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Evolving the PS4 - and the Console Business

The launch of PS4 Pro was muted - Sony is walking cautiously on unfamiliar territory. How this plays out will decide the future of the console business

Halfway through Sony's announcement event for its new consoles - the redesigned, slimmer PS4 and the new, more powerful PS4 Pro - I found myself thinking about the optics of these events. I've seen the announcement events for every console since the PS2, and of them all, this was by far the most muted. The lack of bombast and braggadocio could speak to a quietly understated confidence, or to uncertainty, depending on where you're standing. I suspect that the truth lies somewhere in the middle - Sony, achieving success it hasn't seen since the PS2's halcyon days, is certainly confident, but is also walking out onto uncertain territory with the PS4 Pro. The ground underfoot is no longer familiar.

The slim PS4, of course - perhaps the worst-kept secret in the history of the industry, given the appearance of functioning models on auction websites prior to the announcement - is nothing unexpected. Three years into the PS4's lifespan, a slimmed down redesign was inevitable; it joins the (arguably rather more attractive) Xbox One S on the shelves as a sleeker model whose launch is somewhat overshadowed by impending obsolescence. Xbox One S, at least, has a year to run before the hugely more powerful Scorpio appears on the market. The new PS4 suffered the ignominy of being quickly announced and forgotten just moments before the unveiling of PS4 Pro, the device destined to replace it.

PS4 Pro, though, is a curious beast. It'll run you $100 more than the slim PS4, it plays the same games and connects to the same online services. Sony has bent over backwards to avoid fragmenting their playerbase, and in theory, PS4 Pro is really designed only for the small minority of consumers with 4K displays in their living rooms. Yet the company must know the psychology of its consumers; it must know that for a large proportion of them, playing a game on a regular PS4 in the knowledge that an upgrade would make it that little bit sharper, that little bit smoother, is like Chinese water torture. That will only be exacerbated by the "Pro" moniker; so much of the market will feel an involuntary twitch of consumer desire at the very notion of their existing hardware being "amateur" or, god help us all, "noob".

"so much of the market will feel an involuntary twitch of consumer desire at the very notion of their existing hardware being "amateur" or, god help us all, 'noob'"

Ultimately, though, Sony's cautious approach seems to be pitched just right. Those who will find themselves discombobulated by the notion of a needlessly dropped frame or a disappointingly undetailed hair strand, or quietly fuming at being branded a non-Pro, are precisely the audience expected to upgrade anyway. The benefits of PS4 Pro will be sufficient to keep them satisfied; while for pretty much everyone else, for the enormous audience of more casual consumers that Sony must access in the coming years in order to maintain the PS4's sales trajectory, the benefits of the Pro seem minor enough not to bother with. The stroke of genius, perhaps, is that every upgrading gamer will release a second-hand PS4 into the market - handed off to a younger sibling or cousin, perhaps, or sold to a late upgrader from the last generation. That ought to do wonders to kick-start the PS4's demographic expansion.

That's not an easy balance to strike, and while it feels like it's been skilfully done, only time and market data will tell. Sony enters Winter 2016 in a position of almost unprecedented strength; Nintendo's NX won't launch until next spring (and nobody really knows what it is), while Microsoft's lovely Xbox One S is overshadowed by the plan to entirely outclass it with Scorpio next year. Both PS4 and PS4 Pro will do great guns this year (while PSVR, about which more in a moment, will undoubtedly be supply constrained). That's not the real test; the test is how this line-up can fare against 2017's launches, NX and Scorpio. Sony's cards are now on the table for the next couple of years of the console war.

The other test, of course, is how this evolves. Much has been made of PS4 Pro representing the end of the console model; a final nail in the coffin of the five, seven or even ten year hardware cycle which has defined game consoles since the 1980s. Incremental updates like the PS4 Pro, maintaining compatibility and continuity while keeping pace with hardware advancements, are the future.

Well, perhaps they're part of the future. Scorpio, with its dramatic upgrade over the Xbox One - so dramatic that the notion of Xbox One remaining fully capable of playing Scorpio titles seems ridiculous - suggests a somewhat different future. Equally, the muted nature of this week's launch is suggestive of somewhat different thinking. Sony didn't want to come out all guns blazing, shouting in triumph about its new hardware, because it cannot afford to alienate the 40 million existing owners of PS4 by implying that their consoles are obsolete. That's a radical difference from console launches of old precisely because the whole purpose of those launches was to declare everything which came before obsolete. "Here, here is the new thing! All singing, all dancing, making the singing and dancing your existing console is capable of look merely like painful hopping and wheezing! Buy the new thing!" You can't do that with an incremental upgrade; you can't alienate your existing market in that way. Even smartphone makers have more freedom in their messaging, knowing that their hardware is expected to run on an 18 to 24 month upgrade cycle; consoles, though, you expect to remain "current" for four years, five years or more.

"Sony didn't want to come out all guns blazing, shouting in triumph about its new hardware, because it cannot afford to alienate the 40 million existing owners of PS4 by implying that their consoles are obsolete"

Incremental upgrades, then, lock us to a much more muted kind of message about new hardware. Does anyone really believe, though, that there's no PS5 in the works? No grand, sweeping upgrade, that will be unveiled with bombast, and fireworks, and promises of walking on water and improbable feats of catering involving bread and fish? Of course that's in the works. If PS4 Pro points us at something, it's at the possibility of compatibility across generations in the very broad sense - perhaps, at last, we have entered a generation of consoles whose games will remain playable pretty much forever, or at least for as long as the capricious DRM gods smile upon us. The reverse, however, cannot remain true forever. Console generations will continue to roll past; it's just that now, perhaps, there will be more mezzanines and landings between the floors.

Notably absent from Sony's quiet little event was PlayStation VR. Oh, there was a logo, and there were a few words said, but you'd hardly imagine that this was a massive product launch that's happening in just a few months' time. Perhaps that's because the aspect of PS4 Pro Sony is most anxious about is what impact it's going to have on PSVR, and vice versa. Ever since the first leaks about PS4 Neo, as then was, hit the wild, there's been a widespread assumption that part of the raison d'Ítre for the new hardware was to drive PSVR headsets - with the existing PS4 simply being underpowered as a VR device.

If that's not the case, Sony could have done a better job of pointing it out. Throwaway comments about the PS4 Pro yielding better frame rates for VR software sit uncomfortably with the company's earlier pronouncements about 120Hz rendering for PSVR. Everything we've seen and learned about VR thus far suggests that this tech is all about framerate; if you can't hit a consistent, high frame rate, users start to get severe motion sickness. If it's the case that PS4 can hit those frame rates consistently, but PS4 Pro allows more visual finesse at the same frame rate, that's great. If, on the other hand, PS4 is struggling with frame rate and PS4 Pro smoothes things out, that's a big problem. PSVR cannot afford to be a poor experience on the existing PS4 installed base; if it is to be a success, it needs to work superbly on the 40 million PS4s already in the wild, not just on the fraction of the installed base which will be PS4 Pro.

Perhaps it does. Certainly, the demos of PSVR to date - all presumably running on PS4 standard hardware - have been fine, for the most part. Again, though, the optics are problematic; if you're launching a VR headset within weeks of launching more powerful hardware, people are going to assume, not unreasonably, that they're meant to complement each other. If that translates into users of the headset on stock PS4s getting physically ill where users on PS4 Pro do not, that's a very big problem - and if that's absolutely not the case, and there are procedures in place to prevent it, Sony needs to be discussing those things candidly and openly. (If it is the case, they might have been best served by doing something radical like only taking PSVR pre-orders alongside PS4 Pro pre-orders; let VR be the USP of PS4 Pro, and avoid the possibility of backlash from underpowered VR entirely.)

With the cards on the table, now we see how the hand plays. PS4 Pro is undoubtedly a shake-up to how the console business works. It's one step closer to a world where console hardware is essentially a fixed-spec PC in a nice box that's updated every few years - but we're not in that world yet, and whether we ever arrive there will be determined by how Sony and its rivals fare in the coming 18 months.

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Latest comments (4)

Todd Weidner Founder, Big Daddy Game Studio10 months ago
Great article Rob, I think you articulated this whole Pro roll out perfectly.
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John Karageorgiou consultant 10 months ago
Agree with @Todd, this is a very thorough and insight-laden article. Well done Rob.
I currently own a PS4 and am deliberating on the merits of pursuing the Pro route versus waiting out for the Scorpio to launch. So much to think through before committing to a console brand, and this article has outlined a few interesting considerations to help me make a more informed decision.
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Pete Thompson Editor 10 months ago
The bias towards anything PS on this site still astounds and saddens me, and it's just laughable that you keep denying any bias exists. .
I'd like to think that we'll see a similar (albeit impartial) article on Microsoft and Xbox evolving their console business with the Xbox One S and Scorpio, but I just cannot see it happening on here which is a shame considering the site is supposed to be an impartial site supporting the games industry as a whole and not just supporting those that staff favour.

As for this
"Scorpio, with its dramatic upgrade over the Xbox One - so dramatic that the notion of Xbox One remaining fully capable of playing Scorpio titles seems ridiculous"
I guess you missed the part in Scorpio's announcement at E3 about the Xbox One, Xbox One S and Scorpio consoles all being part of the same family and able to play all games and use accessories across all of them, no?

Edited 2 times. Last edit by Pete Thompson on 9th September 2016 7:26pm

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Klaus Preisinger Freelance Writing 10 months ago
Looking at the technical side, one quickly realizes that Sony and MS are unique business models more than they are technological competitors. The era of custom chips and design eccentricities in consoles is over, the hardware is much closer to stock PC hardware, the more traditional cycle of PC hardware is what wee are seeing now as a result.

The real power of Sony and MS is having enough brand and company confidence to mass produce consoles on a scale that other PC OEMs do not match at the moment. Technically speaking though, HP, Dell, Asus, etc. could do the same and release their own console. They too can go to AMD, Intel and Nvidia and mash something together as they often do; but on the laptop market instead of the console market. Chinese suppliers showed last Computex that they can supply willing companies with Intel/Nvidia one board solutions. If you have the pocket money to buy a few million of these, you can absolutely release your own console more powerful than PS4 pro and/or Scorpio.

However, Sony and MS also a working living room OS with enough walls to make money on licensing, while all the PC OEMs do not have that. Sony and MS have development ties, tools and business models. That is their real difference compared to the PC OEMs. The operating system is what opens up the possibility for an entire revenue model. Make your profits with other people's software, while using the hardware price to barely break even and shield against PC OEMs whose profits have to come from selling the hardware. Even if OEMs had their own OS, they still need third party developers to support it.

Valve being the only company working on such a business model in the form of SteamOS, but they are no PC OEM as prices for Steamboxes have shown. You are only as strong as your operating system and your Chinese hardware supply chain put together.
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