Sony PlayStation and Microsoft Xbox market strategies are increasingly different

The next battle in the 50-year-old console war will be led by Sony PlayStation and Microsoft Xbox, according to the latest research report from Strategy Analytics, "Global Game Console Forecast 2012-2025". The report points out that the market strategies of Sony PlayStation and Microsoft Xbox are increasingly diverging; Sony has always focused on improving the big-screen gaming experience, while Microsoft is more concerned with providing games on as many devices as possible. The business models have also diverged as Xbox has shifted to a subscription business while Sony has retained the traditional one-time payment method.

Both companies are set to launch new consoles this quarter, and the study predicts Sony will again lead Microsoft worldwide, with 69.1 million PS5 consoles and 40.4 million Xbox Series X/S devices in 2025. However, assessing the overall winner will be a more complex task as the video game business will increasingly rely on cloud gaming and multi-screen strategies.

Research from Strategy Analytics predicts that global PS5 shipments will reach 4.6 million units by the end of 2020, while Xbox Series X/S shipments will be 3.9 million units. Xbox Series X/S shipments will peak at 10 million units in 2024, while PS5 shipments will peak at 16.5 million units in 2023-24.

Michael Goodman, Director of TV and Media Strategies at Strategy Analytics, said: “Microsoft is now clearly embracing a multi-screen strategy based on cloud gaming, with Xbox Game Pass as the central hub of its customer relationship; as long as its titles appeal to users across smartphones, PCs and consoles, it has a good chance of long-term success with its subscription business model. But it faces a number of challenges, not least in convincing game publishers of the opportunity to grow revenue.”

David Watkins, Research Director for Connected Home Devices at Strategy Analytics, added: “Sony has won several head-to-head battles with Xbox and sees no reason to abandon its long-standing strategy of delivering the ultimate big-screen experience. But Sony should also carefully monitor changes in gaming behaviour across the market to ensure it does not miss out on growth opportunities.”

Strategy Analytics analysts point to a number of other issues that will impact the gaming industry over the next decade and beyond, including:

- How does the relative perceived value of a game change based on screen size and user experience?

- How many people are willing to pay different monthly fees to play games on a subscription basis? What factors determine this acceptance?

- How will the game development, publishing and distribution ecosystem evolve in response to changes in demand and business models?