PlayStation-flation
Sony's pricey play for a changed game
The SuperJoost Playlist is a weekly take on gaming, tech, and entertainment by business professor and author, Joost van Dreunen.
The big kid was unimpressed by the Minecraft trailer.
The live-action interpretation fell flat right away. The pink bleating sheep was horrifying. And I sensed a distinct ‘Jack Black’ fatigue.
It’s a misfire that underscores the broader challenge in adapting video game IP to live-action films: bridging the gap between gaming's stylized aesthetics and cinema's perceived need for realism. The uncanny valley effect, where characters appear almost but not quite human, can create a sense of discomfort among viewers, alienating longtime fans and newcomers alike. Just like that pink sheep.
Deviating from original designs risks undermining what made these characters iconic in the first place. It's a fundamental misunderstanding of what makes video game IP compelling. Games thrive on stylized visuals and exaggerated features, creating a unique aesthetic integral to their appeal. Forcing these characters into a live-action mold strips away their distinctiveness and leaves us with an unsettling attempt at realism. Did I mention the sheep?
Fortunately, much of the internet agreed. And, true to form, Minecraft fans everywhere took it upon themselves to ‘fix’ the trailer. Within 48 hours a slew of alternate versions appeared, some offering deep references to the lore and others staying true to the look and feel of the blocky game.
It evidenced precisely what’s different about the next era in entertainment: If you don’t make something people like, they’ll now make it themselves.
On to this week’s update.
BIG READ: PlayStation-flation
Sony’s announcement of the $700 PlayStation 5 Pro, set to launch on November 7, 2024, caused a predictable stir. But is it a fair price, though?
Priced at $699 in the US, with comparable pricing in other regions, the PS5 Pro represents a 40-50% premium over the current PS5 model. The new device offers improved hardware, including a more powerful GPU, advanced ray tracing capabilities, and AI-driven upscaling technology. It also comes with a 2TB solid-state drive and double the storage of the standard PS5. Fully loaded, it will run you about $1,000.
Better specs at a premium price mirror Sony’s strategy with last generation’s PS4 Pro, targeting enthusiasts and potential upgraders from the PS4. Here are two reasons why this makes sense, strategically.
First, the beefed-up device price is clearly not for everyone. Sony knows the addressable console audience is limited. It previously marked down its forecasted unit sales from 25 million to an eventual total of 20.8 million in 2023, indicating the beginning of the end for the current cycle. Unable to add a meaningful number of new people at a lower price tier to the market, upselling existing ones and reinforcing their loyalty by providing them a premium experience at a higher price point is a more obvious route. It’s part of the emerging phenomenon of luxury gaming.
Second, as in previous generations, the upcoming slate of new titles (think: Grand Theft Auto 6) will likely be playable on the existing install base. The end of a cycle does not mean that people stop playing. Not at all. Getting a next-gen title that’s playable on a current-gen device hits home for a substantial subset of players. It extends the life-cycle for a device that’s proven itself in the market and has higher profit margins than whatever comes next. Nevertheless, the ecosystem reset has clearly disappeared in console gaming, and publishers are aiming to optimize the new market circumstances.
Forecasts from Ampere circle around 1.3 million PS5 Pro units to be sold in the 2024 launch window, putting it slightly below the PS4 Pro's 1.7 million units at launch in 2016. A premium pricing strategy reflects Sony's focus on maintaining profit margins and adapting to supply chain inflation while capitalizing on the lack of direct competition in the “mid-cycle” upgrade market.
My take: Sony is making a play for the most ardent brand loyalists, just as it has in the past. It’s aiming for the one percent of fans willing to spend up to $1,000 to have the shiniest PS5 yet. Naturally, that’s not for the average console gamer. What’s often overlooked is that Sony is a consumer electronics company that has established itself on the premium side of the spectrum. At a minimum, you’ll have to agree that the PS5’s final form is a better deal than one of those minisculely improved iPhone 16s with a better button for $1,200.
NEWS
Warhammer franchise adapting to the next century
Regular readers of this newsletter will know I’m a longtime Games Workshop (GWS) fan. I’ve spent a small fortune assembling several armies, and right now, I’m working on a set of Primaris Aggressors that I picked up in Oxford. So, you can imagine my excitement with the release of Warhammer 40,000: Space Marine 2 this week.
Evidently, I’m not the only one. According to the company, over 2 million copies of the game were sold within the first 24 hours. It also hit a peak of 225,690 concurrent players on Steam earlier this week, which speaks volumes about its popularity.
What’s interesting here is how much GWS’s stance on licensing has shifted. A few years ago, when I spoke with them, they were clear that licensing wasn’t a key part of their business model, and they had no plans to change that. Fast forward to today, and their latest annual report tells a different story.
For the 2023/24 fiscal year, GWS posted a total revenue of $683 million, up 12% year-over-year. Core revenue—which includes Trade (sales to independent retailers and distributors), Retail (from company-owned stores and events), and Online (web stores, digital subscriptions, affiliate sales)—grew by 11%, reaching $643 million. Licensing, once a smaller slice of the pie, saw a significant 22% increase, bringing in $40.3 million, with $35 million in operating profit from that division alone. The strategy has clearly evolved.
By my count, GWS now has 30 different Warhammer 40K titles in the market across all platforms, but they haven’t all hit the same level of success. Tacticus, developed by Snowprint Studios, leads the pack, generating $35 million in sales last year.
One big issue still hangs in the balance: the creative differences between Amazon Studios and Games Workshop over their upcoming Warhammer 40K series. From what I’ve gathered, Amazon plans to cast half of the speaking roles with women, a choice that’s weirdly deeply controversial within the Warhammer community. The 40K universe is notoriously male-dominated, with the female faction called Adepta Sororitas being one of the few exceptions. Even Henry Cavill, a major fan of the lore, has allegedly voiced concerns, pushing for the show to stick to its roots. Cavill previously left The Witcher series over similar creative disagreements when Netflix strayed too far from the original canon. But where that horrid Minecraft trailer I mentioned earlier changed too much, refusing to make any changes at all doesn’t seem right either.
As Games Workshop deepens its ties with Hollywood, we’re bound to see more tension between creative vision and fandom expectations. But if the success of Warhammer 40,000: Space Marine II is any indication, the company might be finally ready to let its universe expand beyond the tabletop and into mainstream pop culture.
A few thoughts on Concord’s failure to take off
Following its disappointing release, PlayStation Publishing shut down Concord, which took six years to develop and cost well over $100 million, raising questions about the firm’s longer-term strategy in multiplayer gaming.
Concord's disappointing release can be attributed to several factors. Its August launch coincides with one of the slowest months in the gaming calendar. The game also faces stiff competition, releasing within a week of Black Myth: Wukong, which has captured significant attention. Concord struggles to differentiate itself from established shooters with massive audiences, failing to draw curious players away from their familiar titles. Its $40 price tag is a hard sell in a market flooded with free-to-play shooters. The timing is further complicated by the current console cycle's end, making consumers risk-averse and more likely to stick with proven titles. As a new intellectual property, Concord lacks a pre-existing fanbase to bolster its launch. Despite its high production values and ambition to deliver a novel experience, these combined factors have created significant obstacles to Concord's success.
However, it is crucial to view Concord's (poor) performance in the broader context of Sony's emerging strategy. As the company expands beyond its traditional console ecosystem, launches like Concord serve as a learning exercise in the cross-platform publishing space. The contrasting performances of Concord and Helldivers 2 provide valuable insights for refining Sony's approach to multiplayer and live service games. The success that Helldivers 2 presented was a definite highlight. But it also makes for a tough act to follow.
For investors, while Concord's immediate financial impact may be disappointing, it represents a necessary step in Sony's adaptation to changing market dynamics. It always makes for great headlines when a juggernaut-sized firm fails. But a $25 billion gaming giant is likely to leverage these lessons and strengthen its position.
My take: as Sony pushes beyond the boundaries of its own walled garden, it’s going to have to define what its brand promise is as a cross-platform publisher.
PLAY/PASS
Pass. Dutch Game Garden, an incubator from the Netherlands, is closing its doors after 17 years due to a shift in subsidy policy. Given its impact and widespread recognition, I think the Dutch could have spared a measly $1 million to keep DGG open. A massive loss.
Play. The team at Genvid won an Emmy (!) for its SILENT HILL: Ascension. Congrats!
NEXT UP
After last week’s announcement of the new venture, I plan to dedicate the next write-up to developing my broader thesis around the ‘Play Pendulum’ and what it says about the decade ahead. Sharpen your pencils.
I miss it when game franchises were not regarded as good for movies so they took wild chances. At least the first MK was camp fun, the first Tomb Raider knew how to add some thrills, and I'll always have a soft spot for Silent Hill, a movie that pursued a vision rather than try to kowtow to fans or movie execs.