Sony confirms it’s working on the next PlayStation console

With the fifth anniversary of the PlayStation 4’s debut approaching, Sony has confirmed that it is developing a successor to the console.

“At this point, what I can say is it’s necessary to have a next-generation hardware,” said Kenichiro Yoshida, Sony’s president and CEO, in an interview with the Financial Times.

Yoshida did not name the console, so there’s no information yet on whether it will officially be called the “PlayStation 5.” There’s also no word on a release window, although John Kodera, the CEO of Sony Interactive Entertainment — that’s the official name of the company’s gaming division — suggested in May that the next PlayStation is at least three years away.

“We will use the next three years to prepare the next step, to crouch down so that we can jump higher in the future,” said Kodera. Sony plans to employ that strategy through its 2020 fiscal year, which ends in the spring of 2021, so the PS5 may not come until after that point.

It doesn’t take reading tea leaves to figure out that it would make sense for Sony to produce a new PlayStation. The PS4 is easily Sony’s most successful hardware platform since the PlayStation 2, which remains the best-selling video game console of all time with over 155 million units sold. Sony has sold more than 81.2 million PS4s worldwide, already surpassing the lifetime sales of the PlayStation 3.

More importantly, the PlayStation division has been Sony’s top-performing business segment in every full fiscal year since the company launched the PS4 in November 2013 (i.e., starting with the 2014 fiscal year, which began on April 1). In Sony’s 2017 fiscal year, which ended March 31, 2018, revenue from Sony’s gaming business amounted to 1.94 trillion yen ($17.53 billion) — nearly 23 percent of the company’s $75 billion total.

Citing people in game publishing who are familiar with Sony’s PS5 plans, the Financial Times reports that the console “might not represent a major departure from the PS4, and that the fundamental architecture would be similar.” This sounds likely, since both Sony and Microsoft have extended the current console generation by releasing more powerful 4K-capable hardware — the PlayStation 4 Pro and Xbox One X, respectively — that is fully compatible with existing games.

Everyone from video game executives to casual observers of the industry have long suggested that the era of traditional console generations may be winding down, but for now, it sounds like Sony is staying the course. Indeed, Kodera’s predecessor, Andrew House, said in April that he expects game makers to continue shipping physical disc-based games for the foreseeable future. House added that the industry may be at an “inflection point” where cloud-based game streaming becomes standard practice, but noted that “the business model has to be thought through.”

House was running the PlayStation division when it acquired game-streaming platform Gaikai in 2012 for $380 million. Sony used Gaikai’s technology as the foundation of its own cloud service, PlayStation Now, which it launched in 2014. Customers can subscribe to PlayStation Now for on-demand access to a library of more than 500 PS2, PS3 and PS4 games, along with the newly added ability to download PS2 and PS4 titles. The service is accessible only through a PS4 or PC.

While the PS4 was the first console from one of the platform holders to offer streaming games, Nintendo and Microsoft are now catching up, and other major players are entering the fray.

The Nintendo Switch may not be powerful enough to natively run games such as Resident Evil 7 biohazard and Assassin’s Creed Odyssey, but in Japan, Nintendo has experimented with streaming those titles to the portable console. Microsoft announced Monday that it plans to begin streaming Xbox One games to devices such as tablets and smartphones through an initiative it calls Project xCloud, which the company is reportedly building as the foundation of a streaming-focused console that it will launch alongside the next Xbox. And Google has partnered with Ubisoft to stream Assassin’s Creed Odyssey to the Chrome browser via Google’s own newly announced streaming platform, Project Stream.

“Other than the technical challenges, there’s no reason why game streaming can’t be present in games in the same way that we have seen in the music and film and television industries,” said House, the former PlayStation chief.

Kodera, the current head of Sony Interactive Entertainment, noted in May that subscriptions and online services will play a key role in the next PlayStation platform.

“We need to depart from the traditional way of looking at the console life cycle,” Kodera said. “We’re no longer in a time when you can think just about the console or just about the network like they’re two different things.”