The PS4 Involves Risk, and Sony is Apathetic

It’s been revealed over the past couple days that Sony’s PS4 will follow in the Vita’s footsteps regarding physical vs. digital distribution…and the results should concern every gamer.

ps4 controller

Specifically, Sony has announced that all PS4 games will be available as digital downloads, but implied that many won’t be available in physical, retail form. There are a lot of reasons for Sony’s move, all of them financial, but it puts gamers in a precarious position. Why? Risk.

To clarify, I’m referring to the economic notion of risk, in which uncertainty reduces a consumer’s satisfaction from a given set of goods when compared to 100% certainty of the same expected value. In non-economic terms, people derive more satisfaction from the certainty of knowing an outcome versus the expected probability of the same outcome happening.

If Sony has made no secret of its desire to make everything digital, it needs to provide gamers the same security that physical game copies provide, or at least offer a risk premium. Why do I say this? Sony also announced that PSN games and save data aren’t transferable to the PS4.

risk

Really, Sony? You want us to jump onboard a digital distribution ship when our baggage can’t come with us? Consumers paid for those digital games, that DLC, and they worked hard for that save data. I’m not an engineer, but couldn’t you task programmers with coming up with a conversion mechanism for save data files? Couldn’t you have conferenced with the onslaught of developers that you shoved in the camera’s face on the 2/20 conference to develop a mechanism?

What’s the guarantee that Sony won’t pull this same maneuver for the PS5 5-10 years from now? Digital games have a number of drawbacks: they aren’t sellable, you can’t buy them used at a lower price, and they require storage space. Allowing us to play them as we download doesn’t ameliorate these other grievances.

Sony is asking consumers to take a pretty big risk in regards to their distribution scheme. It’s certain to involve more people having financial information stored on the PSN; if you have to go to a store for a PSN card each time you want to buy a game, then the ease and convenience of PSN is null. Yet can we really trust Sony, given its spectacular failure during the 2011 Anonymous hack? Yes, Sony beefed up their security, but given that they were storing information in plain text files, that’s not hard to do. It’s uncertain whether Sony genuinely takes data security seriously.

I rarely buy games on PSN for one major reason: I refuse to have credit card information stored on Sony’s servers, and I don’t typically feel like buying $20-$50 PSN cards at Gamestop regularly. I buy physical retail copies of games, and in this respect, I represent the majority of gamers.

Sony’s emphasis on digital games is intimidating, and I’m kind of glad that I’m in college – I have a legitimate excuse (limited leisure time) to sit-out the next console generation. The PS4 is a high-tech gimmick that entails a lot of uncertainty for gamers. Nintendo ensured that when the Wii U launched, anyone could transfer their games & save data. That Sony can’t make that promise is unnerving. I’m not willing to shell out hundreds of dollars for a new system, when the sweat and tears I sacrifice while playing might also become obsolete in 2020.

The fact is, my satisfaction from the PS4 is less when there’s uncertainty. I, and most people, are risk averse. When people are risk averse, they’re willing to accept smaller payoffs for greater certainty. For Sony, this might mean a migration to the Wii U or the Xbox 360’s successor.

store_GameStop

Why? Because even if Sony could (and it’s debatable) offer better games than their successors, that extra satisfaction can’t eliminate the risk of sticking to Sony. So long as the Wii U or Xbox 720 are surer bets, I could make that leap without hesitation. And this is true for every risk-averse consumer (i.e. almost everyone).

Yet Sony may still be the most expensive console on the market. $500 is a hefty purchase price. The next Xbox is uncertain, but it can hardly be more expensive. Sony doesn’t seem to recognize that choosing a PS4 involves risk. Instead, the company seems to be under the illusion that consumers will pay a premium for their hardware. Any bets on how disappointing the console launch will be?

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