Sony goes into battle against Xbox with new PlayStations

The chief executive of Sony’s PlayStation, Jim Ryan, predicted that the company will come out on top in a head-to-head battle with Xbox, even though its Microsoft-owned rival is pitching a lower-cost gaming console for the holiday season.

Sony announced on Wednesday that it will launch two new PS5 consoles including a cheapest option, without a disc drive, at $399 — $100 more than the equivalent Xbox Series S. A version with a disc drive will be priced at $499, matching the Xbox Series X, however.

“Price is obviously a factor, I’d be a fool to deny that,” Mr Ryan told the Financial Times. “I’m not arrogant enough to say that our approach is the right one and other approaches are wrong . . . But the history of our industry — with lowest specification consoles designed to hit a particular price point — is not a very happy one. We’ve had experience in that ourselves and it’s not something I care to repeat.”

The consoles will be available on November 12 in the US and Japan, just two days after the new Xbox.

The launches come amid reports that Sony is having coronavirus-related production difficulties and would have to cut its production forecast for the year to March 2021 by millions of units.

Mr Ryan said the reports were “unequivocally not true” and “wrong by an order of magnitude”.

Ampere Analysis, an analytics group, projects that Sony will ship 10m PS5 units within six months of launch — about a third more than PS4 sales seven years ago. By the end of 2021 Ampere projects Sony will have sold 17.9m PS5 units, versus 13.5m for Xbox.

The consoles will be available on November 12 in the US and Japan

Mr Ryan did say Sony would be using aircraft to ship PlayStations for the launch. “It’s a price we’re prepared to pay,” he said. This could imply that the company is trying to catch up from production delays, since it costs more than shipping by sea.

“There are hundreds of things we worry about as we move towards launch, but right now, in the Covid world, it’s a tremendous achievement to have more PS5s available to sell than we did PS4s at the equivalent time.” 

Sony said in January that it had sold 106m PS4 consoles since its launch in 2013, along with more than 1.1bn games. Microsoft does not give console sale figures but analysts estimate that Xbox sales are less than half the size.

Mr Ryan, who joined Sony in 1994 and became head of its gaming business in February 2019, said he was confident that PlayStation would continue winning the console war based on the strength and diversity of Worldwide Studios, its 14-studio development hub behind games such as The Last of Us and Gran Turismo.

“We prefer a more nuanced approach, trying to figure out what the different segments of our community want, and come up with a tailored way of meeting their wants and needs,” Mr Ryan said.

But the competition between PlayStation and Xbox is moving beyond console sales. Microsoft has put more of an emphasis on subscription models such as Game Pass, a Netflix-style gaming service, and All Access, its console and games bundle sold for $25 a month over two years.

“Microsoft is taking a more long-term approach,” said Piers Harding-Rolls, director of games research at Ampere. “It’s focusing more on services, reaching a broader audience beyond the console. It’s number one target is monetising games, not necessarily selling the biggest amount of consoles.” 

Sony, too, is seeking to reduce its reliance on console sales. Of the 113m monthly active users on the PlayStation network, 45m are paying subscribers on its Plus programme and 2.2m people stream games through its Now membership on PCs and the PS4.

Mr Ryan said he expected that “for a number of years there will be tens of millions of PS4 gamers who will continue to be engaged, who won’t transition to PS5, and we are totally cool with that”.