Nainan has over 25 years experience working for Sony PlayStation. He is the Former SVP, Corporate Strategy and Development at PlayStation where he was responsible for leading Sony through the shift from physical to digital gaming. From 2005-14, Nainan had P&L responsibility for PlayStation’s digital membership and subscription services, PlayStation Plus and Now, and was pivotal in restructuring Sony’s business model to focus on digital services.
That starts from the route to market, to acquire customers. The start of the game as a service – I guess you’re meaning the free-to-play type of games – in that model, what’s really important is, getting your active user base up. You want your MAU and your DAU to be very high, as soon as possible, so you’re creating your community effects, you’re getting a vibrant ecosystem. Then, you’re basically into in-app purchases. Whether you are on a PC or a console, all of them facilitate in-app purchases, within the game and so it’s fairly neutral.
Where I think the difference is, is how you go about acquiring your user base. PC is, obviously, a more open platform for that and there aren’t any restrictions on what and how you get to your route to market. On the other hand, it’s a more fragmented platform. Typically, PC developers are still very dependent on Steam to acquire that user base and it’s very easy to get lost, so that’s the downside, in the PC world. It’s still a problem on console but you’ve got a defined user base to target and market to. I don’t think one has a particularly great upper hand in this business.
I can’t talk very specifically on an individual company but, broadly, platforms will now accept content from publishers, if the content fits their content criteria. There are not huge gates. There are quality gates, which most publishers of good content will meet very easily. Then the question is, which titles will platforms co-market with? It’s no longer the case that platforms are really active gatekeepers, where they’re selecting what does and doesn’t come on the platform. There are QA rules and legal and decency rules that each of them have, for obvious reasons. But beyond that, the platforms are not open, but they are accessible. The real question is, which of the types and categories of title does the platform choose to actively promote? That depends on the opportunity.
Most of the time, that is a fairly commercial decision about whether the title is going to do a function which they need. You can map out these functions fairly easily. The first would be, does the title bring in new customers? A great example of why Fortnite was so successful on the consoles is that the console business, especially PlayStation, thought it would bring in a lot of customers; and it did. The second function might be around revenue. By partnering, is there going to be really significant revenue coming from that title? The third and, I think, often neglected function, might be that it’s completing the portfolio. Perhaps there has been a weakness perceived in the platform’s portfolio, in this area and this addresses it, so they want to make sure that it fills that gap.
I think the first two are really the things that are front of mind when considering, from a platform point of view, what content may or may not work. Those things all come into play. But in the end, it is often the marketplace and the economics that will determine a lot of that and guide that.
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Nainan has over 25 years experience working for Sony PlayStation. He is the Former SVP, Corporate Strategy and Development at PlayStation where he was responsible for leading Sony through the shift from physical to digital gaming. From 2005-14, Nainan had P&L responsibility for PlayStation’s digital membership and subscription services, PlayStation Plus and Now, and was pivotal in restructuring Sony’s business model to focus on digital services.