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Microsoft says Sony's game "exclusivity" hinders the development of XGP, and the subscription system has not yet enhanced the two businesses

  • linda
  • 2022-08-15 17:21:55
  • 615 read
  Reporter Cai Shuyue intern Qiu Shuang reports from Shanghai  A new chapter in the battle between the two ga...

Microsoft says Sony's game "exclusivity" hinders the development of XGP, and the subscription system has not yet enhanced the two businesses

  Reporter Cai Shuyue intern Qiu Shuang reports from Shanghai

  A new chapter in the battle between the two gaming giants, Microsoft and Sony.

  It is reported that on August 9, Microsoft submitted a document to the Brazilian Administrative Council for Economic Protection (CADE), and Microsoft believes that their ability to expand the subscription service Game Pass has been "obstructed" by Sony-Sony is in order to grasp the game content. "Blocking rights", which guarantee content exclusivity and pay some third-party manufacturers to prevent them from providing content to Game Pass and other subscription-based services that may compete with Sony.

  On the other hand, what is concerning is that although both Microsoft and Sony have begun to make a big fuss about the subscription system of their host platforms since March this year, judging from the revenue feedback in the latest quarterly reports of the two parties, their effectiveness is not the same. Not obvious.

  Why "exclusive"?

  The phenomenon pointed out by Microsoft in the above-mentioned document is not the first time that it has appeared. In fact, content exclusivity has always been Sony's key business strategy in the PlayStation series of platforms.

  Since the PS4 era, Sony has not been happy to see manufacturers put their games on the PlayStation platform, and then continue to list competing game platforms such as Xbox and Epic Games. In addition to paying additional "exclusivity fees" to retain third-party manufacturers, Sony also in August 2019 formulated a cross-platform game revenue sharing rule for manufacturers who refused to list on Sony's platform alone - if the manufacturer listed all the games on other platforms Earning more than a certain percentage of revenue requires paying Sony an additional “Revenue share.”

  Epic Games CEO Tim Sweeney has pointed out that Sony is the only platform operator to demand "compensation" for cross-platform play. "In some cases, Epic will have to pay Sony additional revenue," he said, citing a "compensation mechanism" that could be triggered if someone plays the game primarily on the PlayStation but pays on the iPhone. . He also revealed that Epic would have to agree to pay Sony these additional fees for Fortnite to continue to operate across platforms.

  However, a game industry analyst told the 21st Century Business Herald reporter that Sony's use of exclusive means to prevent the flow of platform content to competitors is not "unreasonable", but more like a defensive measure. "In fact, the other two platforms (Microsoft and Nintendo) of the 'Yu Sanjia' platform have also adopted an exclusive strategy for important products on the platform. The differentiation and competitiveness of the content on the platform are essentially based on different exclusive game zones. come."

  On the other hand, he believes that Sony is worried that the game will be launched on multiple platforms and will share its own revenue, so it will ask the manufacturer to "compensate" for the corresponding revenue, "This also reflects PlayStation as a platform, it can also be said to be a Channels, feel that their attractiveness to manufacturers is not as good as before, resulting in a sense of crisis." The analyst said.

  In addition to slamming Sony's exclusivity strategy, Microsoft further stated in this document that Microsoft has never attempted to monopolize the "Call of Duty" series of IP. This statement may be in response to Sony's comments when questioned during a previous CADE review of Microsoft's acquisition of Activision Blizzard.

  In response to the acquisition of Microsoft and Activision Blizzard, Sony once said in its reply to CADE that apart from Activision, there is currently no other developer that can create a game IP that competes with "Call of Duty", and it joins Microsoft's game IP In the library, it will make other manufacturers unable to compete with it.

  Game revenue both fell

  Or driven by a sense of crisis, before continuing to retain third-party manufacturers through additional payments, Sony has also begun to vigorously increase its subscription-based PlayStation Plus (hereinafter referred to as "PS Plus") since March this year, and began in May. online.

  Microsoft, which has attached great importance to the subscription system, also responded quickly and continues to increase its code. In addition to adding a trial function to Xbox Game Pass (hereinafter referred to as "XGP") in June this year, and adding first-party or third-party games such as "Starry Sky" and "Eternal Calamity" to the XGP game library in the new game conference , and recently added a family membership program.

  On August 5, Microsoft officially announced the launch of a game membership sharing program called "Xbox Game Pass Ultimate" in some regions. Similar to the NSO Family Plan, a subscription-based service for Nintendo’s console Switch, this plan supports up to 5 users to share an XGP subscription plan.

  Although both parties are vigorously promoting the subscription system, in the recent financial reports disclosed by the two major game giants Microsoft and Sony, the revenue of the game business has declined to a certain extent.

  On July 26, Microsoft announced its full-year 2022 financial results and its fourth-quarter financial results ended June 30. Earnings data show that Microsoft's gaming business revenue fell 7% (down 5% in constant currency). Three days later, Sony released its first-quarter financial report from April to June 2022. Among them, the sales of Sony’s game and network services business in the quarter were 604.1 billion yen, a year-on-year decrease of 2%, while operating profit was 528. 100 million yen, down 37% year-on-year.

  Regarding the decline in game business revenue, both parties also gave corresponding explanations. Coincidentally, in their respective financial reports this time, neither Microsoft nor Sony mentioned what specific contributions the game subscription system that the two parties had focused on had brought to game revenue, but the sales of first-party and third-party games declined. , are one of the reasons for the decline in its game revenue.

  Microsoft Chief Financial Officer Amy Hood noted in a conference call following the release of the fourth-quarter report that the decline in revenue from the gaming business was in line with the company's expectations. And it pointed to the decline in Xbox content and services revenue, mainly due to reduced user play time and insufficient monetization of first- and third-party content. As for the subscription system, Amy Hood only mentioned that some content and service revenue was offset by the growth of XGP subscriptions.

  Sony pointed out that the low sales of first-party and first-party games, including game add-on content (DLC), and the increase in game development costs of its studios are the two main factors for the decline in revenue.

  In response to the decline in game sales on the platforms mentioned by Microsoft and Sony, Ma Axin, an analyst at Analysys Interactive Entertainment Cultural Consumer Industry Center, analyzed to 21 reporters that under the influence of external factors such as chips and the epidemic, Microsoft and Sony's mainframe shipments volume will be directly affected. The reduction in hardware production will inevitably affect software sales.

  On the other hand, he believes that the current pace of product output of large-scale console games has further slowed down, which has also caused a lack of fresh blood in the two subscription game libraries. "The performance of the recent console game 'explosion' except "Ayrden's Circle", the performance of other works is relatively flat. However, we can still hope for the Christmas season this year, and then we can pay attention to whether the two games will be launched. Multi-head IP," he said.

TAG: Microsoft

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