Why Is PlayStation 4 Selling So Well?

Why has Sony's game console sold 10 million units so quickly? Let's take a look at a few potential explanations.
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Ariel Zambelich/WIRED

Sony announced a major milestone this month at the Gamescom gaming convention in Germany: It said it has sold 10 million PlayStation 4 consoles through to consumers since the launch of the game machine last fall.

This is very fast---roughly on pace with the sales explosion of Nintendo's original Wii. Sitting down with Sony executive Shuhei Yoshida at the conference, one question was top of mind for Eurogamer: Why? Yoshida easily could have offered, as so many gaming executives have before, some variation on, "PlayStation 4 is doing so well because we provide amazing value to our consumers," then taken a subtle dig at the competition and moved along.

Instead, what he said was: We don't know, and it's a little weird.

We are so happy. But I for one am a bit nervous because we do not completely understand what's happening. You need to understand why your products are selling well so you can plan for the future, right? It defied the conventional thinking. Lots of people thought the dedicated game hardware might not be needed going forward, but still lots of people are very excited. ... I'm asking marketing people to tell us why. They've been to people who already purchased, and some of the early data was amazing in terms of the number of people who didn't used to own PS3 have already purchased PS4. So we are getting lots of new customers coming into PlayStation. And some people never purchased any last-gen hardware: PS3, or Xbox 360 or Nintendo Wii. So where did they come from? ... I don't know. As soon as we see a great sales number, our instinct tells us we should be concerned about future sales, right? Are we exhausting all the core gamers? If we sell this number of units, there are no more consumers we can sell to. That's a really terrifying prospect. So we want to understand who are these consumers who we do not necessarily consider core gamers, who are purchasing PS4 and why they are doing it and what they are doing with PS4, so we can create a bit more of a positive future, rather than saying, wow, we have sold to every single core gamer.

This was a significantly more honest and introspective answer than anyone might have expected. It certainly has the ring of truth to it, because PlayStation 4's success doesn't entirely make sense, for the reasons Yoshida outlined. So why is Sony's console performing so well? Let's take a look at a few potential explanations.

Traditional game consoles are not in danger at all. This is the first thought that a lot of people get to, and stop at. Are all the new ways of playing games---browsers, Steam, phones, tablets, microconsoles---that have gained such popularity since the last generation console launches in 2005 and 2006 too weak to have an impact on a $400 box with $60 triple-A games? Is the gulf in quality just too wide after all?

The problem with this theory is only Sony is happy with its sales. Microsoft is burying its numbers; the last time it announced anything about Xbox One sales was in April, when it said it had shipped 5 million units to stores (that's a different measurement, by the way, than Sony's numbers, which are the number of PlayStation 4 units sold to consumers). And we need not rehash Wii U's struggles here. Consoles, in general, cannot be said to be successful this year---only PlayStation 4 can be.

PlayStation 4 is cheap. And not "cheap" in the way that Ken Kutaragi once used it to mean "outrageously expensive," either. Xbox 360---the one people actually wanted, with the hard drive---was $400, but that was 2005 and the inflation calculator I just consulted said it would be closer to $500 today. So at $400 in 2014 dollars, PlayStation 4 has a fairly inexpensive price point for a top-of-the-line gaming machine. That could make those who would otherwise be fence-sitters into early adopters. But it would also support Yoshida's sense of anxiety, since Sony in this case wouldn't be selling more consoles, it would just be selling them earlier.

Ariel Zambelich/WIRED

There's no shortage. Would Xbox 360 have made it to 10 million units much faster had there not been a massive shortage of the consoles at launch? The relative availability of PS4, with no crazy Cell processor or red ring of death to hold up the production lines, might be a factor. But then, Xbox shortages were basically over by the spring of 2006. This can't explain everything.

Pent-up demand. The long, long wait between the launch of the last generation of consoles was unprecedented for the console business. It was seven years between the launches of PlayStation 3 and PlayStation 4. If you bought an Xbox 360 on day one and decided to switch allegiances to PlayStation 4 this time around, you waited eight years. Kids who were in second grade when Xbox 360 came out can drive now, which should scare you.

Most consoles typically sell in the later years of a platform's lifecycle, when prices come down and games are more plentiful. This, coupled with the significantly shorter wait times before the launches of previous consoles, meant a significant portion of potential consumers of a new machine often weren't ready to jump in because they'd only just laid out significant funds for the last machine. If you bought an original Xbox in 2004, three years after it launched, you might not yet be ready to buy a 360 in 2005. But if you bought a 360 three years after it launched, by the time a new console came out five years later you might be just as ready as the early adopters to buy a new machine.

But this, like the price consideration, would only mean those customers who would have bought PS4 eventually have shifted their purchase earlier in time.

Sony executed perfectly while its competitors hamstrung themselves. If Sony is thriving while others are not, it's probably because of something Sony did. And it's done a remarkable job building a community of die-hard fans and selling them on PlayStation 4. Its devastating, cheeky response to Microsoft's Xbox One DRM scheme was astoundingly smart. The way it was executed over social media channels, in a viral, shareable way, ensured the message was spread far and wide.

Where Nintendo and Microsoft chased indies away, Sony welcomed them with open arms, filling in much of what otherwise would have been a typical post-launch content drought.

This, to me, is the most compelling explanation: Sony, having gotten totally creamed in the last console cycle, actually hit rock bottom, learned to be the scrappy underdog, and fought its way back to the top. But as Yoshida himself says, the structural issues that threaten the console business model are still there. There's the old joke about the two campers who see a bear headed toward them, and one immediately puts on his running shoes.

"You don't think you can outrun a bear," says his friend.

"I don't have to outrun the bear," the other replies, tying his laces. "I only have to outrun you."

Sony is outrunning Nintendo and Microsoft. Can it outrun the bear?