DF Direct Weekly

In this week’s DF Direct Weekly, the Digital Foundry Team shares their thoughts on the Xbox business update podcast and attempts to fathom strategy from the PlayStation team in the wake of some ominous announcements that resulted in a 10 percentage point dip in Sony’s share price. The bottom line looks stark and very straightforward: the audience for PlayStation and Xbox consoles is not increasing gen-on-gen, while the costs of making games to service that audience is increasing dramatically. Something has to change.

Xbox Business Update

Let’s deal with the Xbox business update first. My take on this is that Phil Spencer and his team really want to take a multi-platform strategy forward, and it’s the obvious, logical solution to addressing the problem of the limit in total addressable audience. Not only that, with its ownership of Minecraft and now Activision-Blizzard-King, it’s already one of the largest multi-platform publishers in the market. I can well imagine that the likes of Satya Nadella can’t quite fathom why Microsoft is limiting its audience in the name of a legacy console model that seemingly isn’t working for Xbox any more.

Pitfalls of Multi-Platform Strategy

However, the pitfalls are obvious. Why buy an Xbox console if you can buy a PlayStation and get access to the next games from both platform holders? This concept of exclusivity as ‘specialness’ clearly resounds with the console audience, and I would imagine that the Xbox team spent a great deal of time honing its message for the business update because if the rumours were left unchecked, we could have been looking at another PR disaster on the level of the Xbox One debacle from 2013. On a more practical level, Microsoft does need to continue to make its consoles attractive, even in the wake of its ‘every screen is an Xbox’ messaging. A mechanism to make console sales attractive is required because – in the face of a less than stellar response from Game Pass PC – a home platform is required on which to focus its drive for subscriptions.

Support for Multi-Platform

The answer, for now at least? Tentative support for existing, lower profile games to shift over to Nintendo and Sony platforms. Spencer wouldn’t name the games, but at this point everyone seems to be aware that we’re talking about Hi-Fi Rush, Sea of Thieves, Pentiment and Grounded. Realistically, it has to happen for Microsoft to escape its current, limited addressable market. Making the likes of Indiana Jones a timed exclusive on Xbox and PC, then PlayStation support a year later is an obvious idea – but perhaps one that the Xbox team feels is too early to float right now.

Sony Financials Reaction

The Sony financial reports are similarly challenging in terms of the cap on the audience size, but there are further revelations. The biggest headlines refer to the lack of franchise sequels until at least March 2025 and the idea that PlayStation 5 sales have peaked and will decline going forward. We are in the latter stage of its lifecycle, we are told. The solution appears to be a much more aggressive multi-platform strategy, of course! Xbox is highly unlikely to be a part of the picture, but a more focused commitment to PC seems to be the route forward – with the Helldivers 2 success only serving to underline how a day and date multi-platform release can drastically alter the scale of success of a particularly hot game.