Google Stadia a threat to Sony’s Playstation?
Google (
GOOG) is launching a
high-performance gaming PC on the cloud with Google Stadia. Even Apple is planning to launch a new videogame service called Apple Arcade. These services will allow gamers to play high-end games without the need for expensive hardware. All they need is a good and stable Internet connection. This concept of cloud gaming is new. But if it gains popularity, it could pose a threat to consoles.
According to a
Wall Street Journal article, Sony’s CEO Kenichiro Yoshida believes that serious gamers want a high-performance gaming machine at home to run the latest graphics. Thus, PS5 will focus on “dramatically increasing the graphics-rendering speed.” Moreover, gamers buy consoles to play high-quality games exclusive to the console. Hence, Sony will bring more high-quality games on PS5. It will also release smaller games on PS5 as focusing only on high-quality games will reduce its game offerings.
Kenichiro Yoshida believes that console is a niche market. The target audience of PS5 and Google Stadia are different. But he did not deny the threat Google Stadia posed in the mid and long term. Walking with the tide, Sony is also entering the cloud gaming space with PlayStation Now.
Can the Nintendo Switch compete with Sony’s PS5?
Apart from PC and cloud gaming, Sony is also facing competition from Nintendo’s handheld Switch console. According to
NPD’s report, Nintendo’s Switch was the best-selling gaming hardware in the United States in June and in the first half. Does this mean that Switch is more popular than PS4? The answer is no.
Nintendo launched Switch in March 2017 whereas PS4 and Xbox One date back to 2013. As Nintendo Switch is relatively new, there is a large portion of the audience that hasn’t yet purchased the console. Hence, its sales are high. On the other hand, most gamers have already purchased PS4 and Xbox One. The next growth cycle will come with the launch of next-generation PlayStation and Xbox next year. Probably, Sony and Microsoft will overtake Nintendo then.
Nintendo to launch Switch refresh in coming months
Nintendo is leveraging this year to up its sales before the PS5 hits the market next year. The company is set to launch a refresh of its Switch console in August at the same price as the original Switch ($300). The refreshed version will improve the battery life of Switch from 2.5 hours to 6.5 hours to an estimated 4.5 hours to 9 hours in the portable mode. Nintendo is launching a whole new product, Switch Lite, on September 20 at a price of $200. It is smaller than the original Switch with a 5.5-inch screen as against Switch’s 6.2-inch screen.
There are several rumors around the second-generation Nintendo console which is expected to arrive next year. According to the Federal Communications Commission
filings, the next-generation Nintendo Switch will have a new SoC (system-on-chip), flash storage chip, and CPU board. The current Switch Console uses NVIDIA’s Tegra SoC. The rumor hints that NVIDIA might launch its next-generation Tegra SoC next year.
Takeaways for investors
Rising competition, new entrants, and next-generation product launches in the gaming hardware market will set the stage for growth in 2020. AMD will likely be the biggest winner as its processors will power Sony’s and Microsoft’s next-generation game consoles and Google Stadia.