gaming stocks

Sony Is Entering The Games as a Service Space With Subscription Launch

Sony has finally joined its rivals in providing a subscription-based gaming service, which paints a bright future for the industry.

Following the successful launch of Xbox’s Game Pass last year, the top video game players around sat up and took notice of subscriptions in gaming. 

And now, arguably gaming’s biggest player, Sony, has joined the race.

Is it cake? No, just another subscription service…

Food, books, tech, gaming, and much, much more; life as a subscription service is now at our fingertips, and it’s certainly a lucrative business model.

Sony is aware of this as it just announced its three-tier Playstation Plus subscription service last night. Launching in June, the basic PS Plus Essential costs $10 per month and offers players two free games each month and access to online multiplayer. The most expensive package is PS Plus Premium, which includes more than 700 streamable games across Playstation’s entire catalog of models, and costs $18 a month. 

But why is Sony doing this? 

A lot of this is related to rival Microsoft — specifically its Xbox arm — and its success in subscription as well as its aggressive acquisition strategy in gaming, most recently acquiring AAA developer, Activision Blizzard. While Xbox is considered the “Netflix of gaming”, Playstation, being the late player to the scene with a reduced — yet arguably higher quality — catalog, can be considered the Apple TV+.

But gaming is much more lucrative for Sony than Microsoft, representing 30% of its total 2021 revenue compared to Microsoft’s 10%. Creating a model that keeps users engaged for longer than a single $70 game sale could be an important step in the next stage of gaming revenue, which is being forced to adapt to the “instant consumer” — who just want a lot of options, immediately, in one place. 

With gaming’s biggest player now adopting a subscription model, investors may want to watch how the space grows in 2022 and onward, as the days of AAA title booms could be numbered.

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