Hacker News Reader

Comment by exitnode | Hacker News Reader

It's sadly not stupid from their perspective

Except it really is. I don't see how businesses don't understand how this sort of anti-customer predatory behavior, MBA stuff, is directly driving reduced sales. The PS5, for instance, has only managed 96 million sales. For contrast the PS2 managed 160 million sales to a smaller market with much fiercer competition.

And I'm one of those tens of millions opting out. The PS2 felt like a great consumer-focused value. Modern consoles feel like opting in to get kicked in the balls and squeezed for every single penny they can get out of you.

The reason modern consoles aren't selling 300million+ units is because of myopia. And the worst part is that it's a vicious cycle. They see their sales shrinking so the penny pinchers and MBAs get even nastier squeezing the ever-shrinking userbase even more resulting in less sales meaning they need to squeeze those that remain even harder and so on.

At seemingly no point is anybody asking 'Hey why do our sales keep falling even though the potential market's way larger and the competition is pretty meh?' I guess that doesn't look as good on a powerpoint slide as trying to kill the used game market and pretending it will have no knock-on effects.

I feel this in my bones and it's a great way to frame it. My last Playstation console was a PS2 and I've also opted out of recent generations. Historically, for me, one of the benefits of a console was that you could just pop the game in, and it would always work, simply and easily.

DRM, online checks, DLC that should have been part of the base game, digital-only games, etc have ruined all that, and if that's going to be the trend everywhere I'll just stick to a PC and Steam where I have a library of games built up over the decades.

I have a Switch and feel that Nintendo provided a decent experience on their recent systems, but with the advent of "game keys" or whatever they call it on the Switch 2, they've flipped to being even worse than the digital-only systems. At least Sony isn't (yet?) trying to sell you a license on a disc to try to fool you into thinking you own a physical copy.

You can resell game key cards, at least? They seem better than digital copies to me. And first party games are still on cartridge for the most part.

People have convinced themselves that game key cards are terrible, when they're the exact same thing as the old style of cartridges, with the only difference that you don't have the 1.0 on it.

People are convinced that game key cards will stop working at some point, when it's the reverse that will happen; your card will be fine, but won't work on a Switch 2, only a future console.

Nintendo will close access to their stores to old consoles way before they break access with their cards.

> People have convinced themselves that game key cards are terrible, when they're the exact same thing as the old style of cartridges, with the only difference that you don't have the 1.0 on it.

I guess this statement is correct, but my point is that the most important thing to me is that I have the game on the cartridge.

Does the switch's "Match Version with Local Users" feature on the software update menu work for this, or is an internet connection strictly required the first time you insert a key card?

That's only for updates. The initial install must come from the eShop. That's not different for game key cards. When you first put a card in, you need to download the game from eShop. No exceptions.

> You can resell game key cards, at least?

Sure, unless the game is no longer available for download, in which case the key card is a worthless piece of plastic to anyone who hasn’t downloaded it previously. And you still have to contend with all the other downsides of downloadable games including managing the free space on your device.

At this point I don’t trust any console manufacturer to pinky promise that downloads will always be available, so I will not buy anything but a proper physical copy.

Gamers are notorious for accepting whatever abuse game companies and studios want to inflict, and then keep buying and buying. All the horrible anti-consumer technologies and business practices from DRM to games that are released unfinished, to kernel-level anti-cheats and rootkits, all are routinely done with video games because the industry knows gamers are fanatics and will put up with anything.

If gamers want to stop this, they need to stop rewarding these companies with their money.

99% of gamers who are mad about physical disk distribution going away will still buy the digitally distributed games.

The whole point is that they aren't accepting it. In terms of sales PS2 > PS4 > PS5. That alone is already a big issue but it becomes just comically bad when you consider that the world population is about 33% larger than during the PS2 era, gaming has become completely normalized, and that the competition in modern times is mediocre.

Have profits gone down?

No, but they're also monetizing a bunch of extra ways that they weren't in the past. In the PS2 era, Sony made money from the cut of physical games and accessories and maybe the console itself if it was purchased far enough into the console lifespan. These days they have online subs, cuts of DLC and microtransactions plus all the other stuff they had previously. And they get bigger cuts for DLC, microtransactions and digital games since they are the (only) retailer.

IIRC, the PS2 was sold at a loss, most of the profits came from accessories like controllers and memory cards. I worked at circuit city at the time which is why I remember this. The employee discount (at cost, essentially) did not exist for the console. I was irritated so I did some digging and that was what I had found.

Nope, no sources. That was like… 2 lifetimes ago.

The first few years. By the end it was supposedly profitable for Sony.

The answer to that has to come with some asterisks. Sony's statements on this issue are driven by accounting that defines generations solely by date (so PS4 profits after the PS5 launches count as PS5 gen profits) and are not inflation adjusted. There's also currency issues in play that further distort the picture. The yen just in the past 5 years has tumbled like 50% which is awesome for exports as that just bumps up your profits so long as your costs are more regional, but can be quite misleading. If you say profits jumped a bunch, you'd think you're doing something great - not just reporting currency fluctuations by proxy.

Beyond that, I think the real question is would they be earning more by selling 300million+ units to a growing userbase with a positive relationship than they are selling 100 million units to a shrinking userbase who they have an increasingly adversarial relationship with? And I think it's hard to see the answer to that question being no. But that again requires taking a step back to see the forest through all those trees.

Like here, ending physical disc production is obviously going to give them a short-term boon in profit as they kill off the used game market. But longer term? It's certainly going to further erode their playerbase. The short-term profit boost will be measurable next quarter, whereas the longer-term consequences will appear in the order of years. So you get a short-term boost and then longer term are left wondering where all your players went to. Then they invariably concoct nonsensical explanations that always look for any reason outside of their own actions to explain the decline. Like at one time the fable is that people were giving up consoles for mobile.

The next console is going to cost at least 1000 dollars, right? There's simply no way to sell hardware at 300 million units now. So I think their strategy is to abandon the mass market and sell to price unconscious consumers who will also pay more for games.

But what's the point of even releasing the next console? The current console generation has barely gotten started, and developers have barely taken advantage of the new hardware.

Maybe they need to look at releasing a cheaper console and making more quality games instead of constantly pushing so hard on graphics. Graphics help sales to an extent, but it's clearly not the whole story, given the popularity of the Wii or Switch. I think the people in charge no longer understand gaming, and are really struggling to produce games that will draw in large crowds again.

> So I think their strategy is to abandon the mass market and sell to price unconscious consumers who will also pay more for games.

Kinda seems like it. I'm curious to see what happens with that, because even people who so far have been willing to pay more will stop being customers if they can't produce an experience that's worth paying for. Maybe I'm in the minority, but the first-party PlayStation games all feel very samey to me.

For the ps6, they were already done with design and they'd need to let that go to waste to not put it out. I doubt it'll have many exclusives though - it's probably a ps5 pro pro thing.

But I'm also not sure they can sell a cheaper console. PS5 prices just rose and they'll rise again next year - so that level is already going to cost 800 dollars to consumers. You can't really sell hardware to anyone until ram prices come down it seems.

They could release a ps4 level console but I'm not sure it would be that cheap to source parts for... There are rumors of a handheld so that might be cheaper.

Basically console gaming is about to get impractical and they'll try and find a path to stay alive. That's my read.

I'm wondering if going back to cheaper and less capable hardware will actually result in better games. Forcing creativity, and maybe (by necessity) dropping the constant push for higher fidelity graphics. I think that push for fidelity is so costly that a large number of game developers don't even attempt to innovate in the rest of game design anymore.

> For the ps6, they were already done with design and they'd need to let that go to waste to not put it out.

I guess nobody can predict the future, but this sounds like the sunk cost fallacy. E.g., if it's not going to sell well enough to recoup manufacturing costs, then producing the console will be more costly than just wasting the design effort anyway.

Maybe they don't need mass market sales to at least break even?

Because they have almost definitely already factored in the loss from people boycotting vs the gain due to killing the resale market into their analysis. They are fully aware that some people are going to refuse to buy digital only

The unfortunate truth is that physical sales have been ever declining so the writing was on the wall

Edit: And you can't really compare the PS2 and PS5 in terms of competition. PS5 isn't just competing against other consoles, it's also competing against netflix, youtube, tiktok, any endless scrolling platform. There were much fewer options for entertainment in 2001 than there are now

So they sold half as many. The next question should be: did they make more than twice as much profit per sale? I suspect the answer is yes.

There's several points on this.

- The published profit margins from Sony are misleading. They take maximal advantage of inflation, currency shifts, and generational overlap to create a picture of profitability that is well above whatever the 'real' figure might be.

- You're comparing the present to the past, instead of an alternative present. Given the very large increases in market size and reduction in competition I think there's little doubt a consumer friendly Sony could have easily doubled their sales, if not substantially more.

- The downward slope of anti-consumerism is not sustainable. You end up in a situation where you have to keep charging more and more for a product where demand keeps going lower and lower. Especially as we reach an era of declining fertility, there's only so many fools.

- Why would you even want to do this? Even if, and I think that's a huge if, Sony ended up more profitable than good behavior would have yielded, it's going to be by the thinnest of margins. And they've put themselves in a situation where they're now in an increasingly adversarial relationship with their own users. See companies like EA or Activision on the software side doing the same thing. I think there's some je ne sais pas to be had for leaders of a beloved companies, as opposed to leaders of yet another corporate bottom feeder.

Reply on news.ycombinator.com