox event, Summer Game Fest host Geoff Keighley hosted a web conversation with Xbox Marketing head Aaron Greenburg, games industry analyst Michael Pachter and former Sega of America and Xbox head Peter Moore.
One of the small tidbits to come out of this conversation was Peter Moore’s race to 10 million units sold comment. Moore seems to imply that the first console to hit that magic number will end up leading the console generation in overall units sold. The idea really comes from exponential word of mouth, FOMO, and non-core gamers going to where the audience is. Dating back to the SNES VS Genesis “Sega does what Nintendon’t” era I can’t find any examples of this not being true. However, the PS3 and the Xbox 360 were very close towards the end. Moore has some great thoughts on Sony and Microsoft’s direction. The context surrounding his full comment as follows as well as the entire video below.
“Microsoft is being pretty smart about waiting Sony out here. From what I have seen Sony is going to have to charge $500 for their PS5. Microsoft has a big balance sheet if they want to cut the price by $100 just to price below (Sony). Then subsidize the first 10 million, they will. I think that they are waiting to have Sony blink first, then they will reveal the price and the launch date. It’s going to be holiday, very likely sometime in November. Very likely $400 and fans are going to get a lot for their $400.“
“Michael is right. You are going through what both companies are going through right now. Which is, “how much can we afford to lose in the first 12-18 months? What is our attach rate of software to hardware? What’s the revenue we can drive through services? What are we willing to do in year one, two, and three to hit 10 million (units sold)? Always remember first to 10 million wins. Michael is right, Microsoft right now the stock price, the market cap, everything is flying for them.
Does Satya (Microsoft CEO) say with some of the challenges Sony may be having, “This is our opportunity right now, as we did with Xbox 360, let’s get in, let’s price it right, let’s get the right content there. Let’s continue to build Xbox Live. Let’s take advantage of the global crisis we are going through right now because the thirst and appetite for these online experiences have never been greater in our history. And let’s dare Sony to come in at $500. Let’s dare Sony to not have the online offering.” If I was at my old job that is exactly what I would be doing. That’s exactly what I think they will do.“
“After this (Xbox Series X game showcase) how do you think Sony approaches it with PlayStation 5? They have been very quiet so far. Do you think this will impact Sony’s strategy at all?”
“My understanding was that they had something planned for GDC and they passed. I truly think we are kind of back to where we were in 2013 when Sony was scared to death that Microsoft was going to launch the Xbox One at $349. So Sony wasn’t going to be able to match the price and they got lucky that the Xbox One with Kinect was $500. I think they are both waiting for the other guy to blink. I think Sony doesn’t realize that Microsoft doesn’t give a- G-A-F. They are going to wait wait wait wait.
I don’t think we will get a price until the day after Sony gives us a price. And Sony is going to have to say $500. That’s the big open question. When is Sony going to say $500? What is consumer reaction going to be to that? The company has already said there will be supply constraints at launch because they don’t think there will be that much demand. They don’t want to take a big loss on these things. Sony doesn’t have $50 billion in the bank as Microsoft does. Sony fans are rooting for Sony. Xbox fans are rooting for Xbox and it’s going to be hard to win them over. Pricing is a big determining factor. If Xbox is $100 cheaper, they are going to win over some PlayStation fans especially when people don’t have jobs and don’t have money coming in.”
Sony’s Pricing Problem
After digesting some incredibly insightful thoughts from some longtime industry veterans and insiders. You have to wonder if Sony feels the same way. Of course, they want to be the first one to 10 million units sold as Peter Moore points out. Just as badly as they want to be the first to 100 million units sold. Does Sony have a longer-term vision for PS5 that involves health and wellness, PSVR2, subscription services, and games spread out over the years? Are we only going to get a teaspoon of PS5 this year? Or is Sony going to come out in the next month or two and completely drop the hammer?
We have to agree with Pachter on the pricing problems with Sony. Nobody can speak to how much of a loss Sony will be willing to take on each box just yet. We know the console itself costs $450 to manufacture. We don’t know if this includes R&D, packaging, and controller. In addition to that, every industry insider echoes Pachter’s sentiments on Microsoft’s willingness to take a loss in the first year. Sony’s path to 10 million isn’t as clear as it was in 2013. Way back when Microsoft stumbled out of the gate with extreme anti-consumer practices surrounding the Xbox One reveal. If it’s not price, what is Sony’s path to 10 million?
The Road to 10 Million
Games. Sony’s path to 10 million units sold will be found through the games. I think one of the main reasons why we haven’t seen the PS5 yet is because Sony is going to try to blow consumers away with games and not just the console itself. While Microsoft has tied itself to games running on all of its platforms through 2021, Sony could release all of its new games exclusively on PS5. This would allow them to have games designed specifically for one box and would allow developers to go nuts with the ultra-fast SSD. While incentivizing consumers to make the transition to PS5 quickly.
It’s most likely the first year of PlayStation’s lineup will land somewhere in the middle of insane and downright boring. There is also the chance that it could go one way entirely. There is a nightmare scenario where they show the box running a tech demo and then a month later show the games. We get short gameplay clips of Resogun 2, Godfall, and a non-VR Astrobot 2. Sony would lean on multiplatform games like Call of Duty. to get them through the year. Horizon 2 would come out in late 2021 along with Gran Turismo 7. Then Spider-Man in 2022. While that is a pretty cool slate of games, it doesn’t exactly set the world on fire for this year.
Then there is another scenario where Sony reads the room. They are aware they don’t have the price, they don’t have services like Game Pass and they still have to compete with Halo Infinite. Sony could pull out all the stops and do something like a 2015 E3. Show games that are three years out. Have wild new experiences and bring back names that will excite even the Xbox fanbase. What if the eventual PS5 games showcase looks something like this?
Rumored Or Confirmed PS5 Games.
- Resident Evil 8.
- Call of Duty Black Ops reboot with exclusive content.
- Silent Hills/Silent Hill Reboot title.
- A new IP by Kojima Productions.
- Street Fighter 6.
- A new Batman title with PlayStation exclusive content.
- Gran Turismo 7.
- Spider-Man 2.
- Ratchet and Clank.
- Horizon Zero Dawn 2.
- Two PlayStation classic games remastered by BluePoint Games.
- A new IP from Housemarque Oy.
- The Order 1887.
- Half-Life: Alyx.
- NHL 21 gets exclusive PS5 content.
- SOCOM reboot.
- A new IP from Japan Studio or Ape Escape reboot.
Can They Get There?
It’s not unrealistic to think this is a route that Sony could go. If they are aware of the position they are in, Sony could come hot and heavy with the games. They will announce games that are far off and, maybe even games that are just getting approved to begin development. Also, they could try to lean into their existing VR base. Something that sets them apart from Microsoft. Over 1 million people have played Half-Life: Alyx, the $700 entry price point into PS5 with PSVR would be incredibly attractive over the $2000 price for PC and a VR headset. 120hz 1080p full VR support on Gran Turismo 7 and Resident Evil 8 with a $200 headset is a significant market differentiator. On top of being able to provide wellness and exercise games with the sensors.
To Peter Moore’s point, getting to 10 million first won’t be easy for Sony. They will have to do it through the games. Something to pay close attention to as the PS5 gets unveiled. Most likely they will not be able to do it with pricing or services. If the PS5 has a game showcase this year with a crazy number of highly anticipated games, it could become difficult to buy a PS5 in 2020. On the other hand, if it has a meager showing of titles, it could be a long console generation for PlayStation. It was worrying to not hear Peter Moore and Michael Pachter make a point about Sony’s games. We can’t wait to see what happens over the next 30 days. Follow lordsofgaming.net on all the social platforms to stay connected up to the hour. Follow for our monthly PS5 update Circle Cross Square as well.
Video Featuring Peter Moore, Aaron Greenberg, Geoff Keighley, and Michael Pachter.