Sony hosted a small meeting about its Game & Network Services business, which is basically the investor-friendly definition of PlayStation.
Sony Interactive Entertainment CEO Hideaki Nishino and PlayStation Studios CEO Hermen Hulst fielded some questions, providing more color on the intended strategy going forward.
We hear that PlayStation isn’t focusing on monthly active users as its sole key performance indicator, but they’re instead focusing on profitable growth, making sure that Customer Lifetime Value for every new user is profitable.
That being said, they’re confident that there is room to grow monthly active users as well. To that end, they’re “investing in the future of the platform to make it more accessible to a broader range of users.”
Since the main focus is to grow profitability instead of growing MAU at all costs, PlayStation is focusing more on monetizing its user base via recurring revenue like add-on content revenue, which reflects in the latest financial results.
Speaking of the next generation of PlayStation consoles, the executives mentioned that it’s “not realistic” for the company to “absorb all component cost increases,” which is why price increases on PS5 have already happened. That being said, sales are proceeding as planned, and Sony doesn’t believe the higher prices have led to a reduction in demand.
In principle, they don’t intend to sell hardware at “significant” losses, but they’re “carefully monitoring the market and continuing to evaluate their approach.”
They also “believe it is important to make every effort to ensure that customers fully understand the value they provide in relation to pricing.”
A rather interesting answer is about the future focus on hardware and the possibility of expanding to other distribution channels.
“The value of our proprietary device lies in the experience, not the hardware itself. As a dedicated gaming device, it provides seamless, immediate access to content—unlike general-purpose devices, which involve multiple layers before gameplay. We aim to expand reach across diverse play styles and environments while maintaining confidence in our first-party software.
At the same time, most of the value of our ecosystem is driven by third-party publishers, who benefit from our large install base, strong community
engagement, and monetization tools. This supports a shift toward a true digital platform business. While opportunities exist beyond console (e.g., mobile and PC), we aim to proceed carefully, ensuring we are not constrained by our own hardware ecosystem. Overall, we see expansion potential over the next five years.IP is a crucial point of differentiation for our first-party content, and it is part of the virtuous cycle that is the PlayStation experience. We try to create benchmarks, quality bars and inspirational content. Even though first-party software is a minority of the overall sales of SIE, it serves as a core reason why people enter the PlayStation experience. Our valuable IP franchises are important in increasing brand loyalty.
We are assessing multiple scenarios and options, including technology, hardware and business models. We are focused on how to optimize profitability in the future.”
Interestingly, another question was about the plans to bring back PlayStation users who have migrated to PC during the COVID pandemic. We hear that Sony has been releasing peripherals like monitors and speakers to break the fixed perception that PlayStation belongs only in the living room and to broaden usage scenarios.
For the next-generation console, rather than simply making it an alternative to PC, they aim to deliver value that is unique to PlayStation, including “not only technological advancements but also an expansion of usage styles, enabling a seamless experience that can be enjoyed naturally beyond the living room.”
Interestingly, the executives admitted that developers may push to expand games to other platforms like PC to maximize reach, while the executive team will take a broader view and optimize total value for Sony.
They engage in constructive dialogue with developers to make sure all decisions are based on clear logic and prioritize transparency to clearly explain the tradeoffs, even if not every outcome can satisfy everyone involved.
They also reiterated that “broader platform expansion can make sense” with live service games.
