Sony's revenue last year $25 billion was higher than both Nintendo and Microsoft combined. $11 and $12 billion.
Whatever they did in the ps4 era clearly worked so not sure why he's going around changing stuff.
If it ain't broken...
So I was looking this up to see if you separated out Sony's gaming sector from their overall revenue (keeping in mind, revenue means very little, it's net profits and gains that matter). Their fiscal year just ended so we don't have full 2020 figures yet, but going on 2019 they made a total of 77 billion dollars in revenue. They generated 20.84 billion of that from their gaming sector (the biggest sector in the whole company, revenue wise). 12 billion was from PSN subs.
The entire company overall, however, only profited 5.4 billion. So of that 77 billion in revenue, 71.6 billion was operating costs. That's a 7% profit rate.
Nintendo's net income for 2019 was roughly 1.8 billion. With 11 billion in total revenue. That means Nintendo's operating costs is 9.2 billion (that year). That's a 16% net profit rate.
Microsoft's net revenue for 2019 was 125 billion, with a net income of 43 billion dollars. They have 50 billion (as of 2019) in pure cash they can spend at any point. They paid out 30 billion in pure dividends (profits) to share holders. The gaming segment according to their report was about 10 billion in revenue that year. With a stated net profit of 18%. So microsoft has an insane overall profit margin, but for gaming it's actually an industry best percent. This is before all their acquisitions finalized, which most of them did in 2020.
Sony has virtually zero cash on hand due to outstanding debts. Microsoft is one of the richest cash on hand companies in the entire world. Nintendo has the most cash on hand of any company in Japan at almost 10 billion.
As for Nintendo - you never know with them. They could go third party. They could have the first 200 million selling system. Nobody knows what the hell they are doing.
So what do we learn? Sony is heavily reliant on their services to make gaming profitable. A bit ironic, considering how hard Microsoft is pushing service based gaming moving forward.
But also, we learn that just because they have a lot of revenue doesn't actually mean Sony is making that much money. Those gaming figures are more revenue than Xbox + Nintendo combined in the gaming sector, but the profit margins are not. So when you say "if it ain't broke"- you are right. It's profitable. But with so much revenue coming off PSN, imagine what could happen if they actually focused squarely on service based gaming? It appears Sony is choosing to leave a lot of money on the table.
As for the overall topic on Jim Ryan, I find it to be interesting. So, PS5 is really the first system we can point at as "this is on you" and it's selling out. I think what has happened is, Jim Ryan isn't interested in having a foundational relationship with gamers. Instead, he just wants to make the most amount of money possible. Almost... EA like in a sense. People can hate on EA and their CEO, but there is no doubt they still churn out some really good games at times and that company knows how to shit money for breakfast. Jim Ryan is running their gaming side of things in a similar way.
Phil Spencer has a different approach and I think people tend to give him more credit because frankly, he's coming from a dark spot. Jim Ryan took over basically when Sony was busy being awesome still. And now people are worried in how he talks and what he says and promises he breaks potentially hurting the brand long haul. Anyone remember him promising PS5 would take care of their retro fans and be back compat with all systems? How PS5 games would be exclusive right away and then he went back on both? It can erode consumer trust one day if that keeps happening.
When Phil Spencer took over, the difference was that Mattrick had lead Xbox almost into extinction. There was so much work to do and Phil Spencer sounded ambitious with what he wanted to get done. Sure, a lot of fluff came out and never happened, but his overall vision seems to have only gotten stronger. He said he wanted to fix the exclusive problem. You can't do that overnight - but look at all the acquisitions the last few years, topping off with Zenimax? That's pretty bold and Mattrick would have never thought of it, nor convinced microsoft, to invest so much. Phil Spencer also said he wanted to find a way to make gaming cheaper and more approachable by a wider audience - say what you want about loving or hating Game Pass and Xcloud, but those are things that accomplish just that.
Yes, we can also point out that he said Halo Infinite would for sure be a launch game and then instead got delayed and Xbox Series X to this day lacks an exclusive game (and I want to be clear - I don't think Sony should get much credit either. The pack in game is the only real exclusive on PS5 atm. That remaster/remake is technically an old game brought back to life. It's impressive, but technically it's still an old game reborn. That base game is available elsewhere). Neither system had massive launch exclusives tbh.
But, they both successfully launched systems during a pandemic that continue to sell out as bigger and bigger games are starting to come that people might care about playing next-gen (or really, current gen) versions of. He has worked hard to make Game Pass valuable.
Phil Spencer started from a position of weakness and in 2021, has Microsoft's gaming division looking up. Jim Ryan started from a position of stength and honestly, sony is STILL strong. For now. But some of the way Jim Ryan words things rubs people the wrong way. So there is a fear that not only is microsoft starting to look better and better, but Jim Ryan is eroding a little of the luster of the PlayStation brand. In the end, I think PS brand is too big to fail anytime soon. But in a decade? Who knows what happens. It's possible Game Pass and Xcloud take over the world of gaming.