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Sony Targeting Hard Core Gamers In Its Fifth-Generation PlayStation

Sony Corp (NYSE:SNE) considers Microsoft Corp (NASDAQ:MSFT) as its primary competitor with Alphabet Inc.’s Google (NASDAQ:GOOG) also being a threat to it is next-generation PlayStation. However, the company’s market strategy against these competitors is already in place despite the latest PlayStation being over a year. The strategy is to concentrate on hard-core gamers that are obsessed with new features.

Sony’s next-generation PlayStation

Kenichiro Yoshida, the CEO of Sony, has said that PlayStation is a niche product focused on serious gamers. During the company’s strategy meeting, the CEO stated that details when developing the games are more important now than ever. The company discussed the specifications of the next-generation PlayStation, which include “ray tracing” that is applied for lighting effects like displaying light on the faces of characters when they are in a candlelit room.

PlayStation, which was once a side project for Sony, has now become the company’s leading consumer product. In the last fiscal year, the company’s PlayStation division that includes videogame subscriptions generated revenue of over $21 billion with an operating profit of around $3 billion. Because of this contribution, the company sees their fifth-generation PlayStation as a vital component to its outlook and analysts expect the PlayStation to be available in the 2020 holiday season.

For more than two decades PlayStation had been among the most prosperous mass-market products and this year alone PlayStation 4 is likely to surpass 100 million units. The latest strategy of Sony emphasizes a more profitable segment rather than overall sales.

Competitors to next-generation PlayStation

The fifth-generation PlayStation will face competition from Google which is building a new service dubbed Stadia from November. The focus of Stadia is on games that don’t require any hardware and can be streamed directly from the cloud. Equally Apple Inc. (NASDAQ: AAPL) also has plans of launching a videogame service called Apple Arcade.

Microsoft has equally announced that their next-generation Xbox will be ready by the 2020 holiday. On Nintendo Co., a company official; indicated that they are not seen as a competitor because most of its users are drawn from a younger generation relative to the core demographic of PlayStation.

Published by Ruchi Gupta

Swati Goyal has over 6 years of experience in financial research & analysis domain. She has built financial models varying from consumer goods to banks. She has her articles published in leading dailies of the nation

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