Sony (NYSE:SNE) recently made some important announcements about the PS4 at the Gamescom trade fair in Cologne, Germany. The company confirmed the console's whopping sales growth, unveiled a slate of impressive exclusive games, and introduced a new feature that allows players to "share" games.
Let's take a look at what these announcements reveal about the future of the top eighth generation console.
10 milion units sold
Sony revealed that it had sold 10 million PS4s since last November. That makes the PS4 Sony's fastest selling console ever -- the original PlayStation took over two years to cross 10 million, while the PS2 and PS3 both took over one year. That also keeps the PS4 far ahead of Nintendo's (NASDAQOTH:NTDOY) Wii U, which has sold 6.8 million units, and Microsoft's (NASDAQ:MSFT) Xbox One, which has sold 5 million.
Sony's PS4 gained an early advantage over the Xbox One due to its price. The PS4 debuted at $399, while the Xbox One cost $499. The Kinect, which was responsible for that $100 price gap, was intended to be the control hub for the console, but it never felt like a required peripheral. Microsoft eventually removed the Kinect in May to lower the price to $399, then launched several bundles including Titanfall and Forza Motorsport 5 to boost sales. However, those efforts failed to help Microsoft gain much market share against the PS4.
The Wii U, on the other hand, is still an unpredictable competitor. Although many analysts believed that Nintendo would eventually axe the Wii U, it mounted a late comeback after Mario Kart 8, and might gain even more momentum with Super Smash Bros. Wii U, Hyrule Warriors, and new Amiibo figurines.
Therefore, 10 million is a solid sales figure, but it's hardly a declaration of victory -- Nintendo's Wii only topped the seventh generation console race after selling 101 million units.
New exclusive games
Sony announced four new exclusive games at Gamescom -- Bloodborne, Until Dawn, Wild, and a new Silent Hill game. A fifth game, Hellblade, will launch on the PS4 before other platforms.
Bloodborne is a new RPG. Until Dawn and Silent Hill are survival horror titles. Hellblade is an action adventure game from Ninja Theory, which previously created Heavenly Sword and DmC: Devil May Cry. Wild comes from Rayman and Beyond Good & Evil creator Michel Ancel, who boldly declared that the open-world game will be the size of Europe.
Beyond console exclusives, Sony will bring the PC survival horror hit DayZ to the PS4. Media Molecule will also launch a PS4 version of its PS Vita title, Tearaway, next year.
Sony also introduced Share Play, which allows players to share games online with friends who don't own the game. It also lets a player take control of a single-player game to remotely assist a friend. Share Play will be added with the PS4 system update 2.0 this fall, and will be available to players with PlayStation Plus subscriptions ($50 per year).
Share Play expands Sony's dream of gamers playing one game on multiple screens, as seen with PS Now. Yet it's also a throwback to an older business model of "spawning" copies of games. Blizzard did this since the old days of RTS (real-time strategy) games -- if four people wanted to play StarCraft, for example, only one disc was needed. The other three players simply installed "spawn" copies, which could only play the multiplayer mode with the host. The idea was that those three other players would be more inclined to buy the game as well after playing it with friends.
The biggest drawback of Share Play is that it is only allowed over a local connection. This likely isn't due to bandwidth limitations. Instead, Sony probably doesn't want Share Play to interfere with PS Now, which is currently in a price-testing beta, since it might eventually add PS4 rentals to the cross-platform cloud service in the future.
The Foolish takeaway
In conclusion, Sony's outline for the future of the PS4 at Gamescom strongly builds upon its previous presentation at E3. The company intends to capitalize on its position as the market leader with a steady stream of exclusive games and new sharing features that integrate well with its PS Plus, PS Now, and Remote Play strategies.
Strong sales of PS4 hardware helped revenue at Sony's Game & Network Services business surge 95.7% year-over-year to $2.55 billion last quarter. The business also posted a profit of $43 million, compared to a loss of $16 million a year earlier. If Sony maintains its disciplined approach to expanding the PS4 ecosystem, the segment's top and bottom lines will continue expanding along with the PS4's lead over the Wii U and Xbox One.