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- But PlayStation Plus has become outdated.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.