1709537247 Between artificial intelligence and bubbles Is the digital industry on

Between artificial intelligence and bubbles: Is the digital industry on the brink of the abyss? | Babelia

We recently talked about a complicated immediate future for Microsoft. Today it's time to talk about Sony.

The news that the Japanese company would lay off 900 PlayStation employees (8% of the workforce) surprised everyone last week. Apart from the doubts for the entire industry, the news is particularly tragic for Spain because it can affect the national chapter of a company that is causing a sensation (for example with the PlayStation Talents, for example with its gigantic advertising campaigns at the big premieres). took care of the local ecosystem like no other.

The news caps just one year, 2023, a fateful year for tech companies (Microsoft laid off 10,000 employees; Google 12,000; Amazon 18,000; LinkedIn suffered 1,400 layoffs; Zoom laid off 1,300 employees; Spotify laid off 17% of its employees; Twitch). , with half) and very bleeding for video game developers: Rockstar, Bungie, Ubisoft, Take-Two, CD Projekt, Epic, Bethesda, Blizzard… all added 10,000 layoffs from January 2023 to today. Nobody rules out that there are more.

Then of course it's time to ask the million dollar question. And what the hell is all this about in an industry that's supposed to be ubiquitous and generate so much money?

First, the rebound effect of the pandemic was much more brutal than expected. It was assumed that the number of players would grow forever, but many only jumped on the digital bandwagon during the lockdown. In 2023, Sony expects to sell 25 million PS5s, for example. If you only sold 21, the calculations from then on have to be degressive – i.e. pessimistic. The industry often repeats that 3,000 million people play video games worldwide and that there are already 18 million players in Spain. Great, but the downside of this lucky coin is that logically you can't grow anymore. At least not with the previous strategies.

Second, there is cost hyperinflation. This industry has gotten into dubious adventures. The most recent films “Skull and Bones” with a 10-year development period and “Suicide Squad: Kill the Justice League” with a 9-year development period have become blockbusters, each costing more than 200 million dollars. To put it into context, the two Dune films were made for much less money. Well, both were absolute failures. Sony was not exempt from these practices. It was recently leaked that Marvel's Spider-Man 3 would have a budget of $385 million. Marvel's Wolverine, 305 million. To make this profitable, you have to sell many millions of copies.

Promotional image of the canceled multiplayer of “The Last of Us”.Promotional image of the canceled multiplayer of “The Last of Us”.

Everyone knows that resorting to a football comparison always indicates laziness. But in this particular case, no one can question the comparison of the current situation with that of Barça after the second treble in 2015: unrealistic inflation of asset prices; Impossibility to grow beyond the audience already reached; Failure of subsequent projects in which money and hope had been invested. Yes, as strange as it may seem, Suicide Squad and Dembélé have more in common than it seems.

To these two factors we must add a third. In the background, the spirit of artificial intelligence hovers like a diffuse cloud over the cultural sector, which generates the most money worldwide. The technological precedes the analogue, and video game companies (we have already said it more than once) act as the canary in the world mine. Many of the personnel adjustments experienced speak for a future in which many jobs will remain, but in which people will not hold them. We cannot ignore this.

And finally, there is a fourth negative factor: the most extensive games such as Call of Duty, Fortnite, FIFA or Minecraft can be played both on old consoles (PS4, Xbox One) and on computers. In addition, many of them are so-called “games as a service”, i.e. games with a continuous payment model or with microtransactions. They're not the kind of games this column favors because they don't exactly have the creative potential to become the art the 21st century needs, but hey, they sell like hot cakes. In any case, ontological complaints aside, Sony has also failed in its commitment to these types of games. The cancellation of Twisted Metal or the multiplayer of The Last of Us show that their salvation was not that way either.

Anyway. We'll have to see how things develop. The sector will rise sooner or later. For example, and counterintuitively, Microsoft's strategy of opening itself to selling its games on other consoles could be much smarter than it seems: Microsoft is interested in this because its competitor Sony has sold 50 million PlayStation 5s. However, Sony cannot take this step as it has simply sold less than half of the latest generation Xbox. That means what seemed like a capitulation last week could end up being a triumph.

Finally, we can point out two interesting things. On the one hand, the Switch continues to sell. In fact, Nintendo can afford to delay the release of the Switch 2 even if there isn't a big game coming out this year, simply because people are still buying it. On the other hand, Helldivers 2, released by Sony, was a complete success. Partly because of sales; Partly because the limited budget makes it more profitable. The wonderful Prince of Persia reminded us two months ago that you can make great games for a tenth of the cost of Spider-Man. Games that become commercial successes by selling 2 million units (and not 20). Maybe there is a way. Maybe we still have time.

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