The rise of digital media has increased the age of subscriptions, where the world’s largest companies are at war for literally hours of consumer days. The video streaming industry is often at the center of this discussion, but recent events have highlighted it Sony (Sony -0.52%) And Microsoft (MSFT 0.54%) At the forefront of subscription wars – here’s why.
Increase game subscriptions
Microsoft introduced its video game-subscription service Xbox Game Pass in June 2017 and its immense success has changed the industry. For 14.99 / month, the company gives members access to a wide library of games that can be played or downloaded with Xbox or PC. In the same style of Netflix Originals, Microsoft released its in-house developed titles on the first day of service, including Hello And Forza Horizon Available instantly for only a few Xbox exclusive members. Five years later, and Xbox game passes are on the rise. From 2020 to 2022, the number of members of the platform increased by 150%, from 10 million to 25 million members.
Despite being a tech giant like Google’s parent company, Xbox Game Pass has maintained its position at the top Alphabet, Stadia entered the market with its cloud gaming service. Stadia launched in 2019 and had difficulty convincing customers to accept its platform. Google did not disclose the number of subscribers after reaching 1 million in 2020, but internal sources reported that Stadia lost its target of “hundreds of thousands” of users in 2021.
Sony now plans to offer Xbox game passes for its money with its improved PlayStation Plus service. Sony had previously offered two subscriptions: PlayStation Plus, primarily for online capabilities, and PlayStation Now, which provided members with a streaming library of over 700 games. The updated PlayStation Plus integrated these services onto a single platform and launched on June 13th.
PlayStation owners can now choose from three different PlayStation Plus tiers: “Essential” is primarily online access, but the second-tier title is “Extra” and brings the service closer to a game pass. For 14.99 / month, members can download and play games from a library of popular titles, such as Marvel’s Spider-Man (2018) and Ghosts of Sushima (2020). The final category is “Premium”, which increases the capacity of the स्ट 17.99 / month cloud stream game.
War over time
Streaming and subscription wars are often discussed in the context of video platforms like Netflix and Disney +. However, in addition to video streaming, the fight also includes gaming, sports, audio subscriptions and social media. Research has shown that families use an average of 12.5 different entertainment sources, of which about half are considered “essential” and therefore less likely to be excluded. The same study found that about 66% to 67% of consumers see a game subscription as necessary. While this is positive, it is essential for this platform to provide compelling content to stay competitive.
The biggest draw for Xbox Game Pass members over the past few years has been the ability to instantly play Microsoft’s exclusive games through the service, saving $ 60 or more on new titles. As a result, Sony and Microsoft have recently acquired a number of game developers to expand their special game library.
In March 2021, Microsoft bought ZeniMax Media, the parent company of game developer Bethesda Softworks, for 7.5 billion. The Xbox company is also planning to buy Activision Blizzard Call of Duty Franchise, record $ 68.7 billion. In addition, Sony has taken on some developers over the past year, including the original manufacturers HelloBungie Inc., and Haven Studios.
Who will win
Stadia effectively withdrew from the competition, announcing in February that it would no longer develop special games for its platform. Sony and Microsoft have equally lucrative game libraries, though it remains to be seen how the PlayStation Plus will deal with Sony’s in-house developed games and whether members will be able to play them on launch day. However, called PlayStation-exclusive games Wandered The first service day release from a third-party developer in late July is a positive sign that other games could do the same. If they do, the PlayStation Plus will become an even closer competitor to the Xbox game pass.
Microsoft may have time, as the game pass has a long way to go to gain customer trust, but Sony is a fair competitor. Going forward, it will be important to note what developers each company acquires next. For example, Microsoft’s Activation Deal has more time to complete, which could be an indication of which direction the subscription race is heading. Like all subscriptions, customers tend to look for services that can offer the best products at the best prices.
Suzanne Frey, executive of Alphabet, is a member of the board of directors of The Motley Flower. Danny Cook has no place in any of the stocks mentioned. The Motley Fool has posts and recommends in Alphabet (A Shares), Alphabet (C Shares), Microsoft and Netflix. Motley is a flower disclosure strategy.