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Sony Lays out Playstation Now Service Strategy to Maintain Cloud Gaming Leadership

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Sony Lays out Playstation Now Service Strategy to Maintain Cloud Gaming Leadership Publication date: 01 Oct 2019 Author: Omdia Analyst Sony Lays Out PlayStation Now Service Strategy to Maintain Cloud Gaming Leadership Brought to you by Informa Tech Sony Lays Out PlayStation Now Service Strategy 1 to Maintain Cloud Gaming Leadership Sony is the biggest cloud gaming operator in the market today. In 2018, the company had 36% share of the overall market and generated $140m in consumer spending. The entire cloud gaming market was worth $387m in 2018 and is forecast to growth to $630 million in 2019 as new services launch and existing services become more relevant to a broader set of consumers. IHS Markit forecasts the cloud gaming market to be worth $2.5 billion by 2023, less than 2% of the overall games market at this time. To maintain its leading position Sony is focusing its PlayStation Now strategy: slashing its price, improving its content and spending a significant sum on marketing to boost adoption. Having operated PS Now since 2014, Sony believes it is the right time to enter a more expansive phase for its subscription service. The upcoming launch of Google Stadia and Microsoft’s own Project xCloud strategy has resulted in a more aggressive approach, but this is also a good time to lay the foundation for future growth as the company starts the transition to its next-generation console platform. While Sony Interactive Entertainment recognises PS Now as an important pillar of its future growth and its aim to expand its audience, it expects this service to remain a secondary concern behind its core console business. Microsoft is following a similar approach. Importantly, console platforms are well positioned during this phase of slow cloud transition as they are able to offer all forms of distribution, a flexible strategy which will fit with a cross section of users. Hinging off this console strategy, cloud gaming services will enable platform holders to start to engage new audiences to expand their reach. This will be a slow transition. PS Now monthly pricing falls into line with other entertainment subscription services – At $9.99/€9.99/£8.99 for the month to month subscription rate the service is much more competitive and will be one of the cheapest cloud gaming services available with such a deep catalogue of content. The addition of heavy hitting titles such as GTA V, God of War, Uncharted 4 and Infamous Second Son for 3 months, with the promise to rotate in other popular titles after this period, will drive more trials of the service and the subscription base. Enhanced ad-spend and marketing will help expose a broader audience to the PS Now proposition. While, PS Now cannot compete with the first-party day and date releases Microsoft bundles into Xbox Game Pass, PS Now’s offer of streaming, and a bigger catalogue of games, at a similar price point makes Sony’s service a lot more competitive. PS Now has enjoyed over 40% growth year-on-year in terms of subscriber numbers since it first launched. The support of downloads and launch in new territories has helped boost this performance. This new pricing, content and marketing spend will increase this subscriber growth yet further and will ensure the service maintains its cloud gaming market leadership in 2019 and into 2020. © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited. Sony Lays Out PlayStation Now Service Strategy 2 to Maintain Cloud Gaming Leadership Citation policy Request external citation and usage of Omdia research and data via [email protected]. Omdia consulting We hope that this analysis will help you make informed and imaginative business decisions. If you have further requirements, Omdia’s consulting team may be able to help you. For more information about Omdia’s consulting capabilities, please contact us directly at [email protected]. Copyright notice and disclaimer The Omdia research, data and information referenced herein (the “Omdia Materials”) are the copyrighted property of Informa Tech and its subsidiaries or affiliates (together “Informa Tech”) and represent data, research, opinions or viewpoints published by Informa Tech, and are not representations of fact. The Omdia Materials reflect information and opinions from the original publication date and not from the date of this document. The information and opinions expressed in the Omdia Materials are subject to change without notice and Informa Tech does not have any duty or responsibility to update the Omdia Materials or this publication as a result. Omdia Materials are delivered on an “as-is” and “as-available” basis. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in Omdia Materials. To the maximum extent permitted by law, Informa Tech and its affiliates, officers, directors, employees and agents, disclaim any liability (including, without limitation, any liability arising from fault or negligence) as to the accuracy or completeness or use of the Omdia Materials. Informa Tech will not, under any circumstance whatsoever, be liable for any trading, investment, commercial or other decisions based on or made in reliance of the Omdia Materials. CONTACT US omdia.com [email protected] © 2020 Omdia. All rights reserved. Unauthorized reproduction prohibited..
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