This holiday season will be a milestone in the history of video game consoles as we see the first mid-generation upgrades appear. Not only that, but we have a new console appearing from Nintendo in March 2017, as well as VR hardware on sale for the first time during a holiday selling season. We could be seeing a significant new model emerging for how consoles are sold, or the market could be cool to the idea—but either way, as consoles enter a period of uncertainty, marketers should pay careful attention.
Sony announced last week that the PlayStation 4 lineup will consist of two consoles: the PlayStation 4 Slim at $299 (essentially the original PS4 in a smaller size and lower price) and the PS4 Pro, a PlayStation 4 with substantially improved graphics and CPU, capable of displaying 4K/UHD (Ultra High Definition) and HDR (High Dynamic Range) games, for $399. Sony said that all PS4 games will be playable on all PS4 models (original, Slim, and Pro), and a patch will update all existing consoles with HDR capabilities for supported games.
While this type of mid-generation upgrade hasn’t been seen before with home consoles, it’s been the go-to strategy for Nintendo with its handheld consoles. We’ve had the 3DS, the 3DS XL, the New 3DS and the 2DS, just to cover a lower price point. The New 3DS came with a significant horsepower upgrade and is apparently doing well, which may be indicative of PS4 Pro’s success.
Marketing Challenges For Sony
There are several marketing challenges ahead for Sony, and there are no easy answers. The features of the PS4 Pro and the benefits are confusing at best, even to savvy consumers. Not all games will benefit from the PS4 Pro, and those that will benefit will not do so in a consistent way. Some games played on PS4 Pro will have higher resolution, requiring a 4K/UHD TV to display. Some games will have HDR color, requiring a different 4K TV that supports the capability. Some games played on a PS4 Pro will look better on a standard HDTV than with a regular PS4, but not always.
Therefore, the first marketing challenge for Sony is this: Why should someone spend $100 more for a PS4 Pro? Sony no doubt has answers lined up, which we shall see when their marketing appears. The deeper question behind this one is that of the target audience. Will there be a large number of the existing PS4 owners who will upgrade to the PS4 Pro? That seems likely, given the number of hardcore gamers who were early adopters of the PS4. Still, those PS4 owners will have to sell their existing console and put the money towards a PS4 Pro.
The upgrade issue is complicated by the need for a 4K/UHD TV with HDR to get the full PS4 Pro benefits. Those TVs are still uncommon, but with falling prices, it’s reasonable to expect the install base to grow. PS4 owners with a perfectly good HDTV may not be eager to spend $600 or more for a new TV, but Sony would probably love the use the PS4 Pro to help sell new 4K/UHD TVs, though. Might we see some marketing from Sony to help make this cross-sell happen?
Long Term Challenges
Looking out beyond this holiday, the picture gets more complicated for Sony when Microsoft ships the Xbox One Scorpio, which will be significantly more powerful than the PS4 Pro. But that competition won’t appear until holiday 2017, giving Sony plenty of time to tune its marketing strategy. Of course, that also gives Microsoft plenty of time to observe how the PS4 Pro is doing in the marketplace, and how Sony’s marketing efforts are working.
The more interesting question for Sony is how to split the marketing budget between PS4, PS4 Pro, and PSVR. We’ll probably see bundles of a PS4 and PSVR, but which model PS4? How important is the pricing versus the increased power of the PS4 Pro when it comes to PSVR? In the long term, does Sony hope to move the bulk of new PS4 buyers to the PS4 Pro? Watching the marketing strategy unfold over the next year will give you some clues as to Sony’s long-term intent.
Right now, Sony has said that all PS4 games must play on all models of the PS4 with no PS4 Pro exclusives. That makes sense, since the changes needed for a game to play on all PS4s are minor, akin to the graphics options we commonly see on PC games. That might change at some point in the future, perhaps if PS4 Pro sales become the vast majority of PS4 sales.
Key Points For Marketers
The console market is getting more complex, as we now have Sony with two models of its best-selling console, and Microsoft will follow next year with a third (counting the Xbox One S) model of the Xbox One. Not only will both console makers have two console models to sell, they will need to explain to users the differences and why both are good buys. Moreover, this is made much more complicated because much of the benefits require a user to have a new TV to realize those benefits. More challenging still is the fact that you won’t be able to see those benefits by looking at a video on your current monitor or TV screen—you’ll have to see them in person.
Thus we can expect more in-person efforts by Sony (and eventually Microsoft) to show users the differences between consoles and why they are important. Retail kiosks, traveling demos, displays at conventions are all likely to be used. This may be good for game titles that get showcased, but it may also make it tougher to get retail space for other types of displays such as software or for VR hardware.
Marketers should look to take advantage of the effort that will be put into marketing games that show off the differences for advanced consoles. Sony will have a “PS4 Pro Enhanced” icon on its PS4 Pro page and all related software packaging, signifying that the software takes advantage of the PS4 Pro’s added features. Of course, the caveat immediately follows: “Features vary from title to title. Select features depend on the type of display connected to PS4 Pro.” It’s going to be up to each game’s marketers to figure out how best to take advantage of this.
Marketers should be looking to development teams to get the very best images from games that take advantage of new features, then work to get the public informed of those advantages. The advent of 4K and HDR console gaming is going to be another differentiating point for marketers, and those that are able to leap on it first will have an advantage.