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  • But PlayStation Plus has become outdated.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.

Policy

Musk’s texts reveal what tech’s most powerful people really want

From Jack Dorsey to Joe Rogan, Musk’s texts are chock-full of überpowerful people, bending a knee to Twitter’s once and (still maybe?) future king.

“Maybe Oprah would be interested in joining the Twitter board if my bid succeeds,” one text reads.

Photo illustration: Patrick Pleul/picture alliance via Getty Images; Protocol

Elon Musk’s text inbox is a rarefied space. It’s a place where tech’s wealthiest casually commit to spending billions of dollars with little more than a thumbs-up emoji and trade tips on how to rewrite the rules for how hundreds of millions of people around the world communicate.

Now, Musk’s ongoing legal battle with Twitter is giving the rest of us a fleeting glimpse into that world. The collection of Musk’s private texts that was made public this week is chock-full of tech power brokers. While the messages are meant to reveal something about Musk’s motivations — and they do — they also say a lot about how things get done and deals get made among some of the most powerful people in the world.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Fintech

Circle’s CEO: This is not the time to ‘go crazy’

Jeremy Allaire is leading the stablecoin powerhouse in a time of heightened regulation.

“It’s a complex environment. So every CEO and every board has to be a little bit cautious, because there’s a lot of uncertainty,” Circle CEO Jeremy Allaire told Protocol at Converge22.

Photo: Circle

Sitting solo on a San Francisco stage, Circle CEO Jeremy Allaire asked tennis superstar Serena Williams what it’s like to face “unrelenting skepticism.”

“What do you do when someone says you can’t do this?” Allaire asked the athlete turned VC, who was beaming into Circle’s Converge22 convention by video.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

Is Salesforce still a growth company? Investors are skeptical

Salesforce is betting that customer data platform Genie and new Slack features can push the company to $50 billion in revenue by 2026. But investors are skeptical about the company’s ability to deliver.

Photo: Marlena Sloss/Bloomberg via Getty Images

Salesforce has long been enterprise tech’s golden child. The company said everything customers wanted to hear and did everything investors wanted to see: It produced robust, consistent growth from groundbreaking products combined with an aggressive M&A strategy and a cherished culture, all operating under the helm of a bombastic, but respected, CEO and team of well-coiffed executives.

Dreamforce is the embodiment of that success. Every year, alongside frustrating San Francisco residents, the over-the-top celebration serves as a battle cry to the enterprise software industry, reminding everyone that Marc Benioff’s mighty fiefdom is poised to expand even deeper into your corporate IT stack.

Keep Reading Show less
Joe Williams

Joe Williams is a writer-at-large at Protocol. He previously covered enterprise software for Protocol, Bloomberg and Business Insider. Joe can be reached at JoeWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Policy

The US and EU are splitting on tech policy. That’s putting the web at risk.

A conversation with Cédric O, the former French minister of state for digital.

“With the difficulty of the U.S. in finding political agreement or political basis to legislate more, we are facing a risk of decoupling in the long term between the EU and the U.S.”

Photo: David Paul Morris/Bloomberg via Getty Images

Cédric O, France’s former minister of state for digital, has been an advocate of Europe’s approach to tech and at the forefront of the continent’s relations with U.S. giants. Protocol caught up with O last week at a conference in New York focusing on social media’s negative effects on society and the possibilities of blockchain-based protocols for alternative networks.

O said watching the U.S. lag in tech policy — even as some states pass their own measures and federal bills gain momentum — has made him worry about the EU and U.S. decoupling. While not as drastic as a disentangling of economic fortunes between the West and China, such a divergence, as O describes it, could still make it functionally impossible for companies to serve users on both sides of the Atlantic with the same product.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories
Bulletins