PlayStation vs Xbox
Video game consoles have been around for almost 50 years, with the creation of the Odyssey in 1972. In the case of Sony’s (NYSE: SONY) console, the PlayStation, it has been on the market since 1994 (27 years). PlayStation’s main competition is Xbox, Microsoft’s (NASDAQ: MSFT) console, which recently celebrated 20 years since its first console was released.
This competition, that has arguably been going on for 20 years, has had PlayStation in the lead most of the time. But in the last few years things have evened out. One of the reasons is the shift in the type of business in the industry.
In the beginning consoles were the main source of profit for companies, but then game sales became the main source of profit (and partly still are). For example, a console currently costs between $400 and $500 USD, while a “AAA” video game costs between $60 and $80, i.e. 6 games are equivalent to a new console. The high price of games may be one of the reasons why video game subscription services have become more popular. These services offer dozens of games, plus exclusive discounts with the payment of a monthly subscription. Sony’s console side offers PlayStation plus for 6.99 USD per month. Xbox also has its service, Xbox Game Pass with the difference that it can also be purchased for PC. The cost for console or PC is 9.99 USD per month.
In this competition to offer the best service, Microsoft has made it clear that it wants to get the most users. In recent years the company has been massively buying video game studios, currently the number reaches 23 purchased studios. With the inclusion of major studios such as Bethesda Game Studios or Ninja Theory. All these studios are part of Xbox Game Studio so all the games they make will be available on Xbox Game Pass from the day of launch as indicated on its website.
But these are not the only video game services that are growing. In the last couple of years video game streaming services have emerged, meaning that you don’t need to buy consoles to enjoy games instantly without having to download them.
With this, PlayStation is ahead of the curve with PS Now for $9.99 USD, which gives you hundreds of games with the ability to play PS exclusives on PC for the first time. This is not the only notable streaming service, Google (NASDAQ: GOOGL) offers Stadia for the same price of 9.99 USD with a diverse library and discounts to buy games. At the moment Xbox does not offer a similar service so in this regard it is at a disadvantage with the aforementioned companies.
How will the competition continue?
It seems that these companies with long years of history will have more years ahead of them and what started as a console competition, will later be all about who offers the best video game and possibly in the next few years it will be all about who offers the best video game streaming service.