Sony heavily invests into its own first-party studios to develop games for the PlayStation 4, PlayStation 3 and PS Vita. So, it may be surprising to learn that the majority of those games aren’t profitable for the company. In fact, Sony Worldwide Studios President Shuhei Yoshida recently revealed the number of unprofitable titles is closer to 70 percent.
Yoshida discussed PlayStation first-party development during a Q&A session at the Gamelab 2014 conference in Barcelona, Spain (via GameReactor). His response demonstrates the risky and expensive nature of the console game development business.
When you look at what we do, managing studios and managing funds, that’s essentially what we do: to look for talent and support talent, because at the end of the day it’s the people that create amazing things, and it’s the creative team that makes breakthroughs.
It’s a hit-driven business. We look at our financial results of the titles, and probably three or four out of ten make money, and maybe one or two make all the money to cover the cost of the others titles. So we have to be able to maintain that hit ratio at a certain level to be able to continue in the business, so we always try to find out and support and help grow the talent. That’s the most important work that I believe myself and some of my management team at worldwide studios are doing.
There are lots of opportunities. There are so many projects that we want to do, and especially there are so many different techs, platforms and or devices that we can release games, but we have finite resources and budget, we have to make selection choices.
One of the things we always come back to when we’re looking at five potential projects is that we choose the team we believe in when we start working with a new team. That’s really really important.
The PlayStation games division has been one of the few financial bright spots for Sony thanks the success of the PS4. While the company as a whole produced a net loss of approximately $1.26 billion for its 2014 fiscal year ending March 1, 2014, the Game division saw its sales surge 38.5 percent to $9.5 billion.
The recent slate of first-party titles that have likely been money losers for Sony include smaller titles like Tearaway to more expensive adventures like God of War: Ascension. One of the bigger hits includes The Last of Us for the PS3 which will see a PS4 re-release this year.
This is the kind of news that will make gamers happy but leave shareholders disappointed. These kind of risks are necessary because you never know where the next big hit will come from.
[Image via Sony]