With over 25 million subscribers and 60% of the total revenue of 3.7 billion dollars in the gaming subscription market segment, Microsoft’s Xbox Game Pass service is the leader of the gaming subscription market. Microsoft’s goal has always been for its service to turn into gaming’s Netflix.
60 Percent of the Gaming Subscription Market Remains a Small Fraction
While Xbox Game Pass is far and away the best and most popular gaming service in the world, the service only amounts to a small fraction of the global gaming market. Despite in-roads made, most gamers continue to buy physical discs and purchase game downloads rather than subscribe to gaming streaming services. Gaming, as a whole, generates $81 billion a year, which means that streaming has plenty of room to grow before it turns into a “Netflix” or “Spotify” level of success.
That said, Microsoft is in prime position to lead that market segment for decades to come.
Sony Takes its Subscription PlayStation Plus Service to a New Level
On Tuesday, Sony announced the consolidation of PlayStation Plus and Now into one service geared towards competing with Microsoft. Sony’s system even at its most expensive tier ($17.99) will remain an inferior option to Microsoft’s $14.99 service.
Sony’s main attraction is its huge library of games that dates back to 1995. Some of these games will only be available through its cloud service, but it is PlayStation Plus’ biggest selling point.
Sony’s service launches in June, but Sony will not have day one exclusives on the platform (because they cannot really afford to do so) which continues to put its service at a disadvantage against Xbox Game Pass.
The Big Hurdle to Game Streaming Growth is…
Worldwide internet connections, or rather, the lack of consistent speeds worldwide. Many gamers do not have a connection fast enough to stream 4K games in playable states, which hinders the growth of said services. Game Pass has been a success because these games can be downloaded just like you would a normal digital game purchase.
The other issue is that neither Sony nor Nintendo are launching their new AAA titles on their respective services from day one. Nintendo, specifically, has no alternative to Microsoft or Sony at this point. Gamers will continue to plunge money for the biggest new releases, as long as these releases are not available from day one on subscription services.
Microsoft has made big strides on this department thanks to its larger-than-life pockets, and it is the reason its service dominates the game subscription market.
Xbox Game Pass Will Grow Over the Next Decade
Apart from Forza Horizon 5 and Halo: Infinite, most of Microsoft’s top tier titles like the eventual Elder Scrolls VI release are years away. However, it is likely that its subscription service will grow exponentially once these big hitters launch on day one on its service.
The future of gaming lies in subscription and streaming services, but it will take a while before these services overtake conventional physical and digital sales. At the moment, Microsoft is the gaming subscription service king.
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