22nd February 2024 4:45 pm
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Why PlayStation Plus is bleeding subscribers

  • Sony’s PlayStation Plus subscription services is losing subscribers despite efforts at revamping earlier in the year.
  • The company is pointing to an overall drop in gameplay time across its consoles, especially the PS4.
  • PlayStation Plus is struggling to compete with the Game Pass service offered by rival Xbox, probably due to its being more expensive in an market that has less money to spend.

Subscribers to Sony’s PlayStation Plus (PS Plus) service have fallen despite recent efforts by the Japanese entertainment monolith to make the service more competitive in the current market.

The unfettered success of streaming platforms like Netflix has caused an industry-wide shift towards subscription models, and gaming has followed suit. Sony’s own gaming subscription service PS Plus was launched in 2010 before the subscription craze really took hold.

Yet it has found success since then, with nearly 50 million active subscriptions. However, Sony’s recently released financial report [PDF] for the quarter has noted a worrying 4 percent drop in subscriptions from the previous quarter.

Subscriptions to the service fell from 47.3 million recorded at the end of June 2022 to 45.5 million in the three months leading to 30th September 2022. According to Sony, this drop of just under two million subs was caused by a greater decline in user engagement among PlayStation 4 (PS4) users than it expected.

In fact, people are spending less time playing games on PlayStation (PS) consoles overall. Sony points out that gameplay across its consoles has decreased year-one-year by 10 percent primarily due to the lessening impact of COVID-19 restrictions worldwide.

More people are able to do things outside now, says Sony. Indeed, COVID-19 and subsequent lockdowns across civilisation saw gaming reach an all-time zenith according to global audience data analysis leader Nielsen.

As people had no choice to shelter from the pandemic, 82 percent of global consumers played video games and watched video game content according to Nielsen’s research. While there isn’t a translation of that percentage to actual individuals, we can venture to say it is in the billions of people.

Now, with less lockdowns, people are spending less time indoors with controllers in-hand. Another aspect that could be costing Sony subscribers is the global market downturn affecting “luxury technologies”, including video games.

As consumers across the market have less extra income due to hightened inflation and concerns about energy shortages and exploding fuel prices in regions such as Europe, less money is being spent on entertainment. South Korean tech giant LG reported a $700 million loss to its home entertainment business of TVs and speakers attributed to this consumer pullback.

The drop in PS Plus subscribers is worrying for Sony because it recently revamped its subscription model to make it more competitive in the market and yet it has not been able to attract more new users. The March 2022 update to PS Plus marked the first overall change it made to the service since its initial 2010 release.

With the update, Sony split the service into three tiers with different pricing. The first tier, called “Essential,” calls for a $9.99 per month price plan. It is the cheapest of the three but gives only the bare minimum of benefits, including only two “free” downloadable games per month and online multiplayer access on consoles.

PS Plus Extra, its second most-expensive tier beneath Premium, which goes for $14.99 per month allows players to access everything offered by the Essential tier as well as a catalogue of “400” of the most popular PlayStation games across the PS4 and PS5.

This is Sony’s “meat and potatoes” tier and was established to directly compete with the Xbox Game Pass which has been a breakout success for Microsoft, and makes up around 15 percent of the company’s total revenue.

Yet PS Plus Extra is more expensive in a market that has less money to spend. To compare, a PS Plus Extra subscription that allows users to pick and choose from 400 games and the above benefits is valued at around R272 in South Africa per month.

In contrast, the most expensive tier of Microsoft’s Game Pass – the “Ultimate” tier – which offers over 100 “free” games, exclusive discounts, cloud gaming, EA Play Membership, the Gold version of Xbox’ online multiplayer, among other benefits, goes for R119 per month.

Gaming is still Sony’s biggest piece of business according to its financials, larger than its music and movies businesses put together. Perhaps this loss in subscribers will push Sony to lower its prices especially if the trend continues, which would be welcome. A more competitive market only benefits consumers.

For us, The Elder Scrolls III: Morrowind is on Game Pass but not on PS Plus and thus there is clear winner here.

[Image – PlayStation]

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