Entertainment

Sony remains unconvinced of a subscription-first future for gaming

PlayStation’s answer to Xbox Game Pass shows just how wary Sony is of subscription gaming.

PlayStation Plus

Sony announced a refresh of its PlayStation Plus membership, but with two new tiers featuring hundreds of games.

Image: Sony

Sony revealed its much-anticipated answer to Xbox Game Pass on Tuesday, but it wouldn’t be fair to characterize it as such now that we know just how understated the company’s new subscription push is.

Instead of giving the product a big flashy livestream or debuting it at last week’s Game Developers Conference, Sony instead published a blog post from PlayStation chief Jim Ryan. It outlines how it intends to expand its current PlayStation Plus membership program with two new tiers that include more free games and cloud streaming. It’s a far cry from the all-in subscription push some industry watchers were anticipating, and it illustrates just how wary Sony is of following in the footsteps of Microsoft.

Much of PlayStation Plus is remaining the same. Sony’s longest-running PlayStation subscription product has been PS Plus, which costs $60 annually for access to online multiplayer and a smattering of free games throughout the year, among other perks.

  • But PlayStation Plus has become outdated. Many free-to-play games like Fortnite, Apex Legends and Call of Duty: Warzone skirt the subscription requirement, making it less likely a new PlayStation owner feels compelled to sign up. Sony recognizes this, and it’s adding two new tiers with hundreds of free games, most of which are from its back catalog, and combining it with its PlayStation Now cloud gaming platform.
  • PlayStation Plus Extra, for $15 a month, will include “blockbuster hits from our PlayStation Studios catalog and third-party partners,” including some PS5 games like Spider-Man: Miles Morales and Returnal. The highest tier, PS Plus Premium for $18 a month, will include 340 additional classic games and cloud streaming, but limited to PS3 games and titles available on PS Now. Both include almost 50% discounts if billed annually.
  • But it’s not clear which third-party partners Sony has signed up, and whether that list will include games from Microsoft-owned studios like Bethesda or Activision Blizzard. The service also won’t include new PlayStation Studios titles the day they release, as Microsoft does with Game Pass.
  • NPD game analyst Mat Piscatella said PlayStation’s subscription was “in need of a refresh and streamlining, and they got it,” adding, “Not revolutionary, but it didn't need to be. It's fine.”

Sony is not yet convinced subscription gaming is even viable. As it stands right now, most gaming subscriptions outside Game Pass are a nice, additive business that brings in more customers who might otherwise not have spent any money on the platform. To go further than that, as Microsoft does, would be too risky.

  • "We feel like we are in a good, virtuous cycle with the studios," PlayStation CEO Jim Ryan told Gamesindustry.biz on Tuesday, "where the investment delivers success, which enables yet more investment, which delivers yet more success. We like that cycle and we think our gamers like that cycle."
  • As for why the service won’t include new PlayStation Studios games on day one, “this is not a road that we've gone down in the past. And it's not a road that we're going to go down with this new service,” Ryan added. “We feel if we were to do that with the games that we make at PlayStation Studios, that virtuous cycle will be broken. The level of investment that we need to make in our studios would not be possible, and we think the knock-on effect on the quality of the games that we make would not be something that gamers want."
  • It’s important to note that Microsoft is only able to do what it does with Game Pass because its primary businesses — productivity software, operating systems and cloud computing — are among the most lucrative in the world, and they give the Xbox business a war chest Sony simply cannot compete with. Microsoft’s current market cap is 18 times that of Sony’s.

Subscription gaming is far from a slam dunk. The economics of the game industry — and how slow the market has been to adopt streaming and subscriptions as movies, music and TV have — mean that no single business model will likely win out anytime soon. In that way, Sony is being prudent and likely rightfully conservative about pushing too hard in one direction.

  • Microsoft’s investments in the cloud and subscriptions were designed to help dig it out of a deep hole of its own making during the Xbox One era, and it’s been working. Microsoft’s first-party games are seeing record levels of players, and Game Pass is growing, albeit slowly.
  • But subscription and cloud gaming is a tiny slice of the overall market, representing just 4% of North America and Europe game markets, or roughly $3.7 billion, according to a recent study from Ampere Analysis. Of the available services, only 5% are cloud-only offerings, while a majority (60%) use Xbox Game Pass. The study found that most Game Pass users download their games and do not stream them at all.
  • "Subscription has certainly grown in importance over the course of the last few years," Ryan told Gamesindustry.biz. "But the medium of gaming is so very different to music and to linear entertainment, that I don't think we'll see it go to the levels that we see with Spotify and Netflix.”
  • Ryan pointed to the rise of live-service gaming as one hurdle for subscription platforms. Live-service games, he said, are “effectively subscription services in themselves,” and they don’t meld well with a Netflix- or Spotify-style future because they are often free-to-play.
  • Earlier this year, Sony purchased Destiny developer Bungie for $3.6 billion, and the company said it intends to use its tech and talent to build numerous live-service games over the next decade.

For now, it looks like Sony is biding its time. Ryan said “things can change very quickly in this industry, as we all know,” and that he never would have anticipated PlayStation Studios games finding such success on the PC platform even just four years ago. But the game industry has grown considerably in the past two years, and consumers are playing games and spending money on them at record levels. Having a subscription product that appeals to hardcore fans is a no-brainer, and the new PS Plus lays the groundwork for something more ambitious down the line.

Subscription and cloud gaming are very obviously fast-growing, potentially major parts of the business, and the question now is how developers intend to make room for them and whether there ever will be a moment where the scales tip away from standard retail. Microsoft is standing alone with Xbox Game Pass, at least for the time being, and it may take years, perhaps even decades, before we know just how early it might be to gaming’s big distribution shift.

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories
Bulletins