With household expenses on the rise, gaming titans like Sony are reassessing their targets and in Sony’s case, cutting PlayStation 5 prices in a bid to shift closer to what consumers can spend.
Since 2017 and the debut of Fortnite, gamers have spent three times more on console software than on subscriptions and virtual items, but the rising cost of living is now making consumers hesitate before clicking purchase.
Still, it’s not all bad news. This year alone console players are estimated to spend about $21 billion on in-game items and subscription services with research group Ampere Analysis revealing global revenues from console games are projected to increase by 1.3% to $42 billion this year.
Additionally, the total market including hardware, is anticipated to grow by about 5% to $61.5 billion.
According to the chief executive of Electronic Arts Andrew Wilson, he predicts their “live” services to be a “strong tailwind” for the publisher he told analysts on an earnings call this month.
“Live services titles absorb all the engagement” among gamers, said Piers Harding-Rolls, head of games research at Ampere.
“That makes it a different and harder environment [for games publishers and developers] to compete within.”
The popularity of “live service games” like Fortnite does not appear to be slowing down, while in contrast, traditional console publishers like Activision Blizzard and EA have had to try to change with the market to usher in this new era.
Sony is also having to adjust.
“The world has moved on from the console model that Sony is offering,” said Gareth Sutcliffe of Enders Analysis.
He added that the PlayStation maker had “rigidly stuck” to their old way of doing business which included having high costs of hardware and content.
According to Sony’s chief operating officer Hiroki Totoki, August’s PS5 sales were showing “somewhat less than the expected progress” as they were pursuing their selling target of 25 million units this fiscal year.
At this time, Totoki stated “accelerated penetration of PS5 hardware” was “one of the highest priorities” for Sony.
The period before Christmas will be telling for the gaming titan because while Sony has a nice amount of content set to release like PlayStation exclusive Spider-Man 2, the consumer market continues to decline.