Sony launches a counter-offensive with a subscription service upgrade for Sony Game Pass.
Sony Group Corp.'s redesign of its PlayStation subscription service ( Sony game pass ) is a significant step toward parity with Microsoft's rival Game Pass, analysts say, however delaying new releases may dampen interest.
When it launches in June in the United States, Europe, and Japan, Sony said its expanded PlayStation Plus subscription will provide hundreds of titles for a fixed monthly charge, including recent bestsellers like "Spider-Man: Miles Morales."
According to Sony Interactive Entertainment CEO Jim Ryan, the service would not include new releases, but customers will still be able to access big-budget blockbusters like "Returnal" and "God of War."
"From PlayStation Studios, there will be more, and all of the main publishers will be represented," Ryan stated.
Sony is largely regarded as the console market leader, having sold 17 million PlayStation 5 (PS5) devices despite chip shortages, but has been under pressure to adapt to the rise of Netflix-style gaming subscription services.
The new Sony service combines PlayStation Plus, which has 48 million subscribers and only delivers a few free games each month, with PlayStation Now, which has 3.2 million users with a library of games to download and watch.
There are three price categories, ranging from $9.99 to $17.99 per month or $59.99 to $119.99 per year.
PlayStation Plus Essential, the cheapest option, appears to be identical to Sony's present offering.
PlayStation Plus Extra adds a library of PS4 and PS5 games to the PlayStation Plus service.
PlayStation Plus Premium includes access to a larger catalogue of older games, cloud streaming in major areas, and free game trials for a short time.
According to Lewis Ward, IDC's head of game research, such simplification is "far overdue."
"The number of PlayStation customers in the highest two levels will tick increase over time," Ward added, "which is unquestionably a primary rationale for this adjustment."
Analysts had expressed concern that, given the expensive cost of generating new games, pressure to package additional material with subscribers could eat into profit at Sony's prized games division.
Along with the subscription service, Sony will try to maintain new game sales.
"I believe this change will enhance margins since more players will be drawn to higher-cost subscriptions," said Piers Harding-Rolls, Ampere Analysis' head of games research.
"If content acquisition expenses arise, Sony will have to balance that with the additional money generated by the PS Plus subscriber base," he continued.
GAME WITH HIGH Stakes
Microsoft is aggressively expanding Game Pass, which already has 25 million customers, by adding new titles on their release days and purchasing companies to broaden its offers.
The Redmond, Washington-based company bought Activision Blizzard, the publisher of "Call of Duty," for $68.7 billion in January.
Sony, which has created its own in-house studio network, responded by paying $3.6 billion for Bungie, the publisher of "Destiny," with many analysts expecting more deals.
According to Ampere Analysis, Microsoft has taken an early lead in subscriptions, accounting for 60% of gaming subscriptions in North America and Europe, compared to 7% for Sony.
Subscriptions account for only 4% of total gaming spending.
"PlayStation believes it is smarter for them and third-party publishers to put older titles into the subscription plan so that new games may maximise their earning potential during their launch dates," according to Ward of IDC.
According to Ampere's Harding-Rolls, this hesitancy means Sony's offering "won't have the draw of Microsoft's service."
Sony's new pricing is thought to be competitive.
The $120 annual cost for the premium tier compares to $180 for Game Pass Ultimate.
Both companies provide cloud gaming, with Sony users being able to stream titles to their consoles and computers.
Cloud gaming is considered the industry's future because it eliminates the need to download or install games on a console or PC.
This poses a danger to the console industry, whose operators have traditionally served as gatekeepers.
An annual subscription to the mid-tier PlayStation Plus Extra, which does not include cloud gaming, costs little over $8 per month, against $9.99 for the Game Pass.
"Value and pricing of that nature would simply not be possible if we put our new games into the service as soon as they were released," Sony's Ryan explained.
Game Pass customers, according to Microsoft, play more games and spend more money on games, a sentiment shared by Sony.
"It all boils down to involvement," Ryan explained.
"When you get people interested in your platform, revenue is usually the next step."