09/12/2021 - PIERS HARDING-ROLLS, LOUISE SHORTHOUSE
A potential revision of PlayStation’s subscription service strategy builds on existing strengths

PlayStation is planning to fold its two subscription services into a single offering according to a report by Bloomberg. While no details are officially confirmed, Ampere expects an overhaul of Sony’s gaming subscription services with 2022 a realistic relaunch date.

The report suggests that PlayStation Plus will absorb PlayStation Now, maintaining the Plus branding, and the resulting service will have three tiers:

  • Tier 1: Existing PlayStation Plus benefits
  • Tier 2: A large catalogue of PS4 games and, eventually, PS5 games
  • Tier 3: Extended demos, game streaming and a library of PS1, PS2, PS3 and PSP games

An integrated product strategy makes commercial sense

The integration rather than simple bundling of individual services makes sense, considering both PlayStation Plus and PlayStation Now are games services centred on the company’s console platforms. Even though PlayStation Plus is defined as an online console platform service the inclusion of regular free games does mean it has a content dimension. Microsoft pursued a similar strategy with the launch of Xbox Game Pass Ultimate back in April 2019, which integrated both Xbox Live, Xbox Game Pass and Xbox Game Pass for PC. 

However, if this tiering within the service approach is confirmed, it would suggest that the individual products will no longer be available as standalone subscriptions, which differs from Microsoft’s approach. Sony can do this if it focuses the product strategy on the base online console platform subscription of PlayStation Plus which has far bigger user numbers than the more expensive content subscription offer of PlayStation Now. Again, this differs from Microsoft’s approach with Ultimate, which focused on the Xbox Game Pass content service. Merging PlayStation Now with PlayStation Plus could combat brand confusion around the two services, offering greater clarity to consumers.

The inclusion of streaming distribution as a core proposition to the highest tier partially aligns with Microsoft’s approach, where Xbox Game Pass Ultimate permits cloud gaming. Shifting streaming to a separate tier underlines cloud gaming’s peripheral role at present in terms of distribution for most users. It future proofs the offer, provides opportunity for upsell, but does reduce the ability to introduce value-added streaming use cases to all subscribers. Sony could introduce smartphone device support for this tier.

There may also be space to expand to PC versions of Sony’s releases as they grow in volume. Although there are no Sony PC-only exclusives at present, it would likely drive interest from PC gamers – an audience which Microsoft is already actively courting with Game Pass.

A question worth asking is: Will this consumer facing overhaul also introduce a back-end overhaul in terms of the streaming infrastructure? Might this be the moment Sony transitions to Microsoft Azure for its cloud gaming service delivery? Ultimately, the technical challenge of transitioning older platform streaming infrastructure to Azure data centres may make this impossible. 

Sony has yet to display the commercial appetite to compete head on with Xbox Game Pass’ new release content

The content strategy of Microsoft’s Xbox Game Pass has evolved rapidly, expanding from catalogue titles to new first-party games, to now select, third-party titles being added day one at launch. The increasingly high caliber of the content has captured consumer interest driving adoption to over 18 million subscribers. Xbox boss Phil Spencer has stated that Game Pass is, for the moment, sustainable. However, as the consumer appetite for immediate access to top-tier games intensifies, so will the price of acquiring it.

Unlike Game Pass, there is no indication yet that Sony intends to add first-party games to its service on day one. Given Sony’s traditional lack of flexibility around exclusive titles and cross-platform play, it seems unlikely that high-profile, first-party games will launch directly into the service. This may be a consideration in the future, however. 

New, third-party releases are sometimes included in the monthly free games offered through PlayStation Plus, suggesting that Sony may try to compete on that level, rather than the first-party approach. An increase in the quantity and quality of day one, third-party releases offered to subscribers could justify the increased cost of higher tiers. 

Consolidation could address lack of exposure for PlayStation Now

PlayStation Now has always had a muted presence in comparison with the Xbox Game Pass offerings, and was not presented as a priority for Sony. There was little in the way of marketing until its effective relaunch in late 2019 when the price of the service was halved, and more appealing catalogue titles were added. In 2021 it breached three million subscribers – seven years down the line – whereas Sony’s other service, PlayStation Plus, is the biggest games subscription service on the market with almost 48 million subscribers.

Adding further tiers for existing users of PlayStation Plus will hugely increase exposure for what is currently the PlayStation Now content catalogue. Many PlayStation gamers remain unaware of PlayStation Now, and exposing Plus subscribers to the content via a tiered strategy will surely increase consumption.

PlayStation has a rich reserve of games catalogue and video content to exploit

Ampere Games Subscription data shows that PlayStation Now currently boasts a library of more than 900 titles – and 711 of these are unique to the service. This is, in part, thanks to its extensive history of PlayStation console exclusives. By comparison, the Xbox Game Pass Ultimate catalogue is just over half the size, but with a dominant share of newer content: the majority of the titles in the service were first released in 2018 or later. 

Sony is actively experimenting with the inclusion of video content, an area where it can differentiate. PlayStation Plus Video Pass is currently being tested in Poland, whereby PS4 and PS5 users with PlayStation Plus subscriptions can access 20+ movie and TV series from Sony Pictures. New content is added every three months. Sony also owns Funimation and the recently-acquired Crunchyroll – both popular anime streaming services which are set to be consolidated, and could also be rolled into a tier of PlayStation Plus. Sony has a breadth of content at its disposal.

Ampere Games Consumer* data indicates that games service subscribers are frequently churning in order to subscribe to non-gaming entertainment services. This highlights the growing overlap between games and other forms of media in terms of consumer mind and wallet-share, as well the accelerating shift towards consolidation of various entertainment forms within single services.

*Bi-annual survey across 12 global markets; 2,120 respondents per market, ages 13-64


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