I wish publishers would invest more in a place like Poland or China, where dev cost are less but can punch above their weight. Also you don’t need 300 million to make a good cinematic third person action adventure game, evidence? Look at Alan Wake 2, Plague Tale Requiem and probably Hellblade 2.
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China is waaaaay too big a risk to pour big money into
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For a console manufacturer, it’s a little more complicated than that. Exclusives are also what make people choose one platform over another.
If Spider-Man or Naughty Dog games can convince several million gamers to choose PlayStation over Xbox, the return on investment from these big titles will also come from all the third-party games bought by the gamers in question, via the 30% commission levied by Sony.
In principle, it’s quite similar to what Xbox does with its Game Pass, offering a very low entry price to expensive in-house productions, but making up for it on microtransactions or third-party games (on consoles).
There are certainly major imbalances in Sony’s model, which is too uniform and weakened by the explosion in development costs, but ROI is not the only relevant indicator for judging the ‘profitability’ of these games. Just like direct sales for Xbox.
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There’s lots of places to go before then anyway. We can look at the obvious in Eastern Europe where salaries are much lower and political risk is lower as well.
And of course there’s huge swaths of North America/Western Europe that aren’t California and Seattle where costs are driven by insane tech wages. BioWare was one of the best developers ever and did it from Edmonton of all places. If a series like Mass Effect or Dragon Age can come from a mid-sized Canadian city that’s freezing cold half the year why can’t any other reasonably affordable locations be chosen for studios?
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Also aren’t Ninja Theory basically in the business of making mid size budget games too? I don’t think Hellblade 2 costs as much as a GOW or TLOU ( I could be wrong) and the team making it is far smaller.
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They are. Also gotta account for differences in salaries and asset purchase/maintenance in US spec California, UK and other Europe AAA can probably be on a lower end of budgets at similar headcount.
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I wouldn’t be counting on Poland being a ‘cheap’ way to develop games in the medium term. It has been growing at a steady clip for years now.
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It looks like Sony wants a fighter game.
It also is interesting to read people’s comments, how they say PlayStation is doing better than ever before and Xbox is the one in trouble.
I want both PlayStation and Xbox to be successful, but it should be concerning with how little profit Sony is making from games like Spider-Man, yet for whatever reason people think Playstation is doing better than it ever has.
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Denial is a hell of a thing…
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For the record, FY21/22 and FY22/23 are quite similar to FY18/19.
Margins can certainly be improved and the business model needs to evolve, but Sony’s profits have never been as high as they have been in recent years.
So is Microsoft, even before ABK, but the point people are making is not Sony is “doomed”, but their growth is stagnant, their games, although selling well, has lower margins of profits due to rising cost of development, and that they are reaching the limit of the console market( hence the stagnant growth despite record sales of PS5). Things might look ok now, but not in the future, and that is why they are pivoting to a “multiplatform” and the “live service” strategy. It’s all in the leaks.
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They’ve spent a metric ton of money to bring in that, with margins as low as they are for Sony they can’t afford to take risks.
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I agree with all that, but how is it a denial to claim that Sony has never done as well as it has in recent years? That’s precisely the point I was responding to.
The future probably looks more difficult for Sony, but the firm’s recent results are irrefutable.
Probably less than 10% of what MS spent on Bethesda and ABK. 
Is it better to generate 1 billion in revenue with a 20% margin or 10 billion with a 10% margin? The margin comparison between Sony and Xbox could only be made over one financial year, and that was the year of the Bungie acquisition, which did not work in the Japanese company’s favour. Sony is far from being on the brink of collapse, so let’s not jump to conclusions.
Never said they were, so lets not go putting words in others mouths.
No one was saying that they were doing bad, people are saying that Sony’s growth is stagnant and that it might lead to negative consequences in the future. I mean this comes from Sony themselves, based on the leaks and their current actions/plans.
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People need to stop being so black and white on this stuff, there’s a middle ground, people expecting Sony to crumble or something along those lines are being silly but it’s also not good to bury heads in the sand and act like everything is hunky dory
Their one platform focused strategy, as well as having a line up that has focused almost entirely on single player AAA bangers that have tripled in costs in just a few years and are only going up is not a sustainable one and is not one that shareholders are going to care for
The console market isn’t growing and MS have wisely invested in franchises that appeal across many different platforms, console is important but at best it’s going to stay with the same stagnant growth when things like PC/mobile continue to grow every year
This isn’t an MS good, Sony doomed outlook but just a reality that MS have are better set up for the long term, very interested to see what happens with their mobile launch this year
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I know and I repeat, that’s not what I was responding to.
Already happening. Naughty Dog just had a game cancelled, SIE are prepping for layoffs and a studio closure. Its not going to improve.
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No, we have Xbox execs making comments about their margins being higher than Playstation’s in 2020, 2 years before the Bungie acquisition.
Both Xbox and Playstation have a tough situation, with Playstation’s margins being at around 5% and Xbox in “high single digits”. But since Xbox is operating from a position of much lower marketshare, their path to high profitability is probably more straightforward than Sony’s.
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Seriously. The original post reads like some sort of “totally deep zinger” that completely misses the fact that profit margins are terrible on Sony projects - it doesn’t matter how much revenue you make if it’s little to no profit 
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