Could Sony Be Moving To A Two-Tier Console Model Next-Gen?

     With all the supposed "leaks" over the last few weeks and Sony announcing the February 20th Playstation meeting teasing "The Future Of Playstation", it seems like 2013 is finally the year that gaming takes the next leap. Anticipation is high and gaming forums are ablaze discussing the alleged specs for the next Xbox (codenamed: Durango) and the next Playstation (codenamed: Orbis). This year represents the 8th year for the Xbox360 and the 7th year for the PS3 which is unusually long compared to past generations lasting ~4-5 years. Most people would expect that the advent of the next generation simultaneously means the decline of the current generation. However, I believe that we will see a fundamentally shift in business strategies from Sony (and likely Microsoft as well) that will go against that trend allowing the older system to continue to thrive long after their successors are released.
     Let's remember a few things. First, Sony is already spreading itself extremely thin with it's PSP, PS Vita, PS3, and soon PS4. Second, the cost of developing for the current gen is still uncomfortably high. The expectation with a modern A-AAA title is that it needs to sell millions of units just for the developer to break even. Look at how many studios have closed or severely downscaled due to losing too much money in the past few years: Evolution (Motorstorm), Lightbox (Starhawk), Zipper (Socom), SuperBot (PS All Stars: BR) just to name a few. Most developers can only hedge their bets on the older systems with their large installed base (75+ million for PS3) in order to reach a wide audience. Sony is already splitting their teams and outsourcing certain sequels (LittleBigPlanet Karting for example) because there simply isn't enough resources to go around. A new system in PS4 that will likely require even more development cost with a much smaller install base is not a economically inviting proposition. For those studios that simply don't have the personnel or the money to absorb a title selling less than 2 million or so, they can stay on the PS3. It's cheaper, comfortable, has a huge install base, and is a known entity after over 7 years. This would explain why some of Sony's biggest first party studios with Naughty Dog (The Last Of Us), Quantic Dream (Beyond: Two Souls), and Santa Monica (God Of War: Ascension) are still making AAA titles for the PS3 in 2013. Each of these studios have a second team working on other products, likely for the PS4. However, they can't risk it all on next gen and simply can't ignore the large PS3 install base to position themselves to actually make money.    
     I suspect that the relationship between the PS3 and PS4 will be akin to the relationship between Toyota and Lexus. For the premium developers with the resources to take on a AAA next generation game, they will build their flagship titles for the next gen systems with their limited install base. For most other developers, they will build for the PS3 with its comparatively huge install base in order to reach a wide audience and recoup their development cost. For these developers/publishers, it would simply lose too much money to jump right into next gen. They will wait a few more years until the install base grows to a reasonable amount (i.e 10-20 million at least). This industry is a money driven one and the economics will only increase in it's demand and complexity when the next gen arrives. A model like this is not one we've seen before but is a necessity given the economics of the industry as well as the desire to move the industry forward with new technology.

Please feel free to share your thoughts in the comments sections.


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