With the Sony rather unceremoniously dropping PlayStation 5 preorders without warning yesterday (despite prior claims there would be at least some warning), we finally got the full official picture on what the cost of next-gen gaming will look like for console fans.
The PlayStation 5 Digital Edition comes in at $399, with its disc-based cousin hitting $499 for a direct showdown with the Xbox Series X. The outlier is, interestingly, Microsoft's worst-kept-secret, the Xbox Series S — which is just $299.
In years passed, Microsoft's $249 Xbox One S "All-Digital" experiment turned out to be a success, despite skepticism across the board. Now both Sony and Microsoft are gunning for this emerging digital-only economy, where the margins on game sales are far superior, cutting out retailers almost entirely, while also killing the used game sales market in the process. Where Microsoft and Sony are sharply diverging is on the aftersale value proposition.
Sony's PlayStation beats Microsoft's Xbox a lot of things, but in 2020, value is objectively not one of them.
The small print
Sony's masterful management of the games media continues with the PlayStation 5 price reveal, which came hot on the heels of mysterious rumors of a console shortage, which Sony swiftly denied. Regardless, Bloomberg's report was enough to spook investors, driving down Sony's share price, and making waves among that all-important first-come-first-serve hardcore early adopter segment. Regardless of whether or not those rumors were genuine, the PlayStation 5 was likely to sell out regardless, as consumers flock to console gaming in an unprecedented global pandemic that is only likely to get worse as we head towards the holiday season.
Sony managed to get the price of its digital PS5 down to $399, putting it $100 lower than the Xbox Series X. The price disparity allows mainstream journalists with only a surface understanding of the industry and a bias to pander to whichever system is likely to be more popular with their audience to claim that the "PlayStation 5 is cheaper than the next-gen Xbox," omitting all the obvious details.
Among all the hubbub, you'd be forgiven if you missed the fact that Sony is joining other AAA publishers by dropping a fairly hefty price hike on its games, in some cases making a mockery of exchange rates in the process. PlayStation 5 games will go from $60 to $70 in the US, but will jump from £50 to £70 in the UK, a whopping $25 markup.
There's a compelling argument that game prices should've increased years ago. Video game project budgets are ballooning to meet the increasing standards set by industry-leaders like Sony. Publishers are squeezing every ounce of aftermarket upsell they can into their games with post-sale microtransactions and similar mechanics while expecting more of their developers, who often work under intense conditions with long hours. To that end, Microsoft and other publishers holding on to $60 may well follow suit. But with Xbox Game Pass, Microsoft has effectively promised that it doesn't matter.
Whichever side of the argument you fall on about the value of a single AAA game, for the consumer, the clear value winner –even when you disregard the looming economic uncertainty– is Xbox Game Pass and Xbox All Access.
Xbox Game Pass and Xbox Series S is a value king
While Sony announced some very limited form of Xbox Game Pass with extra offerings to PlayStation Plus subscribers, it also went on record this morning to say it doesn't think Microsoft's Xbox Game Pass model is sustainable.
For hardcore gamers, a question of quality still hangs over Xbox Game Studios.
It's hard to take Sony's word at face value these days, considering they also said just a few months ago that it wouldn't be putting out cross-gen games between PS4 and PS5, criticizing Microsoft, only to U-turn and do just that.
With Sony's propensity for bending the truth, it's certainly possible they could one day do another U-turn and begin putting its headline titles like God of War, Horizon Zero Dawn, and others day-and-date into a subscription service, similar to Xbox Game Pass. At that point, Microsoft could have a bit of a problem on their hands (more on that in a moment). It's not the case in 2020 or potentially for the foreseeable, though, making Xbox Game Pass the defacto best bang-for-your-buck way to play this holiday season. Ideal for parents, thanks to its price and Microsoft's Family Safety app, and ideal for people who graze and perhaps don't want to spend $70 a pop on the latest games. Xbox All Access also lets you spread out the cost of Game Pass and a console over two years, significantly reducing the day-one cost of entry.
Even beyond that, the vast majority of displays out there are still 1080p. We haven't shifted over to 4K UHD as the global universal display standard. That makes the Xbox Series S, designed to max out at 1440p, a more sensible purchase for practically anyone who doesn't have a 4K set. The CPU, at the very least, matches the PlayStation 5 and Xbox Series X, meaning games should run just as smoothly, even if they sacrifice some visual potency in the process.
Microsoft is effectively promising that all of its first-party games, from Halo, Forza, Gears, and many, many more are launching day-one into Xbox Game Pass as well, creating an immense amount of gameplay hours for $15 a month. And while that may not sway any of PlayStation's existing customers from PlayStation 5 fully, it potentially creates a no-brainer impulse purchase out of the Xbox Series S as a companion console for indulging in some of Microsoft's games without breaking the bank. Also, for future gamers and youngsters, I think parents will find the Xbox Series S as an excellent entry-level entertainment device that not only plays games, but can also throw in Disney+ and Netflix, something the Nintendo Switch is currently unable to do.
A very different console war
Even with the undeniable value of the Xbox Series S and subscriptions like Xbox All Access and Xbox Game Pass, I don't foresee that Xbox hardware will shift Sony from the top spot any time soon. Generation 8 was the wrong gen for Microsoft to lose, with people becoming effectively digitally-locked into their ecosystems, similarly to an iPhone user who won't switch to Android because they've already purchased tons of digital content on iOS that can't be refunded.
Microsoft may find Xbox to be at least as profitable as Sony's PlayStation division.
Despite selling fewer hardware units, Microsoft may find Xbox to be at least as profitable as Sony's PlayStation division. New markets opened up by Xbox Game Pass for PC and Microsoft's support of Steam, and their mammoth investment in cloud gaming with Xbox Game Pass' Project xCloud feature could open up Xbox to emerging economies in a way console gaming simply hasn't been able to. Each Xbox Game Pass user on mobile is effectively an Xbox console user anyway, since the server blades are based on the same tech.
For hardcore gamers, a question of quality still hangs over Xbox Game Studios. Just as it's undeniable that Xbox Game Pass has the value, it's equally as undeniable that Sony is the king of AAA exclusives, with God of War, Spider-man, The Last of Us 2, and many others consistently delivering blockbuster Metacritic scores and adulation from fans. Microsoft is investing heavily in games, but the results have yet to bear much fruit. Some early signs have been positive, with Grounded from Obsidian capturing a considerable amount of attention on streaming platforms despite being in an early access format. Other signs have been less positive, though, with Halo Infinite delayed into 2021 after being widely mocked for its cartoony graphics. Hardcore gamers are just that, though, hardcore, and ultimately a smaller slice of the market than we'd often like to admit.
Nobody can predict the future with complete certainty, but Xbox has the pieces in play to thrive in Gen-9 with the Xbox Series S, Series X, and Xbox Game Pass. And millions will be grateful that it was Microsoft who offered the lowest point of entry to next-gen gaming.
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