While the video game industry has been part of the global entertainment scene for more than a century, its scale has turned into a Titan without question. Today, gaming is bigger than the global film and music industry combined and last year it had a market value of more than $ 160 billion. Now around 2.5 billion gamers worldwide play on a plethora of devices, from PCs dedicated to games all the way to the smallest smartphones.
The largest share of this global market is held by video game consoles at around 30%, followed by PCs at 24%. With this large portion of the pan, it’s no surprise that game viewers are keeping a close eye on developments that will affect those two channels. For consoles, for the last two decades, it’s certainly been a three-horse race between Sony’s entertainment powerhouse and their line of PlayStations followed by Microsoft’s Xbox and then Nintendo’s Titan.
The intense competition between these manufacturers has long been dubbed the ‘Console Wars’ and we have just ended a new battle with the ninth generation of video game consoles as PlayStation Sony’s 5 and Microsoft’s Xbox Series X are about to go head-to-head. during the important holiday season. The launch of new tokens is usually very exciting for game viewers as well as video game fans. The last time these two giants launched the previous generation of consoles was in 2013. Overall, the launch of a new generation of tokens leads to an average growth of 19% in hardware sales, as well as large spikes in margin and software sales. So considering the overall slowdown in this pandemic world, game viewers are on the edge of any consumer, especially in the important holiday shopping season.
While Sony took control of the final round with a two-to-one market share over Microsoft, much is being said about how the IT industry’s juggernaut is shifting to a strategy that just couldn’t give him a vision to be level one in this generation of consoles. (something that Microsoft only once succeeded with the Xbox360 in 2005), but also completely redefines how the gaming console industry has fared throughout the industry. Here are four reasons why Microsoft ‘s strategy and one environmental factor may be putting extra wind in their sails.
1) The stars are aligned: Covid-19 has made home entertainment a more important lifestyle choice at the expense of travel, eating out and others. This has led to streaming services, TV and video games seeing an unexpected spurt of growth. Nintendo was one of the first to report a spike in sales for their Switch console (it grew by a staggering 24% despite being over three years old and caused a stir. caused a shortage across the US). Microsoft reported a 130% increase in online game sessions and the Twitch video playback platform announced a monthly average of 1.4 billion hours of videogames played off their library. While the video game industry was expected to grow at an average growth rate of 2.24% per year until 2024, following the announcement of the pandemic, sales of video games, both online and offline, are up 35%. While Microsoft has been gradually building what many have been a paradigm shift positioning strategy for several long years before the pandemic struck, the impact of Covid-19 will certainly help to bringing more momentum in 2020 and beyond.
2 Making the Cloud a Media: At the heart of Microsoft’s strategy is the cloud. The company has been trying to build more muscle in an online game with their successful online game service Pass Pass. By itself, Game Pass allowed previous generations of Xbox users to access a library of nearly 100 games to download on consoles. In October, however, Microsoft announced that they were teaming up the Game Pass subscription with their xCloud platform, a move that eliminates the need to download games to hardware and allowing gamers to stream new games to all generations of Xbox hardware in real time as well. for PCs and smartphones. This will gradually increase access to Xbox games to new audiences and actually create what is known as ‘The Netflix of Games’.
3 Subtracting the price: High prices of hardware and software are the main pain points for consumers. Now Microsoft has worked on making Xbox pricing relevant to consumers in more ways than one. First, they offer a lower price point for their latest hardware starting at just $ 299 (the full spec version is $ 499), which is significantly cheaper than Sony ‘s entry – level offer. They have also offered to lock players in some markets in a two-year commitment to their online gaming platform and the ability to purchase the hardware at greatly discounted prices. And if they don’t want the hardware and prefer to get to Game Pass, they can do so on multiple devices, even without buying the Xbox. While Sony and Nintendo have a number of online game libraries and Amazon and Google are still updating their cloud-based game systems, the experience of streaming online games through Azure-based platforms like xCloud, has surrounded by the number of titles available on Game Pass, it’s an unstoppable value.
4 Making content at the heart of the ecosystem: While creating value through price movement, Microsoft has not forgotten the old axiom that it is exclusive games (content) that help sell the hardware (and cloudware). The company has announced that Electronic Arts (EA), one of the biggest names in game development, will be releasing their complete catalog of their games online for free with the new monthly plan on Game Pass Unlimited service, thus adding another 100+ titles to an already impressive service. catalog. The company bought Bethesda (a major game studio behind titles like Doom and Fallout) for $ 7.5 billion. This was the second major studio purchase for Microsoft after Mahjong (the makers of Minecraft) for $ 2.5 billion. While both studios continue to offer games to millions of fans on Sony and Nintendo, you can get their new releases earlier on Game Pass and Xbox.
5 Taking the Congress out of the Consular War: Perhaps Microsoft’s most seismic strategy move is the news that all new Xbox games will be available not only on the latest generation X Series, but on all larger generation consoles. older, PCs and mobile phones as well. For the best experience and to take advantage of all the features such as lower load times, improved graphics and seamless switching between games or devices, gamers need to buy the latest generation hardware; however, if they choose not to, they can still play on older generation Xboxes and even mobile devices. The company is also moving away from the generation token battle that has long set the stage of the video game industry and aims to provide users with a membership model as a point of entry into their ecosystem. and at the same time being a platform agnostic. In other words, what matters now is that you play Microsoft games and whether you do this on a PC, console or high school phone. That’s above all a game changer for consumers and if other competitors like Sony and Nintendo as well as Amazon and Google are following suit, this token war is probably the last one and the one that really matters.
Tariq Ziad Khan is a US based marketer and a member of Aurora’s editorial team. [email protected].