Since the first Xbox launched in 2001, Microsoft (NASDAQ:MSFT) has sold fewer devices than Sony’s PlayStation, but that may be changing.
Sony’s PlayStation 5 (PS5) and Microsoft’s Xbox Series X and Series S are neck-and-neck these years. PS5 outsold Xbox in Japan and Europe in July, but Xbox sold more in North America.
PS5 has sold 21.8 million units, while Xbox X/S has sold 16.1 million. PS4 outsold Xbox One by more than 2:1 in the previous generation. Microsoft has a legitimate shot at dethroning Sony in the console war because the ratio is much narrower this time.
Microsoft is Fighting More Fiercely.
Multiple platform distribution is replacing hardware dependence (consoles and PCs) in gaming. More gamers are subscribing to cloud gaming services, which provide many titles. These services emphasize game catalogs to attract subscribers.
Sony’s studios have a reputation for creating exceptional gaming experiences, so offering exclusive games has always been a plus. MSFT is starting to leverage its financial edge over Sony.
Microsoft (NASDAQ:MSFT) has made many acquisitions to bolster Xbox Game Studios. ZeniMax Media’s $7.5 billion purchase of Bethesda in 2020 was just the beginning. Microsoft’s $68.7 billion offer to buy Activision Blizzard will hurt Sony. MSFT’s fiscal 2023 ends in June, so the deal should be finalized.
Sony and Microsoft’s winning game conditions should be clear now. MSFT can beat Sony by offering the most franchises. Microsoft may win by expanding its base of Xbox customers, and extending Xbox Game Pass is part of that approach.
According to Statista, MSFT’s Xbox Game Pass reached 25 million users in 2021. PlayStation Plus has twice as many subscribers but only added 2 million last year. Netflix-style gaming services are the industry’s future battleground, and MSFT had the momentum entering 2022, which boosted console sales.
Over 3 billion people play video games, so who can reach the first billion? I’d bet on MSFT. Activision Blizzard will give Microsoft 361 million players, leapfrogging PlayStation’s 100 million accounts.
To complete the acquisition, Microsoft (NASDAQ:MSFT) may have to agree with the FTC not to make Call of Duty exclusive to Xbox. Sony’s worried.
Sony acquired Bungie, developer of former Activision franchise Destiny, two weeks after Microsoft’s Activision announcement. Activision sold Destiny’s publishing rights to Bungie in 2018 after poor sales. Sony’s acquisition of Bungie isn’t much of a Microsoft counterpunch.
MSFT Controls the Rules of the Game.
Sony’s current strategy shows a company playing defense as Microsoft (NASDAQ:MSFT) gains market share in console sales and Xbox Game Pass subscriptions.
Sony has recently made more attempts to distribute PlayStation games on PCs to broaden its audience, but it’s unclear if this is enough to keep up with MSFT.
Sony’s concern is that the video game industry is migrating from consumer devices to subscription services, MSFT’s strength.
Sony lacks $68 billion to purchase a game firm. MSFT’s businesses generate enough cash to buy any game studio for Xbox Game Pass. MSFT may have won the console war despite trailing Sony in sales.
Featured Image:
Author Shariq Khan 
