August 26, 2022
Hello and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Friday, we’re discussing Sony’s bombshell news yesterday that it’s raising the price of its PlayStation 5 in most markets to combat inflation and other economic pressures. Also: what to read, watch and play this weekend.
The PlayStation 5 has, overnight, become even harder to get in most places around the world. Not because of supply issues, though those persist, and not because of re-sellers or bots or another middleman keeping Sony’s game console from the masses. Instead, it’s Sony’s own doing in the form of an unprecedented price increase of about 10% in most markets around the world, save the U.S.
It’s an alarming turn of events for the company’s gaming division that, until this year, had been riding high on the success of the PlayStation 4, as well as a strategy of exclusive games and a lucrative ecosystem growth on the backs of big hits like Epic’s Fortnite and Activision’s Call of Duty. PlayStation’s golden age may very well be over.
Sony is feeling the pain. Like many of its peers in the game industry, Sony is experiencing a drop in sales after two years of booming pandemic-era growth. The company hasn’t released a major exclusive hit since God of War and Marvel’s Spider-Man in 2018, and supply issues have hamstrung the growth of the PS5. Consumer spending on games is now down across the board.
PlayStation’s larger issues are more existential. Sony will undoubtedly weather the current storm, and the PS5 price increase is designed to help it do so. But the company is facing a bigger threat: industry changes to game distribution in the form of cloud streaming and subscription services pushed by a much more formidable Microsoft.
Sony has room to bounce back. The company’s PS5 is still the leading console platform of the new generation, and Sony has plenty of reasons to be hopeful for the future of its gaming business.
— Nick Statt
Why on-demand talent could be exactly what companies need right now: If you thought the rise of remote work, independent contractors and contingent workers rose sharply during the pandemic, just wait until the next few months when you see a higher uptick in the on-demand talent economy.
“Lost Ollie” — Netflix. Lost or discarded toys trying to find their way back to their owners is a tale as old as time, and there have been what feels like a dozen “Toy Story” movies dealing with the same subject. Still, Netflix’s new limited series “Lost Ollie” stands out from the crowd with its own take on growing up, the fleeting nature of childhood memories and the types of adventures only children and the young at heart can undertake. A great four-parter to watch with your little ones this weekend.
"The Joe Rogan Experience": Mark Zuckerberg — Spotify. Think of Joe Rogan what you will, but when Zuckerberg sits down with the podcaster to share some exclusive news (Project Cambria is coming in October) as well as his thoughts on Meta’s hardware strategy, the emergence of VR fitness (“It happened way sooner than I thought”) and the future of visual computing and brain-computer interfaces, you kind of have to tune in. Just be warned: The whole conversation is almost three hours long!
Netflix Heads Up! — App Store, Google Play. The charades game “Heads Up!” has been a hit on iOS and Android for some time. Now Netflix has licensed the title as part of its growing mobile games initiative. But instead of replacing the existing version, the video service simply released a Netflix-specific version with tons of charades prompts related to shows like “Stranger Things,” “Bridgerton” and “Squid Game,” as well as categories like “Strong Black Lead,” “Netflix Family” and “True Crime.” It’s a fun game to play with all the TV and streaming nerds in your life. A Netflix subscription is required.
The Great Consolidation of the Video Game Industry — The Ringer. Microsoft wants to acquire Activision Blizzard for $68.7 billion. Take-Two has spent $12.7 billion to acquire Zynga. Sony has paid $3.6 billion for Bungie. All together, the video game industry has seen 651 transactions totaling $107 billion during the first half of this year alone. Will this trend continue, what is it driven by and what does it mean for game developers, players and the industry at large? In this deep dive, The Ringer explores the age of the gaming mega mergers, and it’s well worth a read.
— Janko Roettgers
Why on-demand talent could be exactly what companies need right now: The biggest benefit of leveraging on-demand talent is often tapping into the talent and skills that businesses can’t find elsewhere. Upwork’s recent report highlights that 53% of on-demand talent provide skills that are in short supply for many companies, including IT, marketing, computer programming and business consulting.
Thoughts, questions, tips? Send them to email@example.com. Enjoy your day, see you Tuesday.