Looks Like We're Nearing Peak PlayStation

04.03.2024 - 02:08 / tech.hindustantimes.com / Jim Ryan / Hiroki Totoki / Sony / Nintendo

It should have been a victorious few weeks for Sony Group Corp.'s PlayStation 5. Final Fantasy VII Rebirth, arguably the console's first must-have exclusive title, has been released to rave reviews. Microsoft Corp. has just announced it will allow games previously exclusive to its Xbox machine on rival platforms, tantamount to an admission of defeat in the console wars. And reports swirled that a successor to Nintendo Co.'s Switch is still more than a year away. 

Instead, the noises coming from Sony sound more like a company that's struggling. After a surprise declaration at its recent earnings that the PS5 had all but peaked — with hardware sales set to “gradually decline” next year as the three-year-old console enters its “latter stages” — the company is cutting some 900 jobs worldwide in its gaming division, and shutting down several titles in production. 

Worse for gamers, the firm admitted that the PS5 will see no new major first-party titles until at least April 2025 (Final Fantasy is published by Square Enix Holdings Co.). Thanks to the time-warping effect of the pandemic, the PS5 still feels new, but it's already at a point where it should be hitting its prime. 

The Japanese firm is merely suffering from a problem that plagues the entire industry: Development cycles and budgets are out of control. Final Fantasy VII itself is the perfect example. The original game, released on the PlayStation back in 1997, had a reported spend of around $40 million, a huge amount at the time, and took a little over a year to pull together. The remake is so colossal it's been split into three separate games, of which Rebirth is the second chapter. One estimate put the budget for the first chapter, which was released four years ago, at $140 million. 

It's not sustainable. And Sony President and Chief Financial Officer Hiroki Totoki has signaled he wants to rein in costs. He recently took direct control of the gaming division on an interim basis, bringing power back to the firm's Japanese base after several years of being headed by Englishman Jim Ryan. 

And it sounds very much like Totoki didn't like what he's seen. He told reporters that first-party studios needed to better understand profit generation and improve their expenses. Combined with the layoffs and closure of Sony's London studio, the message seems clear: The company is getting too little bang for its buck, with one of its most high-profile studios having only made one new game in the last eight years. 

It's a similar story at Nintendo. Multiple reports say that the successor to the Switch, which had been expected to hit shelves this year, won't be released any earlier than March 2025. According to the Nikkei newspaper, the Mario maker wants to give