How Sony's PlayStation has rivaled Microsoft and Nintendo in the console wars

CNBC takes a look back at the how the Sony's PlayStation brand created the best-selling video game console of all time.

Mar 9, 2024 - 21:04

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How Sony's PlayStation has rivaled Microsoft and Nintendo in the console wars

It's been three decades since the Sony PlayStation first brought to life some of the video game industry's most beloved franchises.

Sony Interactive Entertainment president and CEO Jim Ryan is set to retire in March 2024. His tenure began in 1994, the same year the PlayStation launched in Japan. The gaming console expanded into the U.S. a year later in 1995.

"Before the launch, there was considerable uncertainty. We were moving into a space that had two pretty entrenched occupants, Nintendo and Sega," Ryan said.

Shawn Layden, the former chairman of Sony Interactive Entertainment Worldwide Studios, credits the early success of the PlayStation to a joint venture between Sony Music and Sony Electronics.

"I think from the beginning, the company knew just being a tech company wasn't enough. You had to bring some secret sauce in from the entertainment world," Layden said.

The PlayStation 2 was released in 2000 and is still the best-selling video game console of all time with over 155 million consoles sold, according to company financial statements.

"We went into markets where video gaming had never really been a thing. So in southern Europe, for example, Italy and Spain and places like the Middle East, we established a gaming culture where none had existed," said Ryan.

But the PlayStation's 30-year history did not come without speed bumps and the future remains uncertain. Most recently, Microsoft's $69 billion Activision Blizzard acquisition presented a major threat to Sony's long-standing gaming business.

"The big controversy is obviously that Activision is a big producer of games. And the concern was that with Microsoft acquiring them, they would own pretty much what is left of independent big studios and not share the games over with PlayStation," said Creative Strategies President Carolina Milanesi.

The Japanese gaming giant cut its sales forecast for PlayStation 5, its most recent console released in 2020, on Feb. 14 when it warned of lower demand. Sony laid off 900 workers, or 8% of its PlayStation division on Feb. 27.

Watch the video to learn more about the story of Sony's PlayStation and to hear what is next for the company.