Mibu no ookami
Banned
It's proving to be quite a huge year for Sony and Sony Interactive Entertainment in general. I think it will ultimately be a year where we see Sony's video games business drastically change from its previous models and their revenue is going to increase significantly in the coming years.
New Pillars
PlayStation Productions
Bungie and external growth
Multiplatform Support
GaaS
Spartacus and subscription services
PlayStation Productions
I think PlayStation Productions has the potential to be extremely large for Sony Interactive Entertainment. The rebranding from PlayStation Originals shows how serious Sony is about this and the 120 million dollar budget for Uncharted is just the beginning.
Video game movies aren't generally well regarded but neither were comic book movies before the early 2000s. I'm not sure that Uncharted has done anything to change that but it has performed fairly well given we're still in a pandemic and theater revenues haven't returned to normal. Uncharted is performing just behind the Sonic movie in terms of Box Office performance, but more importantly, I think it sends a message that PlayStation Productions has the ability to generate serious revenue. It looks like Uncharted will probably have a global box office of about 300 million dollars. We'll see how much The Batman destroys on-going box office domestically though.
Their next efforts look to be the Last of Us TV series with HBO, a rumored Twisted Metal TV series with Anthony Mackie, Ghost of Tsushima directed by the John Wick director, and Jak and Daxter. The Last of Us looks like it could be the biggest HBO show in some time, obviously, we'll have to wait and see. I'm sure the plan here is to give the Last of Us 2 a second lease on life along with the heavily rumored Last of Us Remake. I believe we'll see these released for PS4, PS5, and PC, but more on PC later.
It'll be very interesting to see who they cast as Jin Sakai in Ghost of Tsushima. It'll be very interesting how Sony sells this movie internationally. Mulan was tailor-made to perform in China and was a box office disaster for Disney. They obviously have to tiptoe around China to even ensure the movie gets a release. Spider-Man No Way Home is Sony's biggest movie ever, but it hasn't received a Chinese release yet and may never. Given the game was not perceived well in China, I'm guessing no Chinese release will ever happen, which will mean the movie probably will get a smaller budget but probably won't kowtow to Chinese politics. I think Ghost of Tsushima will get a PC release well before this movie comes out. Since they haven't even announced a cast for the movie yet, I think we're at least two years away from a film release. Speaking of which I either cast Ken Watanabe or Hiroyuki Sanada (having worked with the John Wick director) as the uncle. Despite Ghost of Tsushima lending itself well to film, I don't think it will perform all that well unless it is a directorial masterpiece, which I'm just not expecting.
I think PlayStation Productions is going to go through some growing pains, but I think like Marvel, they'll find getting the right director and the right cast plays a big part in the success of these films. I think the casting of Tom Holland and to a degree, Mark Wahlberg helped sell this movie, especially on the heights of Spider-Man No Way Home, but I do think they'll have to do better.
Twisted Metal is going to struggle to be carried by Anthony Mackie and 30-minute episodes leaves me in complete confusion as to what this thing is going to be. I'm not surprised that in this content race no one has rushed to buy this yet.
Sony Pictures actually has the live-action TV rights and long-form animated tv rights to Spider-Man (episodes longer than 44 minutes). I could see TV shows made based on the Spider-Man video games in conjunction with Sony Pictures Television.
I assume that Jak and Daxter will be animated and made in conjunction with Sony Pictures Animation and unlike the Ratchet and Clank movie, made with a budget larger than 20 million dollars. And I think that we'll at least see a Jak Trilogy remaster as a result if not at least a Jak and Daxter 1 remake. Ruben Fleischer being pegged to head this despite no experience with animation is particularly jarring. Ultimately, I hope he is only producing and isn't directing. To give frame of reference here Hotel Translyvania is probably an appropriate target goal for a Jak and Daxter movie. The movie received a budget of 85 million dollars. Regardless, I don't think we see a Jak and Daxter movie released until 2024-2025.
Bungie and external growth
Bungie checks a lot of boxes for Sony, which explains the price tag. They ensure a major FPS producer at a minimum remains multiplatform after Microsoft has purchased pretty much every prominent FPS developer. It also helps SIE jumpstart their GaaS business, which I'll get to as well, but recall that fairly recently Sony was looking to buy Leyou for probably the exact same reason. In addition to this major new IP they are working on that Sony must have insight into, getting Destiny 3 + Major New IP + GaaS expertise checks a lot of boxes for them for sure.
When you consider the revenue Sony is looking to create annually with their newfound business pillars, 3.4 billion is a drop in the bucket ultimately.
I think as continue to see Sony buying major studios or even Publishers they'll have to be extremely in line with Sony's strategy and/or DNA. What does the studio/publisher do that Sony can't do in-house, how does their talent/portfolio complement SIE's current talent/portfolio? Are they conducive to helping PlayStation Productions with TV/Movies? And what impact does that have ultimately on the studio/publisher's price tag.
Multiplatform Support
I think that Sony's inability to produce consoles is going to fast-track their multiplatform strategy. I think their purchase of Nixxes was them identifying early on in the PS5 life cycle that they weren't going to be able to produce systems quickly enough to maximize their revenue going forward. So many big-name games see their sales suffer due to incompetent ports.
I think Sony has recognized that with Horizon Zero Dawn. It's generally best to outsource the ports rather than have primary developers take resources away from producing new titles, even better than outsourcing would be to have an in-house team dedicated to PC ports. It'll be interesting to see how many games going forward will be handled by Nixxes rather than continuously outsourced to companies like Iron Galaxy Studios, Virtuous, and JetPack Interactive or done in-house like Sony Bend with Day's Gone.
God of War has already proved to Sony how successful they can be in generating revenue on PC. Does anyone think that the following games can't clear millions of copies on PC at 50 dollars a pop? My random estimates in parenthesis
Marvel's Spider-Man - (10 million)
Spider-Man: Miles Morales - (8 million)
Demon's Souls - (1.5-2 million)
Bloodborne - (2 million)
Ghost of Tsushima - (3-5 million)
Gran Turismo 7 - (5-10 million)
Ratchet and Clank Rift Apart (1-2 million)
Last of Us Remake and Last of Us 2 - (5-10 million)
Shadow of the Collosus - (500k-1 million)
Killzone Shadowfall - (250-500k)
Dreams - (all the money)
I think you're looking at at least 30 million copies across these games being more conservative than my estimates is 1.5 billion at 50 dollars a pop.
I think ultimately, Sony will distribute their own games through their own service on PC as they can't enjoy cutting off their revenue to Valve/Steam and Epic/EGS. Once they start distributing their own games, it's only a matter of time until they start distributing 3rd party games on PC as well.
I'm not sure how much if any money they made on the Xbox version of MLB The Show and if they'll make any money on the Switch version, but I can only imagine they're getting a strong cut of the revenue from those games. In conjunction with Bungie, we're seeing Sony being more willing to negotiate around deals that include multiplatform support, even direct competitors.
While most of us don't care about MOBA, I think iOS and Android will also be a big part of their plans. They kind of dabbled their toes in the water with ForwardWorks, but I think they'll double down on this. This is an example of where you'll see Sony buy a studio since starting an internal studio like ForwardWorks isn't a guaranteed success. I think Spartacus is going to ultimately end up on PC, Android, and iOS in some fashion as well. It's worth noting that Fate/Grand Order has generated over 4 billion dollars for Sony Music Entertainment in lifetime revenue.
GaaS
I think with GaaS, Sony may do something pretty interesting. Back in 2017, when Shawn Layden was Chairman of SWWS he liked the idea of GaaS but it was key that they weren't going to focus in on GaaS for studios that it didn't make sense to have focus on GaaS. I think that is ultimately why they purchased Bungie because GaaS still isn't in their DNA. I think we'll see some natural games play out as service-based games, but I think some of the GaaS are going to be made by studios that Sony partners with.
Having announced that 10 GaaS will launch between now and March 2026, I think we can look at some likely candidates:
1. Gran Turismo 7 - Polyphony Digital (I think we can assume to some degree that GT7 will be a Live Service game)
2. Destiny 3 - Bungie
3. PlayStation Home Version 2.0, PS5, PSVR2, and PC - Sony London Studios (I think Sony would be crazy not to return to PlayStation Home with PSVR2 and the current gaming climate)
4. Dreams PS5 and PC - MediaMolecule, Nixxes (Crazy this hasn't happened yet, but this is untapped revenue so clear that I can't imagine it not happening).
5. Unannounced Game - Haven Entertainment Studios
I think Dreams has the potential to be one of the largest GaaS games on the planet. PlayStation Home has really potential as well.
Spartacus
There are obviously comparisons to Game Pass but I think this is going to be bigger than Game Pass but also very different from Game Pass. There are 48 million PlayStation plus subscribers already. If every PS+ subscriber upgraded to the rumored price of the rumored 3rd tier of PS+ it would generate 288 million dollars in extra revenue every month or 3.45 billion per year. Note for later in the discussion that Sony bought Crunchyroll for 1.175 billion dollars.
Partially Spartacus is a realignment of current offerings. Microsoft already bundle Xbox Live Gold with some tiers of Game Pass. But if that is all it was, I don't think it would take a year to do a rebranding of PS Now. I think they'll have needed to work out licensing deals to pull off a lot of what has been rumored depending on the execution. I think by having separate services, Sony was doing themselves a disservice, but re-aligning as Microsoft has with Game Pass and Xbox Live Gold just makes sense.
What is interesting is the tiered pricing, which is very different from how Microsoft has structured their prices, but it also makes sense because Sony isn't where Microsoft is yet in terms of PC support. As I mentioned before I think eventually PSN/PS Store will come to PC and when it does, I think we'll see some change in the pricing structure to reflect support for a portion of your library on PC.
So far it looks like Sony is going for the Netflix/Amazon frog in boiling water approach to pricing to entice people to upgrade to higher tiers. Based on rumors they've appropriately broken up the value in PS Now in hopes of getting people to do a simple upgrade from PS+ for only 3 dollars more a month. I think that the middle tier will be rare. So many of us have clamored for proper backward compatibility and potentially that will be delivered in the top tier for 16 dollars. We'll see if Sony has properly emulated PS1 through 3. We already knew they had PS1 and PS2 emulators and now here is a chance for them to essentially monetize them and get us to stop asking about them. My questions will be whether these emulators include any enhancements and whether they allow people to play any of the existing game library (at least the digital portion) or if it more likely will just have a dashboard of games that you can play netflix style, and whether we'll be able to download these games and play them offline or if it will require them to be streamed. I can't imagine for 6 dollars a month they'll be able to have an extremely large catalog of 3rd party classic PlayStation games in addition to what they're already offering with new titles.
There has also been speculation that Sony might leverage their newly acquired Crunchyroll (Note: Sony Pictures bought Crunchyroll not Sony Interactive) and no pun intended roll that into Spartacus with Funimation (Note Sony Pictures owns Funimation not Sony Interactive), but the Grubb statements make no mention of this, making it less likely. It should be noted that Sony was trialing a PS Plus Video Pass in Poland last year. It's also worth noting however how many free subscribers Crunchyroll and Funimation both have and that you might be able to convince these subscribers to actually pay for anime through subscription to PS+. This would give Sony a huge advantage over Game Pass in my opinion.
Crunchyroll has 4 million paid subscribers and 100 million free subscribers. Converting even a small percentage of these users into paid subscribers through PS+ would help with retention and revenue generation. Crunchyroll left HBO Max at the end of 2021. Crunchyroll by itself costs 8 dollars per month.
Funimation has 2.5 million paid subscribers and over 120 million registered members (obviously there is crossover here with Crunchyroll). Funimation starts off at 6 dollars per month.
If you look at D+ and the D+, Hulu, ESPN+ bundle, you can get an idea of what I'm saying here.
D+ by itself costs 8 dollars a month.
Hulu costs 7 dollars a month by itself (ad-supported)
ESPN+ is also 7 dollars a month.
Individually these would cost you 22 dollars a month but bundled their price is 14 dollars.
Basically, you're looking at 100 million anime fans, who don't necessarily want to pay for anime by itself. I think it would be foolish not to try and leverage these services, but we'll see what happens. If Spartacus could convince 10 percent of these users to join the top tier, you're looking at an extra 10 million people to pay 16 dollars a month (assuming they don't already have PS+ and are on free versions of either service that would be 160 million in revenue per month or 1.92 billion in revenue per year. Even half that number with 5 million new users would be 80 million in revenue per month and 960 million per year, just shy of a billion dollars annually.
The purchase of Crunchyroll would pay for itself for Sony Group easily within 3-5 years and it would also give Sony a huge advantage over Steam for a PC platform and over Microsoft with Game Pass.
New Pillars
PlayStation Productions
Bungie and external growth
Multiplatform Support
GaaS
Spartacus and subscription services
PlayStation Productions
I think PlayStation Productions has the potential to be extremely large for Sony Interactive Entertainment. The rebranding from PlayStation Originals shows how serious Sony is about this and the 120 million dollar budget for Uncharted is just the beginning.
Video game movies aren't generally well regarded but neither were comic book movies before the early 2000s. I'm not sure that Uncharted has done anything to change that but it has performed fairly well given we're still in a pandemic and theater revenues haven't returned to normal. Uncharted is performing just behind the Sonic movie in terms of Box Office performance, but more importantly, I think it sends a message that PlayStation Productions has the ability to generate serious revenue. It looks like Uncharted will probably have a global box office of about 300 million dollars. We'll see how much The Batman destroys on-going box office domestically though.
Their next efforts look to be the Last of Us TV series with HBO, a rumored Twisted Metal TV series with Anthony Mackie, Ghost of Tsushima directed by the John Wick director, and Jak and Daxter. The Last of Us looks like it could be the biggest HBO show in some time, obviously, we'll have to wait and see. I'm sure the plan here is to give the Last of Us 2 a second lease on life along with the heavily rumored Last of Us Remake. I believe we'll see these released for PS4, PS5, and PC, but more on PC later.
It'll be very interesting to see who they cast as Jin Sakai in Ghost of Tsushima. It'll be very interesting how Sony sells this movie internationally. Mulan was tailor-made to perform in China and was a box office disaster for Disney. They obviously have to tiptoe around China to even ensure the movie gets a release. Spider-Man No Way Home is Sony's biggest movie ever, but it hasn't received a Chinese release yet and may never. Given the game was not perceived well in China, I'm guessing no Chinese release will ever happen, which will mean the movie probably will get a smaller budget but probably won't kowtow to Chinese politics. I think Ghost of Tsushima will get a PC release well before this movie comes out. Since they haven't even announced a cast for the movie yet, I think we're at least two years away from a film release. Speaking of which I either cast Ken Watanabe or Hiroyuki Sanada (having worked with the John Wick director) as the uncle. Despite Ghost of Tsushima lending itself well to film, I don't think it will perform all that well unless it is a directorial masterpiece, which I'm just not expecting.
I think PlayStation Productions is going to go through some growing pains, but I think like Marvel, they'll find getting the right director and the right cast plays a big part in the success of these films. I think the casting of Tom Holland and to a degree, Mark Wahlberg helped sell this movie, especially on the heights of Spider-Man No Way Home, but I do think they'll have to do better.
Twisted Metal is going to struggle to be carried by Anthony Mackie and 30-minute episodes leaves me in complete confusion as to what this thing is going to be. I'm not surprised that in this content race no one has rushed to buy this yet.
Sony Pictures actually has the live-action TV rights and long-form animated tv rights to Spider-Man (episodes longer than 44 minutes). I could see TV shows made based on the Spider-Man video games in conjunction with Sony Pictures Television.
I assume that Jak and Daxter will be animated and made in conjunction with Sony Pictures Animation and unlike the Ratchet and Clank movie, made with a budget larger than 20 million dollars. And I think that we'll at least see a Jak Trilogy remaster as a result if not at least a Jak and Daxter 1 remake. Ruben Fleischer being pegged to head this despite no experience with animation is particularly jarring. Ultimately, I hope he is only producing and isn't directing. To give frame of reference here Hotel Translyvania is probably an appropriate target goal for a Jak and Daxter movie. The movie received a budget of 85 million dollars. Regardless, I don't think we see a Jak and Daxter movie released until 2024-2025.
Bungie and external growth
Bungie checks a lot of boxes for Sony, which explains the price tag. They ensure a major FPS producer at a minimum remains multiplatform after Microsoft has purchased pretty much every prominent FPS developer. It also helps SIE jumpstart their GaaS business, which I'll get to as well, but recall that fairly recently Sony was looking to buy Leyou for probably the exact same reason. In addition to this major new IP they are working on that Sony must have insight into, getting Destiny 3 + Major New IP + GaaS expertise checks a lot of boxes for them for sure.
When you consider the revenue Sony is looking to create annually with their newfound business pillars, 3.4 billion is a drop in the bucket ultimately.
I think as continue to see Sony buying major studios or even Publishers they'll have to be extremely in line with Sony's strategy and/or DNA. What does the studio/publisher do that Sony can't do in-house, how does their talent/portfolio complement SIE's current talent/portfolio? Are they conducive to helping PlayStation Productions with TV/Movies? And what impact does that have ultimately on the studio/publisher's price tag.
Multiplatform Support
I think that Sony's inability to produce consoles is going to fast-track their multiplatform strategy. I think their purchase of Nixxes was them identifying early on in the PS5 life cycle that they weren't going to be able to produce systems quickly enough to maximize their revenue going forward. So many big-name games see their sales suffer due to incompetent ports.
I think Sony has recognized that with Horizon Zero Dawn. It's generally best to outsource the ports rather than have primary developers take resources away from producing new titles, even better than outsourcing would be to have an in-house team dedicated to PC ports. It'll be interesting to see how many games going forward will be handled by Nixxes rather than continuously outsourced to companies like Iron Galaxy Studios, Virtuous, and JetPack Interactive or done in-house like Sony Bend with Day's Gone.
God of War has already proved to Sony how successful they can be in generating revenue on PC. Does anyone think that the following games can't clear millions of copies on PC at 50 dollars a pop? My random estimates in parenthesis
Marvel's Spider-Man - (10 million)
Spider-Man: Miles Morales - (8 million)
Demon's Souls - (1.5-2 million)
Bloodborne - (2 million)
Ghost of Tsushima - (3-5 million)
Gran Turismo 7 - (5-10 million)
Ratchet and Clank Rift Apart (1-2 million)
Last of Us Remake and Last of Us 2 - (5-10 million)
Shadow of the Collosus - (500k-1 million)
Killzone Shadowfall - (250-500k)
Dreams - (all the money)
I think you're looking at at least 30 million copies across these games being more conservative than my estimates is 1.5 billion at 50 dollars a pop.
I think ultimately, Sony will distribute their own games through their own service on PC as they can't enjoy cutting off their revenue to Valve/Steam and Epic/EGS. Once they start distributing their own games, it's only a matter of time until they start distributing 3rd party games on PC as well.
I'm not sure how much if any money they made on the Xbox version of MLB The Show and if they'll make any money on the Switch version, but I can only imagine they're getting a strong cut of the revenue from those games. In conjunction with Bungie, we're seeing Sony being more willing to negotiate around deals that include multiplatform support, even direct competitors.
While most of us don't care about MOBA, I think iOS and Android will also be a big part of their plans. They kind of dabbled their toes in the water with ForwardWorks, but I think they'll double down on this. This is an example of where you'll see Sony buy a studio since starting an internal studio like ForwardWorks isn't a guaranteed success. I think Spartacus is going to ultimately end up on PC, Android, and iOS in some fashion as well. It's worth noting that Fate/Grand Order has generated over 4 billion dollars for Sony Music Entertainment in lifetime revenue.
GaaS
I think with GaaS, Sony may do something pretty interesting. Back in 2017, when Shawn Layden was Chairman of SWWS he liked the idea of GaaS but it was key that they weren't going to focus in on GaaS for studios that it didn't make sense to have focus on GaaS. I think that is ultimately why they purchased Bungie because GaaS still isn't in their DNA. I think we'll see some natural games play out as service-based games, but I think some of the GaaS are going to be made by studios that Sony partners with.
Having announced that 10 GaaS will launch between now and March 2026, I think we can look at some likely candidates:
1. Gran Turismo 7 - Polyphony Digital (I think we can assume to some degree that GT7 will be a Live Service game)
2. Destiny 3 - Bungie
3. PlayStation Home Version 2.0, PS5, PSVR2, and PC - Sony London Studios (I think Sony would be crazy not to return to PlayStation Home with PSVR2 and the current gaming climate)
4. Dreams PS5 and PC - MediaMolecule, Nixxes (Crazy this hasn't happened yet, but this is untapped revenue so clear that I can't imagine it not happening).
5. Unannounced Game - Haven Entertainment Studios
I think Dreams has the potential to be one of the largest GaaS games on the planet. PlayStation Home has really potential as well.
Spartacus
There are obviously comparisons to Game Pass but I think this is going to be bigger than Game Pass but also very different from Game Pass. There are 48 million PlayStation plus subscribers already. If every PS+ subscriber upgraded to the rumored price of the rumored 3rd tier of PS+ it would generate 288 million dollars in extra revenue every month or 3.45 billion per year. Note for later in the discussion that Sony bought Crunchyroll for 1.175 billion dollars.
Partially Spartacus is a realignment of current offerings. Microsoft already bundle Xbox Live Gold with some tiers of Game Pass. But if that is all it was, I don't think it would take a year to do a rebranding of PS Now. I think they'll have needed to work out licensing deals to pull off a lot of what has been rumored depending on the execution. I think by having separate services, Sony was doing themselves a disservice, but re-aligning as Microsoft has with Game Pass and Xbox Live Gold just makes sense.
What is interesting is the tiered pricing, which is very different from how Microsoft has structured their prices, but it also makes sense because Sony isn't where Microsoft is yet in terms of PC support. As I mentioned before I think eventually PSN/PS Store will come to PC and when it does, I think we'll see some change in the pricing structure to reflect support for a portion of your library on PC.
So far it looks like Sony is going for the Netflix/Amazon frog in boiling water approach to pricing to entice people to upgrade to higher tiers. Based on rumors they've appropriately broken up the value in PS Now in hopes of getting people to do a simple upgrade from PS+ for only 3 dollars more a month. I think that the middle tier will be rare. So many of us have clamored for proper backward compatibility and potentially that will be delivered in the top tier for 16 dollars. We'll see if Sony has properly emulated PS1 through 3. We already knew they had PS1 and PS2 emulators and now here is a chance for them to essentially monetize them and get us to stop asking about them. My questions will be whether these emulators include any enhancements and whether they allow people to play any of the existing game library (at least the digital portion) or if it more likely will just have a dashboard of games that you can play netflix style, and whether we'll be able to download these games and play them offline or if it will require them to be streamed. I can't imagine for 6 dollars a month they'll be able to have an extremely large catalog of 3rd party classic PlayStation games in addition to what they're already offering with new titles.
There has also been speculation that Sony might leverage their newly acquired Crunchyroll (Note: Sony Pictures bought Crunchyroll not Sony Interactive) and no pun intended roll that into Spartacus with Funimation (Note Sony Pictures owns Funimation not Sony Interactive), but the Grubb statements make no mention of this, making it less likely. It should be noted that Sony was trialing a PS Plus Video Pass in Poland last year. It's also worth noting however how many free subscribers Crunchyroll and Funimation both have and that you might be able to convince these subscribers to actually pay for anime through subscription to PS+. This would give Sony a huge advantage over Game Pass in my opinion.
Crunchyroll has 4 million paid subscribers and 100 million free subscribers. Converting even a small percentage of these users into paid subscribers through PS+ would help with retention and revenue generation. Crunchyroll left HBO Max at the end of 2021. Crunchyroll by itself costs 8 dollars per month.
Funimation has 2.5 million paid subscribers and over 120 million registered members (obviously there is crossover here with Crunchyroll). Funimation starts off at 6 dollars per month.
If you look at D+ and the D+, Hulu, ESPN+ bundle, you can get an idea of what I'm saying here.
D+ by itself costs 8 dollars a month.
Hulu costs 7 dollars a month by itself (ad-supported)
ESPN+ is also 7 dollars a month.
Individually these would cost you 22 dollars a month but bundled their price is 14 dollars.
Basically, you're looking at 100 million anime fans, who don't necessarily want to pay for anime by itself. I think it would be foolish not to try and leverage these services, but we'll see what happens. If Spartacus could convince 10 percent of these users to join the top tier, you're looking at an extra 10 million people to pay 16 dollars a month (assuming they don't already have PS+ and are on free versions of either service that would be 160 million in revenue per month or 1.92 billion in revenue per year. Even half that number with 5 million new users would be 80 million in revenue per month and 960 million per year, just shy of a billion dollars annually.
The purchase of Crunchyroll would pay for itself for Sony Group easily within 3-5 years and it would also give Sony a huge advantage over Steam for a PC platform and over Microsoft with Game Pass.
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