Is Sony Mishandling its Gaming Studios?

Sony's approach to managing its gaming studios has produced many critical darlings but few blockbusters. Could the PlayStation company stand to learn a thing or two from Microsoft and Nintendo in this regard?

Jan 19, 2014 at 6:49AM

With the PlayStation 4 posting impressive global sales numbers, Sony (NYSE:SNE) can breathe a small sigh of relief. The embattled company needs a strong, profit-driving performance from its gaming division after it posted major losses during the PlayStation 3 cycle. Early indicators show that PS4 is on track to do good business. With the Wii U a non-starter in Europe and the Xbox One almost certain to be one in Japan, Sony is the only console manufacturer with a shot of being market leader in all three major territories.

The PlayStation 4 sold over 4.2 million units to consumers in 2013, beating out the 3 million units sold by the Xbox One. Even with this data and indications provided by consumer interest trackers, it's still way too early to paint an accurate picture of how this console cycle is going to play out. The traditional gaming industry faces more outside competitors than ever and the software landscape is in the midst of some very interesting changes. One thing that will remain constant is the importance of successful high-profile games. Nintendo (NASDAQOTH:NTDOY), Microsoft (NASDAQ:MSFT), and Sony each have different approaches to intellectual property and studio management. Would Sony stand to benefit from adopting elements of its rivals' strategies?

Is Sony propping up weak IPs?
Sony has developed a reputation for allowing its studios a greater degree of choice when it comes to what they work on than would typically be found at Microsoft or Nintendo. Conversely, the company's only IP that can stand against the biggest sellers that its rivals have in their stables is "Gran Turismo." The PlayStation 4's current and upcoming software slate for the first half of 2014 sees Killzone: Shadowfall and Infamous: Second Son as the company's major first-party titles. There's reason to question whether or not these titles should have even been greenlit.

Killzone: Shadowfall, a futuristic first-person shooter, has been one of the best selling games on Sony's new system. The title is a non-numbered sequel in the "Killzone" series that saw its first release on the PlayStation 2 in 2004. The game was positioned as a "Halo" killer and doomed to be held to that series' lofty standards, but the series came into its own with the release of Killzone 2. This entry in the series was one of the first games to demonstrate the PlayStation 3's graphical capabilities. It would eventually win over a dedicated group of fans with its gritty aesthetic and gunplay and sell over two million copies. Killzone 3 was less commercially and critically successful, but Sony gave developer Guerilla Games the spotlight to make a reimagined take on the series its PS4 centerpiece.

What would Microsoft do?
In stark contrast, Microsoft canned an in-development sequel to 2005's Perfect Dark Zero, a game that had a comparable critical and commercial reception to Killzone 3 and was the best selling first-party launch title for its Xbox 360 console. Microsoft's studio management philosophy favors the use of partnerships to create massive blockbusters and is more focused on the triple-A model than Sony and Nintendo are. It could also afford to sleep on the "Perfect Dark" series because it had "Halo."

Infamous: Second Son is another non-numbered sequel that is being positioned to breathe new life into a franchise that has posted acceptable (but not great) numbers. Similar to the way that Guerilla Games has shown itself to be a worthwhile studio with its graphical wizardry, Sucker Punch Studios has shown that it can consistently create engaging gameplay with a unique style. It's great that these talented studios believe in their respective brainchildren, but one can't help but wonder if they would have produced something with broader appeal if they were instructed to start fresh and given the right dash of Microsoft-style guidance. Not that such moves have always yielded great results, of course. 

Nintendo relies too much on a strength
Rumors that Sony would be acquiring the "Crash Bandicoot" license from Activision Blizzard look to be false, but the platform holder undoubtedly wants to create or reinvent legacy characters. This is one area where Nintendo is unparalleled. The fact that the company has been routinely using many of its classic characters for roughly thirty years speaks to their appeal and the company's ability to invent fresh gameplay. Nintendo's problem is that it seems unwilling to step outside the comfort zone provided by its charming cast.

Standout exclusives are key to console contest
There are no doubt several years worth of secret games in development for the next-generation consoles. On the PS4 front, it will be particularly interesting to see what is coming from Sony's prestige developer Naughty Dog Studios. A game in the "Uncharted" series has already been announced, and a sequel to its highly acclaimed The Last of Us is also likely under way. With the PlayStation 4 mounting an early sales lead, it will be interesting to see what effect Microsoft's historically bigger exclusives and the remainder of Nintendo's Wii U slate have on the console console race. Sony has lots of talented studios, but its first year PS4 software lineup seems to lack in potentially explosive triple-A exclusives. 

What other companies should you be watching in 2014?
There’s a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it’s one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Keith Noonan has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers