by For the past five years, the future of the media giants seemed sealed. Whoever got the upper hand in the streaming wars, launched their own platform and quickly grew their subscriber base, won.
Netflix’s growing subscriber numbers and record share prices indicate this. Even Google, Amazon and Apple, which have each passed the $1 trillion mark in market value and poured billions into content production, seemed to confirm the position.
Sony was an outlier. The Japanese giant, owner of a Hollywood studio, a hit TV series and well-known games, did not have its own streaming platform. He was the dead runner in the flow race.
But after months of acute crisis at the streaming and technology companies, the market is starting to discover that maybe Sony is like the tortoise running with the hare. Slow, but steady and tenacious to the point of catching up to opponents who got distracted along the way.
The Last of Us: common phenomenon
Over the past two weeks, “The Last of Us” has become the latest streaming phenomenon. Before the wonderful third episode even aired, HBO announced that it would renew the series for a second season.
The series is a critical and popular success. With a 97% approval rating on Rotten Tomatoes, the second episode reached 5.7 million viewers on HBO and HBO Max in the US last Sunday. That’s a 22% jump from the 4.7 million who tuned in for the first episode, marking the biggest second-week viewership increase for any HBO drama series in the network’s history. The first episode has already surpassed 22 million views.
Sony’s growing victory
Among the major platforms, only Netflix is currently not at a loss. Sony, on the other hand, reports more than $3 billion in streaming revenue annually.
Around 2015, when the big media conglomerates realized that streaming wasn’t just a niche product and that Netflix was a real threat, extremely difficult conversations began to take place within companies that began to see their businesses under threat.
Within Disney, Warner, Paramount and even Globo, the issue was the same: enter the streaming war and launch a proprietary platform, shedding billions in debt. or become an arms dealer for this war. Simply producing content and selling to the highest bidder was Sony’s choice. Most of the other giants chose to enter the war by launching their own platforms.
Globo launched Globoplay in 2015. Disney announced the purchase of 20th Century Fox in 2017 to have more content, launch Disney+ and be able to compete with Netflix. WarnerMedia, a latecomer to the race, said during the pandemic that it would begin releasing its films directly to streaming, ending the 90-day movie window (last year the decision was reversed). In 2022, ViacomCBS even changed its name to Paramount Global to “reflect its streaming ambitions.”
Selling arms to the enemy
Last year, when he was no longer Disney’s CEO, Bob Iger said that by selling its content to Netflix, Disney was helping the competitor build a platform and a direct relationship with Disney consumers.
“As they did that, they used some of the reach that we helped them build and the growth in subscriptions to fund their own TV and film production, competing directly with us on talent and storytelling. And I woke up one day and thought, basically we’re selling nuclear weapons technology in a Third World country and now they’re using it against us,” concluded Iger, who at the end of 2022 returned to the position of CEO of Disney.
At Globo, the logic was similar. It was better to launch Globoplay before another competitor ended up creating a platform that became the leader in the production of Brazilian content before Globo.
But with so many people producing content for different platforms, finding content that stands out among the record of new producers is a growing challenge. And that became Sony’s big advantage.
The golden age of gaming
If, on the one hand, Sony does not have its own streaming platform, on the other hand, the owner of PlayStation has some of the most recognized brands and properties in the world. The company owns franchises such as Seinfeld, Spider-Man, part of James Bond, Jumanji, Men in Black and many more. The PlayStation owner also has a lot of games that are becoming the next content goldmine for movies and TV.
The global gaming market was worth $184 billion in 2022, according to Newzoo research. About half of those are mobile games, but even console games, which brought in $52 billion in revenue last year, are already bigger than the global movie market, the WSJ says. Even before the pandemic, the gaming industry had already surpassed that of cinema.
Comics worked for Disney with Marvel, novels worked for Warner with sagas like “Game of Thrones,” but finding world-famous stories that can yield extensions and new products is increasingly difficult.
But the gaming industry is full of them. Halo, at Paramount, was a huge success. The Witcher, on Netflix, exceeded all expectations. There are many examples in recent years. “Uncharted,” “Mortal Kombat,” “Sonic the Hedgehog,” “Sonic the Hedgehog 2” and “Resident Evil: Welcome to Raccoon City” and the “Arcane,” “Resident Evil” and “Cyberpunk Edgerunners” series among others.
The durability of game franchises is impressive. Grand Theft Auto was released in 1997 and even today, on the Steam platform alone, more than 2.5 million people play the game every month. The game has an average of 111,000 concurrent players online on Steam. And it’s only the tenth most played title on the platform. Counter Strike and Dota 2 lead the way, with the former reaching peaks of over 1.1 million users.
Playstation Productions is a new weapon
Sony also owns a major Hollywood studio and one of the largest record companies in the world. In 2019, the company launched PlayStation Productions to help turn its game franchises into movies and TV series. Other TV series based on Sony games include Netflix’s “Horizon Zero Dawn” and Amazon’s “God of War.” In addition to profits from franchise licensing, Sony also earns from the sale of its games and related products. Whenever a production based on a game hits the air, sales skyrocket.
It’s hard to quantify the contribution that series and movies have to popularizing and increasing sales of game franchises, but it’s huge. In addition to attracting old nostalgic players, they bring a new audience to the game.
Game movies have been around for years, but a lot of them were a bunch of garbage. According to Doug Creutz, entertainment, media and gaming analyst at Cowen, the current boom is different because companies are taking the medium more seriously and focusing on “creating a quality experience rather than just making money.”
“It’s not like what happened in the comic book genre 20 years ago,” Creutz told TheWrap. “When creators started taking it seriously as a medium to tell stories in general, audiences beyond fanboys started taking it seriously as well.”
The term streaming war was inspired by Game of Throne. When companies started getting into streaming, the series was a phenomenon. But Sony, when asked if it would have its own streaming platform, perhaps concluded: “Why try to beat the Lannisters when you can be the Iron Bank?” Supplying weapons to warring giants can be a big deal.
PS: The debate surrounding video games in Brazil should not be about whether it is a sport or not, but which government ministry should lead the efforts to develop this industry in the country. Games already earn more than movies. In addition, they generate a large amount of intellectual property, which in practice means more skilled jobs and foreign exchange from exports.
