DF Direct Q+A: Sony Finally Responds To End-Of-Disc Backlash - And It's Not Good News

**Rich Leadbetter** (0:02)
Hello there, and a warm welcome to the latest edition of the DF Direct Q&A show. And I bring you happy news. Sony has actually responded to the outcry surrounding the end of physical media. And we're going to be talking about that in answer to the first couple of questions that we got. Joining me to discuss that and several other things. First of all, John Lenneman, hello.

**John Linneman** (0:22)
Hey Rich, it's always good to be joined by the Miggity, Miggity, Miggity, Miggity McDaddy himself, which is you.

**Rich Leadbetter** (0:28)
Really? Okay. Yes, you are.
Also joining us Oliver Vickensie, hello.

**Oliver Haslam** (0:34)
Yes, I'm not sure I quite share John's enthusiasm on this fun Monday morning, but I like being on and it should be a good show.

**Rich Leadbetter** (0:42)
Yeah, absolutely. Okay. Okay. So yes, the news that broke after we recorded the last direct was essentially that Sony has actually responded to questions about the end of physical media on PlayStation. However, it chose to do so within a Q&A session in an earnings call. So effectively, they're making further statements because they've been forced to effectively and they're doing it to investors, not to players. I think this presents a really negative viewpoint on the whole thing. It really doesn't look good for Sony in terms of, as I've described before, this sort of growing divide between Sony and its user base. Let's take a look at the comment that did actually come up with.
Well, up until this, this is the comment, by the way, well, up until 2028, well, at this point in time, well, we are not seeing any impact on our business as of now. This is in response to a question about whether the announcement has impacted PlayStation. Going forward about the content sales, I think the large part is already digitized. Therefore, as a result of the discontinuation of a disc, we don't see that there will be any negative impact on our business. However, as I already said, the users, the players have attachments, and we have to think about how to respond to those feedbacks.
Another question was basically asking about whether physical discs were differentiated between console and PC. I would say very much so, to a certain core element of the user base. However, Sony disagrees. We don't feel that the disc is the factor to differentiate from the PC. For PC, there's certain ways to play with the PC as a user. It's a long tail. Our strength is that the curated contents, that's one of our strengths. The game environment being stable, that's another strength. Compared to the high-end gaming PC, our product is more affordable. We don't feel that the disc itself is a strong factor for differentiation going forward. We can coexist peacefully with PC games.
Okay, so we have Sony's words on this particular topic. Now, let's talk about some of the questions that the supporters brought into the mix.
Several opinions here. We're going to kick off with this one from Osgoz. Salutations, DF as exclamation point. Sony's this statement is disingenuous in a way worth naming precisely. Strong opinions recast the subject, the substance of an objection as mere intensity of expression. The vocabulary of feelings marks users as emotional. Both are slights of hand and both sidestep objections that are economic and rational. Resale, library permanence, delisting risk and pricing power on a storefront with no competing sellers. Dressing that up as listening to the community is shameful, which raises a question about game reviewing generally. The standing principle is that you assess the game, not the publisher's distribution decision. But the separation isn't useful. It's why ownership sits in the one zone, no evaluative pressure can ever reach it, which is precisely the arrangement that suits Sony. Publishers, not developers decide whether there's a complete physical release, and publishers are the ones who care how a game is received. So should distribution model be reviewable? Whether that's a score at outlets that use them, or a version recommendation at outlets that don't. Is quote unquote complete disc release a legitimate thing to weigh, or does that break something important about what a review is for? Several other comments, but there's plenty to be getting on with here.
John, thoughts about all of this? Basically, it seems that Sony has been asked to make a comment.
There seems to be some sort of recognition that there is quote unquote feedback, but no actual change of strategy or anything substantive that's likely to appease the very negative and continuing feedback that they're getting on just about all their social media channels.

**John Linneman** (4:37)
Well, given that this was an investors meeting, I think that's a great way to see specifically how they're actually thinking about this right now. They're basically sharing their current point of view on it, which is not aligned with what I think people want and what I want for sure. But it shows that they're still not really interested in addressing this in a public way. They're merely addressing this for the investors. And as you would expect, though, given that this is targeted towards them, they're not going to come out and say, yeah, we screwed up. We got to reverse all. You know what I mean? Like, you're going to present the best possible picture going forward. And the people investing are, I mean, logically speaking, I understand why they're saying what they're saying. It makes perfect sense. But I still don't agree with any of their thoughts on this matter. But it's such a difficult topic now.