There’s a really important piece of context that looms behind every decision, every announcement, and every news story about PlayStation or Xbox at the moment. It’s a ticking clock; a countdown to the moment when Sony and Microsoft are going to have to start talking about their next-generation hardware – and begin the process of convincing the world that an almost certainly astronomical price point isn’t a deal-breaker.
That’s going to be a difficult task under any circumstances. Game consoles do offer genuinely good value in terms of the hours of entertainment they provide over their lifespans, but the market for them is price-sensitive nonetheless. If PS6 ends up coming in at twice the launch price tag of the PS5, or perhaps even more, it’s going to be a tough sell. Not an impossible sell – but both companies will need to use everything at their disposal to bring consumers on board at those kinds of prices.
Damage to a company’s public image makes it substantively harder to get people to spend their discretionary money on your products
One of the most powerful tools at their disposal is going to be customer goodwill. As nebulous as “goodwill” can sound at times, it’s an incredibly powerful force in a totally discretionary market like videogames. People’s buying choices are deeply influenced by their feelings about companies and brands. Damage to a company’s reputation or public image makes it materially, substantively harder to get people to spend their discretionary money on your products.
You’d think, then, that both PlayStation and Xbox would be on a charm offensive right now. Knowing just how much goodwill is going to be burned when they announce their next-gen price tags (or, alternatively, reveal the deep compromises they’ve had to make to keep those price tags in a sane range), both companies ought to be deeply focused on ensuring their reserves of that goodwill are topped off by any means available to them.
That context is important, I think, to understanding the odd little drama that played out this week over Hideo Kojima’s upcoming game, Physint. Originally announced at one of Sony’s State of Play events back in early 2024, the game was intended to be the next major collaboration between Kojima and Sony following Death Stranding. Sony’s Columbia Pictures division was also involved in some capacity. This week, however, Kojima Productions revealed that Sony had dropped the project, leaving the company seeking a new publisher for the game; Xbox Game Studios promptly swooped in to pick up publishing rights.
Taken in isolation, there are certainly two valid sides to this story. Death Stranding was generally very well received critically, but the franchise was not a particularly big commercial hit; sequel title Death Stranding 2: On The Beach reportedly sold around 2 million copies. Physint, meanwhile, was shaping up to be a massively expensive development project – Kojima hinted in an interview last year that the game was still five or six years out from launch. It’s not hard to see why Sony executives would weigh that likely budget in one hand and the commercial performance of Death Stranding in the other and decide to drop out – and reporting by Bloomberg today suggests that’s exactly what happened.
It’s also, however, easy to see why Xbox would swoop on the title. Kojima’s name still carries enormous cachet, and Physint, as his return to the stealth-action genre of Metal Gear Solid, is a far surer commercial bet than the very experimental and downright weird Death Stranding ever was. Hollywood directors and actors talk about doing big blockbuster movies as a way to ‘pay their dues’ so that studios will fund their artistic passion projects – in this case, Sony appears to have betted big on Kojima’s arthouse project and then passed on his likely blockbuster. Even if their commercial calculation was valid, the optics of dropping an original IP from one of the most famous game developers in the world and letting their competitor pick it up aren’t great.
We’ll probably have to wait half a decade to see whether Sony or Microsoft made the better choice
Ordinarily, you could shrug and leave it at that. After all, we’ll probably have to wait half a decade to see whether Sony or Microsoft made the better choice in this situation. What we won’t have to wait half a decade for, though, is the aforementioned moment when these companies try to make the case for what will almost certainly be the most expensive consoles ever launched. One Kojima project won’t make or break the PS6, but dropping a previously announced high profile original game and having Xbox pick it up is a slowly seeping crack in the wall of that tank of goodwill they’re going to need to draw on so heavily for their next-gen launch.
It’s far from the only crack in that tank. Despite the very solid sales of the PS5 – which is approaching the 100 million mark, though price hikes are probably slowing its progress somewhat – Sony has had a pretty rough ride in some other respects in this generation, often in ways that have tarnished its brand and reputation with its customers to some degree.
Much of this is due to the ongoing fallout from the company’s ill-conceived pivot to live service development, which left it with big, embarrassing failures like Concord, a litany of negative stories about its seemingly dysfunctional multi-billion dollar acquisition, Bungie, and a weak first-party release slate due to resources being focused on live service games that mostly never saw the light of day.
Most consumers don’t pay attention to the behind-the-scenes decisions that led to those outcomes, but they certainly see the outcomes themselves. Concord is practically a meme at this point, as is the general sense that PS5 has had a disappointing game line-up compared to its predecessor – and if any company should know the power of negative memes, it’s the one that saw the wind taken out of the sails of its PS3 launch by endless memes mocking the awkward bombast of its E3 show and Ken Kutaragi’s claim that consumers would “work more hours” to afford the expensive system.
It does feel like the company underestimated the strength of feeling on physical discs
It’s not that Sony isn’t aware of the need to shore up goodwill around the PlayStation brand. You can see various ways in which it’s trying to manage goodwill, such as how it’s been frontloading bad or controversial announcements. Notifying the world about the end of physical disc releases so far ahead of the early 2028 date when it will happen, for example, was an attempt to get the contentious discussion about that issue over and done with so that it doesn’t become the focal point when PS6 is announced and has no physical media support. It does feel like the company underestimated the strength of feeling on that issue; the strategy of establishing it in the public mind well ahead of the console announcement makes sense, but it’s another leaking crack in that goodwill tank nonetheless.
Microsoft, for its part, is coming from a much weaker starting point but seems to have understood the assignment very clearly in terms of goodwill. Almost everything Asha Sharma has done since taking over has been focused around rebuilding goodwill for the Xbox brand – with the glaring exception, of course, of the sweeping redundancies announced recently, though the timing of that may also be an example of frontloading bad news to some extent. Picking up another big Kojima title fits well alongside crowd-pleasing moves like dropping the price of Game Pass subscriptions or getting work underway on a new Fallout title.
The real challenge for Sony may be that there’s a sharp divide between what the PS5’s numbers say – suggesting a platform and brand that’s still on a roll from the very successful PS4 era – and what the mood music around the brand feels like for consumers. The aforementioned problems with the messaging around the PS3 launch show us that this has historically been risky territory for Sony; it doesn’t do humility well when it feels like it’s in a position of strength. It will need to learn; it’s soon going to have to ask a great deal of its loyal customers, and anything that chips away at that loyalty in the meanwhile has the potential to do far more damage than it may seem on the surface.