Sony’s Next Gen Strategy Could Include Cloud Gaming but Faces Major Technical Challenges

The next generation of consoles is just around the corner and the debate around cost, convenience and cloud gaming is hotting up. A new theory is that the PlayStation 6 will have a more affordable "Series S" system that will be largely cloud-based rather than hardware-based.

As cloud gaming technology advances, it is unclear whether it will be a sustainable part of a next-gen platform.

A Cloud Edition Console

So what are your thoughts on the quote-unquote Series S PlayStation 6 being the cloud edition? And it might even work on the PlayStation 5. This is an extension of the idea of a tiny console or a low-end version of the console. 

It might be a shift in strategy for a home console or a low-end version of a PlayStation handheld, making the system cheaper.

You can already play PlayStation 5 games in the cloud, and that technology will be available on the next generation of consoles as well. It is the PlayStation 5 in the cloud. It is available now if you want it. 

The picture quality is extremely good on 4K, but the lag is not great. It might be better, but it's still a possibility. The premise of lower cost is that you don't have to buy gear, but you do have to pay for a PlayStation Plus subscription to enjoy this service.

Concerns Around Cloud as a Core Strategy

Cloud cannot be a core element of a hardware strategy. It's hard to picture launching a new console and a cloud-only version as a first option. This option isn't for everyone, and it makes no sense for many use cases. 

It adds complexity, especially the need for an additional streaming box, and it just isn't that good right now.

The frame presentation and latency aren't great. It needs to improve further to be on par with other offerings such as GeForce Now.

The Case for Traditional Hardware

There is still a case for a micro console. Hardware home consoles that can sit under the TV and operate in a plug-and-play environment remain desirable. It is independent of the Internet and is more reliable than the cloud can currently offer.

One way to make a console cheaper could be to use an existing specification with tweaks,, such as increasing the clock speed or achieving equivalent performance. This would allow a new console to be brought to market with minimal complications.

Other Possibilities for a Cheap Console

The idea of a low-cost next-generation console remains viable, but cloud gaming might not be the preferred solution. Rather, there could be two options. 

The first is a handheld system or something derived from it that is a micro-sized console. The other is a more efficient version of current hardware, such as the PlayStation 5.

A die-shrunk variant of the existing chip (from 6nm to 4nm or 3nm) could be much cheaper. A smaller die, less memory, and greater efficiency could provide a more cost-effective system. It seems reasonable to assume this is the best way to offer a cheaper system.

Market Position and Ecosystem Strength

The PlayStation 5 is likely to stand the test of time. The question becomes whether there are benefits to adding a low-cost handheld system-on-chip (SoC) to the performance spectrum.

An advantage for the next generation is the PlayStation 5's large installed base. There is a significant market for selling games and subscriptions, with more than 90 million units sold. There are also a large number of second-hand systems, which establish a lower price point in the market.

Millions of Playstation 4s are still available and they continue to generate revenue from software and services. This is significant for Sony and gives it an advantage because it can leverage its enormous install base to ease the next generation.

The secondhand market for the PlayStation 5 is already fierce, with prices tumbling.

This is an example of another opportunity to expand the ecosystem without new hardware at a lower price.

In any case, cloud gaming is growing, but slowly. It may complement the next generation. The balance between performance, price and convenience will be a critical consideration as Sony balances investing in cloud or hardware, or a combination.