Sony (NYSE: SNE) recently confirmed that it is developing a next generation PlayStation console. In an interview with The Financial Times Sony's CEO Kenichiro Yoshida stated that it was "necessary" for Sony to develop a next generation console, but refused to call the upcoming device "PlayStation 5".  Kenichiro revealed no further details about the upcoming console, but Sony investors should follow this news since the company's Game & Network Services (G & NS) unit has become its core growth engine in recent years.
Sony acclaimed the device's growth for robust sales of PS4 software, especially through PlayStation Network. Sony has sold almost 82.7 million PS4s since the console launched in late 2013, according to Vgchartz, making it the best-selling current gaming console in the world. Nintendo handheld 3DS ranks others for PS4, with 72.7 million shipments, followed by Microsoft . ] s 38.9 million Xbox One shipments. Nintendo's newer Switch Console, launched last year, is fourth with 20.4 million shipments.
Both Sony and Microsoft upgraded the consoles over the past two years to meet the higher graphical requirements of modern games and add support for 4K content. Sony launched the PS4 Pro in late 2016, and Microsoft launched Xbox One X by the end of 2017. Sales of both consoles are included in the current numbers for PS4 and Xbox One.
What do we know about PlayStation 5 so far?
Sony's original PlayStation lasted just over five years before PS2, the sequel, was launched in 2000. The PS2 lasted over six years before the PS3 arrived, and the PS3 lasted seven years before the PS4 was launched.
Based on the earlier launches, many industry supporters waited for Sony to launch the PS5 between 2018 and 2020. The launch of the PS4 Pro as a "half-upgrade" could, however, extend the current cycle by 2020.
Earlier this year, Sony told the Wall Street Journal that next-generation PlayStation probably would not come to 2021. Wccftech also claims that Sony will use AMD s custom APUs (like PS4) in its new console, and the chip maker develops its new Navi graphics architecture specifically for the device.
Focus on VR and Sky Gaming
We do not know much about the next generation of PlayStation, but we know that Sony is likely to build it with two key markets in mind – virtual reality (VR) and cloud gaming.
Sony launched its VR headset, PlayStation VR, by the end of 2016 to complete the launch of PS4 Pro – providing smoother VR performance than the original console. Sony revealed that it had sent 3 million PSVR devices in late July – which was a high figure for the new VR market, but a little one compared to its total PS4 shipments. Therefore, it is highly likely that the PS5 will be built with high-end VR games in mind, and possibly even include a next PSVR to bring more players and developers on board.
Sony also has a big start in the cloud game market with PS Now, the skate platform it launched in 2015. The platform, which streams PS2, PS3 and PS4 games for PS4 consoles and Windows PCs, now offers over 650 titles – something that making it the most well-developed cloud gaming platform in the world.
PS Now faces lots of fresh competition from new competitors, such as Microsoft's Project xCloud and Alphabet Google Project Stream, so Sony is likely to strongly promote the integration of PS Now – along with PlayStation Network – in its next generation PlayStation.
The ongoing growth of Sony's gaming business compensates for many of its failures in its rolling movie, mobile device and semiconductor operations last year. Analysts expect the development to continue and increases Sony's revenue and earnings by 1% and 21% this year, respectively.
We will not see Sony's next-generation PlayStation anytime, but it will probably make Sony's gaming device an even greater part of its overall business – helping the Japanese conglomerate counteract the more volatile growth of its weaker businesses.
Suzanne Frey, a leader in the Alphabet, is a member of The Motley Fool's Board. Teresa Kersten is employed by LinkedIn and is a member of The Motley Fool's Board. LinkedIn is owned by Microsoft. Leo Sun has no position in any of the above-mentioned shares. Motley Fool owns shares and recommends Alphabet (A-shares) and Alphabet (C-shares). Motley Fool has an information rules.