Analysts: New PS Plus 'Won't Have the Pull' of Xbox Game Pass, But It is 'Long Overdue' - NewsWilliam D'Angelo , posted on 01 April 2022 / 2,749 Views
Sony Interactive Entertainment today announced that it is launching an all-new version of PlayStation Plus in June that will be available in three tiers - Essential, Extra, and Premium.
Piers Harding-Rolls, an analyst at Ampere Analysis, speaking with GamesIndustry says Sony's new PlayStation Plus won't have the same pull as Microsoft's Xbox Game Pass.
"It won't have the pull of Microsoft's service," said Harding-Rolls. "Where I think Sony will try to be more aggressive is with windowing between release of its new games and them being added to the service, and when adding new releases from third party developers and publishers."
Michael Goodman, director of TV and media strategies at Strategy Analytics, added "Microsoft's chosen that day and date has been a critical factor for their success, and I think it has been. We will have to see how important that is to PlayStation fans. There is certainly an argument to be made that it is not critical. Nintendo has done a great job with Nintendo Switch Online -- it's been wildly successful just being a back catalogue product.
"However, Microsoft's big growth happened when they went day and date. It's worth noting they're not competing head-to-head on this. They're mostly talking to their existing install base."
Goodman did say there is a huge opportunity for growth for PlayStation as PlayStation Now is just five person of the PlayStation console install base, where over 40 percent of the Xbox install base has subscribed to Game Pass.
"40% of their install base is the benchmark [for PS Plus Extra or Premium]," he said. "But even if they get up to 20%, or even 15%, I would make the argument that that would be really successful. Maybe not by comparison, but certainly from a revenue perspective."
According to Goodman and other analysts, Sony combining PlayStation Plus and PlayStation Now into a single service is long overdue.
"Sony is long overdue combining these two products, because that's where the market is today," said Goodman.
"They have created an attractive product. Giving consumers the choice of hundreds of games, and combining the multiplayer is important. It's essentially a price cut for the subscription game-side of things. Instead of having two distinct products at $9.99, one which is really successful in PlayStation Plus, which something like 72% of its install base subscribes to.
"Versus the PS Now product, which something like 5% of its console install base subscribes to. So clearly in the consumer's mind, the current Now product has not had the value for consumers.
"Adding in hundreds of games, integrating the online part, and cutting the price... it greatly enhances the value."
IDC's Research Director of Gaming Lewis Ward said, "The bottom line is that the revamping of PS Plus is overdue and a welcome change. We expect it will achieve its primary goal, which is to nudge a higher share of PS Plus subscribers into the pricier tiers.
"The nomenclature simplification is pragmatic, although 'Extra' isn't exactly an exciting choice of brands. We'll see if Sony reveals anything about how subscribers break out by tier over time, but it doesn't appear to be a high bar to keep Premium subscribers at or above the four million mark [IDC's current estimate for PS Now subscribers] in 2022, while also landing a sizable new, download-only Extra subscriber base."
Ward added, "While the new service is simpler in many respects, it's still confusing under the covers. For example, in the Premium tier, subscribers will be able to download original PlayStation, PS2, PS4, PS5 and PSP games but not PS3 games. Moreover, subscribers won't be able to stream PS5 games, only download them via the new service.
"The PS Plus Premium service also won't be available in all countries where PS Plus is offered. The countries/regions without access to cloud-streaming won't be getting Premium but rather a download-only service called Deluxe.
"All these permutations, plus the upgrade path messaging for current subscribers, is bound to generate some near-term and possibly long-term confusion."
Harding-Rolls did say there this gives Sony an opportunity to increase its average revenue per user with the new PlayStation Plus service.
"This is an opportunity to drive higher ARPU [average revenue per user] subscriptions and build on the success of the current PS Plus service," Harding-Rolls said. "It will not necessarily result in many more overall PS Plus subscribers, although adding a content layer may convert more users and reduce PS Plus churn. Overall, it should establish a stronger commercial framework for its subscription catalogue proposition, which over time will allow it to introduce more compelling games into the service.
"Ampere Analysis data shows that Microsoft held 60% share of the Western [North America and European] games content subscription market in Q4 2021. In comparison, Sony held 7% share with PS Now. The Western market was worth $3.7bn in 2021, which was 4% of total spending on games across these regions."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at firstname.lastname@example.org or on Twitter @TrunksWD.