Now that the dust has settled on Xbox’s and PlayStation’s big summer showcases, it’s a good time to compare them and look for evidence of where each company is heading — or thinks it’s heading.
As has increasingly been the case over the last few years, the two presentations were very different. Most observers feel that Xbox had the better show, in terms of the number and range of titles shown and the promise of its future slate. But there’s only so much you can read into this — the most plausible conclusion is simply that post-pandemic production issues are hitting Sony’s family of studios a year or so later than they hit Microsoft’s and Ubisoft’s, leaving it with a gap between this year’s Spider-Man 2 and far-off prospects like Bungie’s Marathon. Like its rival has this summer, Sony will probably be able to bounce back in a year’s time.
It’s more interesting to look at the substance of the games shown, and what those can tell us about the two platform holders’ priorities.
There’s no mistaking what Sony is up to. The PlayStation owner has been vocal about its desire to get into the business of live-service games in a big way, and how this motivated its acquisition of Destiny maker Bungie. Lo and behold, in terms of new reveals from first-party PlayStation studios, the showcase gave us:
- Fairgame$, a punky extraction shooter from recent acquisition Haven Studios
- Helldivers 2, a co-op sci-fi shooter
- Marathon, Bungie’s sci-fi extraction shooter
- Concord, a PvP multiplayer shooter from recent acquisition Firewalk Studios, which was founded by Bungie and Destiny veterans
Little is known about these games, but Marathon has explicitly been set up to be a long-term “living” game, and it doesn’t seem like a stretch to put Fairgame$ and Concord in the same bucket. There’s a striking tonal and genre similarity between these projects, too. Sony seems keen to exploit Bungie’s heritage by leaning hard on genres and stylings that have been proven to draw a service game audience on PlayStation — specifically sci-fi shooters. (Even more specifically: sci-fi shooters that remind you of Destiny. Fairgame$ leans more toward Overwatch, but you get the idea.)
This is not to say that Sony is turning its back on its stock-in-trade of polished, cinematic, single-player action games: Spider-Man 2’s impressive demo gives the lie to that, and this is the company that owns Insomniac, Naughty Dog, Guerrilla, and Santa Monica Studio. But there’s a clear trend nevertheless.
By contrast, these were the new first-party games revealed at the Xbox showcase:
- South of Midnight, an occult narrative game set in the American South
- Microsoft Flight Simulator 2024, an extension of the celebrated sim with more game-like elements (plus a Dune-themed expansion for the original)
- A Monkey Island-themed expansion for pirate service game Sea of Thieves
- Clockwork Revolution, a time-travel steampunk role-playing game
Microsoft also offered updates on Fable, Avowed, Hellblade 2, and Starfield — all single-player games, mostly substantial RPGs, but stylistically very different from each other.
This shouldn’t be taken to mean that Microsoft doesn’t want to make multiplayer shooters — although it will probably take some time to lick its wounds over its dreadfully mismanaged failure to turn Halo into a hit service game with Halo Infinite, not to mention the botched launch of Arkane’s Redfall. But if Sony’s first-party efforts fall broadly into two buckets — games that look like Naughty Dog made them, and games that look like Bungie made them — Microsoft’s are clearly much harder to categorize. A couple of console generations ago, Sony’s first-party studios were the creative risk-takers with a diverse output, while Microsoft single-mindedly chased the Halo audience. Now, the tables appear to have turned.
What happened? It’s unlikely to be just a matter of taste; these are businesses, and they go where the money is. Is the money really to be found in such different places for the two of them?
The short answer is yes. PlayStation is a product business, and it’s the biggest revenue generator for its parent company, Sony. It needs each of its games to make money. In the current economy, and the risk-averse atmosphere in entertainment generally, that means making sure bets — whether they are mass-market action games with high production values that can ask for a $70 sticker price at scale, or service games aimed squarely at engaging PlayStation’s core audience (and monetized to suit).
Xbox is now a service business — specifically, a Game Pass business. A gaming subscription that extends beyond the console ecosystem to reach players on PCs and phones has been at the heart of the Xbox strategy for years now. But, paradoxically, the division’s main product being a service makes it easier for Microsoft to release smaller, self-contained games-as-products — and even to approach its own service games differently.
What the Game Pass business model requires is a reasonably high volume of new games; enough variety in the content to attract new users, especially users who don’t already own consoles; and above all, a high level of engagement with the games as a whole, which means happy customers. But because each game isn’t (only) considered as its own revenue-generating unit and is instead largely judged in terms of happy players, Xbox can be more relaxed about each game’s design, and doesn’t have to min-max those games’ marketing or business models to the same degree.
Sea of Thieves and Flight Simulator are much less aggressively monetized than other games in their relative spaces, and they can be updated in novel ways to suit, whether that’s via an in-game crossover event or an expansion-sequel hybrid that would be a much riskier bet without the comfortable umbrella of Game Pass grouping it all together. Forza Horizon 5 has seasons to keep players engaged, but it’s not required to implement a battle pass to stripmine those seasonal players for cash; for Microsoft, the hours played are enough. A huge, emergent, but insular sandbox like Starfield that can keep players entertained for hundreds of hours off a single download is, on paper, the opposite of a service game — yet within the Game Pass system, it kind of becomes one.
In an interview with Polygon this week, head of Xbox Phil Spencer laid all this out quite clearly. “The fact that I have a content subscription that’s at scale means I don’t need to think about every game monetizing every engagement,” Spencer said. “Because Xbox Game Pass’ success is enabling us to invest more in driving engagement than in driving the dollars. The dollars will come from people loving the games that they’re playing. So it does open up opportunities for us to not be as incremental on every piece of content in terms of how we charge.” As a guiding influence, he pointed to the company’s long experience with Minecraft, an evolving, living game that doesn’t nickel-and-dime its giant audience. (It’s “a space that we learn in a lot,” he said.)
The key, for Spencer, is flexibility: “For a creator, you can say, ‘What am I trying to do? And is there a business model on this platform that allows me to do that?’ And we want that answer to almost always be yes.” The logic applies just as well for narrative-focused adventures like South of Midnight. “When a game’s design doesn’t beg for a business model inside of the game, we can just say, ‘Go build your game.’ The Game Pass platform has a business model that these great narrative single-player games will be able to fit inside of.”
This all sounds quite lovely for both players and for developers. The question is whether it’s sustainable. At one point, Spencer waved away comparisons to the struggles of video streaming platforms like Netflix to make their profligate spending on content make sense, saying that players care less about the quantity of new games than about platforms “curating a great portfolio for them.” But later, Spencer said that he and Xbox Game Studios chief Matt Booty have set a target of four AAA releases per year, which, given Booty’s assertion that the development cycle on such games is up to six years apiece, makes for an intimidating schedule. You can see why Microsoft has acquired so many studios.
For now, there’s nothing to worry about, Spencer says; since Xbox represents just 10% of Microsoft’s revenue, it can afford to concentrate more on growth than on profitability — unlike PlayStation. And Spencer sees an opportunity in the “hundreds of millions” of PC owners who make up Game Pass’ potential audience beyond consoles. The extent to which this untapped audience really exists will determine whether Microsoft’s more relaxed approach to the business of making games is the future, or just a pleasant blip.