Microsoft Could Outspend Sony on Advertisements for Gaming Consoles
The video gaming industry is a multi-billion dollar market that continues to evolve, with various business models such as games as a service, microtransactions, and downloadable content. In line with the ever-evolving industry, both Sony and Microsoft continue to explore different growth catalysts such as innovation and tapping into potential opportunities.
Why Microsoft is Leading the Way in the Gaming Industry
Microsoft is an industry leader in the gaming space with a subscription service called Game Pass. Additionally, the company is spearheading innovation by investing in the highly-popular “metaverse” project. Unlike Sony, Microsoft is in an enviable position that allows it to outspend its competitors.
The Netflix of Gaming
Following the successful launch of Netflix and Spotify subscription services, Microsoft saw the potential of creating the first Netflix-esque video game subscription service. With the company’s focus shifting from brick and mortar games and hardware sales to assembling a range of studios whose games could be played on multiple platforms, Microsoft began exploring a subscription service called “Game Pass”. The platform has since attracted over 25 million subscribers, placing great pressure on competitors such as Sony.
Microsoft’s Metaverse Project
Microsoft’s acquisition of Activision Blizzard for $69 billion positions the company to explore the highly-popular “metaverse” project. Aimed at creating virtual worlds, this project has the potential to bring together audiences across different games and even movies to create a new world order.
Why Sony Might Be in Trouble
Sony, on the other hand, is not leading the way in the gaming industry. With Microsoft’s dominance in the subscription service market, costly Sony-exclusive content might not lure enough subscribers. Furthermore, the company is in danger of losing exclusivity deals, such as its exclusive partnership with a game developer, to its competitors.
Lagging Behind with Subscription Services
Sony PlayStation Now has been viewed as an inferior offering compared to Microsoft’s Game Pass. PlayStation Now mostly offers older titles and is not available on all devices such as smartphones. Additionally, PlayStation Now is more expensive than Game Pass, limiting its subscriber potential.
Likely to Lose Exclusivity Deals
The gaming industry is constantly evolving, and new games and projects are always in the pipeline. Sony’s exclusivity deals with game developers may fall through as more developers are enticed by Microsoft’s offerings. On the other hand, Microsoft’s recent acquisition of Activision Blizzard places it in the enviable position to have access to exclusive titles.
Microsoft Could Outspend Sony on Advertisements
Microsoft is in a unique position to spend more on advertising compared to Sony. With more disposable income and a widespread of products, Microsoft could outspend Sony, making it the more visible company, and therefore, more likely to attract the most subscribers. Currently, Sony’s PlayStation 5 is selling better than Microsoft’s Xbox Series X, but with better advertising and a unique, innovative approach, Microsoft might outperform Sony in the long run.
Microsoft and Sony continue to compete in the gaming industry, with different approaches as they explore growth catalysts. While Microsoft is leading the way with a subscription service and an acquisition of Activision Blizzard to explore the metaverse project, Sony is struggling to keep up. Microsoft’s enviable position in the gaming industry space and potential ad spend may provide the needed boost to attract the most subscribers.
1. What is Microsoft’s Game Pass?
Game Pass is a subscription service that offers subscribers a massive library of games they can play on multiple platforms.
2. What is the “metaverse” project?
The metaverse is a futuristic project aimed at creating virtual worlds where audiences can come together to experience different games, movies, and much more.
3. Why is Sony struggling to keep up with Microsoft?
While Sony’s PlayStation 5 is still selling, the company might be stretched thin with costly exclusive deals. Additionally, Sony’s PlayStation Now subscription service pales in comparison to Microsoft’s Game Pass, which attracts more subscribers.
4. Why is Microsoft a more visible company compared to Sony?
Microsoft has more disposable income to outspend Sony in advertising. Additionally, Microsoft has a widespread of products that make it a more visible brand.
5. Could Microsoft eventually outperform Sony in the gaming industry?
It is possible with better advertising and unique offerings such as the metaverse project, Microsoft might outperform Sony in the long run.