The dynamics of the console market have changed over the years and Sony is considering changes to its business model to reflect modern consumer buying habits. The role of a console maker in the past was to collect licensing fees from third party companies who publish games on that system. However, that approach is somewhat outdated now as gamers are increasingly buying their games digitally and a single title can enjoy significant post-launch income from DLC and microtransactions. These transactions are not effectively covered with a focus on console sales – especially when multiple users can play on a single console.
Sony is well aware of these changing trends. During their most recent investor briefing, Chief Financial Officer Kenichiro Yoshida pointed out that over half of Sony’s game and subscription revenues will come Sony Entertainment Network. The income from in-game items and downloadable content has also been rather lucrative for the company and the company is considering a “Games as a Service” approach for future titles. The promotion of John Kodera to replace outgoing SIE CEO Andrew House indicates a future expansion of PlayStation’s business from the network.