PlayStation's New Boss Offers A Reality Check
Intrim CEO Hiroki Totoki suggests Sony's beloved first-party studios cost too much money
Sony spent the last decade investing in and perfecting certain kind of big-budget, prestige blockbuster video game across multiple first-party studios. From 2013’s The Last of Us to 2023’s Spider-Man 2, having access to exclusive story-driven, cinematic action adventures with mechanical depth became synonymous with owning a PlayStation.
Internal development teams pivoted from franchises that struggled to become breakout hits like Killzone and Infamous to very stylized open-world games like Horizon Zero Dawn and Ghost of Tsushima that offered beautiful visuals and substantive stories without skimping on gameplay systems. The new series and reboots like God of War sold tens of millions of copies, and propelled the PS4 to roughly 117.2 million consoles sold, 30 million more than the PS3.
This was what the now former head of PlayStation, Jim Ryan, called the “virtuous cycle,” where big successful first-party games won over players and increased sales, creating the conditions for more of them down the line. He went on a spending spree based on that philosophy, acquiring Housemarque (Returnal), Bluepoint Games (Shadow of the Colossus Remaster), and many others, most notably Bungie.
But three years into the PS5’s lifecycle, the strategy seems to be breaking down. That was on full display in the company’s third quarter earnings today. Sony only solid 8.2 million PS5s over the holiday, leaving it well short of its goal of 25 million for the year, with the gap between it and where the PS4 was at this time in its lifecycle only growing. While revenue was up, operating income (profit) was down, with the company blaming declining sales of first-party games relative to the prior year and big holiday discounts and bundles aimed at bolstering PS5 sales last year.
Sony’s current president and PlayStation’s interim CEO, Hiroki Totoki, gave his “frank” assessment to investors on the call, essentially implying what others have been saying for years now: the games cost too much, they take too long, and they aren’t bringing in enough new players. “Overall growth and sustainable profitability for increasing margins…how will that translate to these goals?” he said (via VGC). “I don’t think people understand that deeply. I think that is the problem of the organization.”
He continued:
People who work in the studios have very high motivation. They’re very highly motivated, they’re very good people, and they have great creative minds and knowledge of live streaming. However, having said that, when it comes to the business, I think there is room for improvement. And that’s to do with how to use money, the schedule of development and how to fulfil one’s accountability towards development–those are my frank impressions. I will continue to engage in dialogue with the people so that we can find the right way to proceed.
Totoki said the company will be looking to “go aggressive on improving our margin performance,” including by bringing more games to PC to improve sales. He noted that the theory used to be that expensive blockbusters were worth it to sell consoles, but with hardware and new players appearing to hit a wall, it’s clear the company needs to find more money from somewhere else. One place is PC, where the company just saw the simultaneous release of Helldivers 2 become a breakout hit on Steam. Another, as Niko Partners research director Daniel Ahmed points out, is live service games where the same small group of players can be tapped over and over again through microtransactions and season passes.
All of these concerns were echoed in many of the internal planning documents that leaked as part of the malicious hack at Insomniac Games back in December. Presentations by studio leadership suggested Spider-Man 2 went over budget and took longer than expected to make, with calls for keeping both of those things in check for upcoming games like Wolverine and Spider-Man 3. They also hinted at mandated cuts of dozens of staff from Sony, though they have yet to actually arrive and its unclear if those are still planned. But alongside the cancelation of The Last of Us Online, it made it seem like a reckoning is coming for the company’s existing first-party approach.
The proof is in what might have been the most surprising revelation from the earnings call: Sony has no big PlayStation Studios sequels coming until after March 2025. Other new projects are planned, including high-quality" original works and live service games, but for now the “virtuous cycle” appears to be broken.
Microsoft’s Valentine’s Day Tease
Microsoft announced its big “business update event” about the future of Xbox exclusivity will be a podcast. Microsoft Gaming CEO Phil Spencer, Xbox president Sarah Bond, and Game Content and Studios president Matt Booty, will talk about the future of the platform on the official Xbox podcast on Thursday when the next pre-recorded episode drops in the afternoon.
Since the initial frenzy of reporting and rumors, many insiders have been downplaying any big reveal like Starfield coming to PS5 later this year. But smaller games like Sea of Thieves, Hi-Fi Rush, and Pentiment now appear all but confirmed to be going multiplatform. The Sea of Thieves account put out a cryptic Valentine’s Day tweet teasing Switch and PlayStation ports of the long-running pirate sim, and The Verge’s Tom Warren reported that Renaissance mystery adventure Pentiment will be coming to Switch as well.
It seems like there are three different scenarios here. The first is that live service multiplayer games and smaller games not deemed to necessarily be system sellers will begin getting ported to rival platforms on a rolling basis. The second is that even core games from the back catalog like Gears 5 and Halo Infinite eventually find their way to PlayStation, but only years after the fact. The third possibility is that Microsoft opens up full multiplatform status within the first year of release for every upcoming game that’s from a “limited integration studio,” i.e. one of the ones it bought in the last five years. That third scenario is basically the nuclear option Xbox fans have been freaking out about. It also seems the least likely to me at this point.
Even demos are getting updates now
The Final Fantasy VII Rebirth demo had some visual issues, with many critiquing the performance mode. Square Enix has now released a patch to improve how the demo looks, with fixes carrying over into the full game arriving February 29.
Helldivers 2 patch 01.000.006 is out and addresses game stability, login issues, and disconnects. People who are too popular on PSN will no longer have the game immediately crash upon startup.
Suicide Squad’s latest patch nerfs a fun burn damage bug and the best XP farm in the game.
Factorio received a very small patch on Steam. The crafting sim’s tanks will no longer forget to consume fuel when the brakes are applied.
The Finals update 1.8.0 will reduce input latency on Xbox Series X/S. It also distinguishes cloaking noises for allies vs opponents now. No more jump scares when your friend goes invisible.
Apex Legends’ Breakout update is a big one. It rolls out a crafting 2.0 overhaul and in-match progression system. But those with 120Hz displays are in for the biggest treat. The battle royale will no let them play at 120fps on PS5 and Xbox Series X/S.
Final Fantasy XIV patch 6.57 notes include the following fix: “When certain visions are in progress in the island sanctuary, players will now be able to speak with the felicitous furball to receive hints about how they may be realized.” Also the Xbox Series X/S open beta begins February 21.
Party Animals patch 1.5.0.0 makes its Winter Cabin level less punishing. Players won’t freeze as quickly when leaving the center and will respawn more quickly once they do.
Granblue Fantasy: Relink patch 1.0.5 fixes a bug where players weren’t getting rewarded for breaking off boss parts. “Oh thank god,” wrote one relieved player on Reddit. “I was wondering why Furycane wasn’t dropping his hoof for how many times I broke its legs. Must have broken them 50 times over a few matches and got nothing.”
Review roundup: Mario vs. Donkey Kong
Nintendo’s Switch remake of the 2004 Game Boy Advance puzzle platformer, Mario vs. Donkey Kong, sounds like a rare miss for the handheld hybrid’s end-of-life victory lap. The game is $50, which feels like Nintendo conceding its not up to par with the Advance Wars or Mario RPG remakes but refusing to price it more competitively. There are two new worlds and a bunch of quality-of-life features, like a mode without a timer, but it otherwise sounds like a pretty rote exercise in repackaging an old product.
“Mario vs. Donkey Kong might not be as polished as a Mini-Mario toy fresh off the assembly line, but it's just as full of charm and fun to play with,” wrote Tristan Ogilvie for IGN, giving the game a 7/10.
“Thanks to a combination of quality-of-life improvements and visual flair that showcase what made those older games special, this Switch remake gives that original design ethos a new lease on life,” wrote a more positive-sounding Steve Watts at GameSpot, also giving it a 7/10.
“As was the case with last year’s Super Mario RPG, I get the feeling that this is strictly business for Nintendo; it’s a pure product. As I play through it, I flash back to the final years of the 3DS, where Nintendo insisted it would keep supporting the product despite moving on to Switch,” wrote Giovanni Colantonio at Digital Trends, giving it three out of five stars.
“Mario vs. Donkey is a good game and this is a good new version of it. There’s just one problem: It’s not the best game in its series. And that game, which is getting seriously old and is currently hard to play, would have made a much better subject for this kind of remake treatment,” wrote Oli Walsh at Polygon.
“Mario vs. Donkey Kong is a hybrid puzzle-platformer which, while well-crafted like most Nintendo games, never truly excels within either genre and, remade in 2024, doesn’t feel challenging enough to cater to experienced players,” wrote a similarly disappointed Andy Robinson at VGC.
An ex-Overwatch 2 dev with a nightmare story about Blizzard and game company bureaucracy
Former Blizzard VFX art lead Chris Sayers went viral last week after posting a thread on Twitter claiming the company promoted him in 2023 but refused to pay him more. After months of being given the runaround, he eventually resigned, only for Blizzard to enforce a rare noncompete clause in his contract, leaving him salary-less while he was in-between jobs for two months. I recently interviewed him. Here’s a brief excerpt:
Me: A few months later, the the layoffs hit, at least 1900 across all of Microsoft and Activision Blizzard. I'm not sure exactly what the number was from Blizzard but there are definitely many people on the Overwatch 2 team, for instance, who were laid off. Do you feel like because of your specific role and the work you were doing that you probably would have been kept? Or is there a sense that you could have ended up going in these circles for three more months, and then just been laid off anyway?
Chris Sayers: Yeah, that last one. I definitely feel like I would have been laid off. Because I mean, obviously, I know that I can't really know, but like I said, at the beginning, I think there was me and one other person who were long term international remote. And that other person was laid off. And I was like, well, I feel like that would have been me too. Because based on the team that I was working on, based on the working arrangement that I had, I feel like I would have just been cut immediately, even though they are desperate for VFX artists and need them. I feel like just based on this kind of stupid business rigidity of being like., “No, no, we've announced RTO, that's the kind of way that we want to work going forward, therefore anyone who's kind of essentially causing a nuisance like me just get rid because it's easier that way. And like loads of other people that were remote were also laid off. And like I said, loads of other people that were working on my team on events and missions, they were laid off. So it just feels targeted to very specific sections.
You can listen to the full interview where Sayers calls what happened to him “standard practice” at Blizzard, on this week’s podcast episode which should arrive on Friday. A spokesperson for Activision Blizzard declined to comment.