PlayStation Dominates Xbox and Will for Years to Come


This week marks the beginning of another console war between gaming giants Sony Corp. and Microsoft Corp. On Tuesday, Microsoft released its new Xboxes, while Sony will debut its new PlayStation 5 on Thursday. It won’t be much of a war this time: PlayStation, the reigning market leader, is widely seen as having the advantage.   

Gamers typically buy new consoles to try out the latest new titles and updated versions of favorites. So, it’s bad enough for Microsoft that PlayStation has such a lopsided advantage in this regard going into the holiday season. Sony is launching its latest machine with a compelling lineup of showcase games that demonstrate the improved technical capabilities of its hardware; Microsoft has no exclusive games prepared for its premiere. 

But that’s not the worst of it. Next year doesn’t look any better.

As incredible it may seem that Microsoft had no new games ready for its first console launch in seven years, it now looks like the disparity for 2021 will be just as bad. On Monday, Sony revealed more details about the timing of its lineup for next year; there’s only one way to describe it and that’s stacked. In a marketing video, the Japanese company said the eagerly-anticipated racing game Gran Turismo 7 is now slated for the first half of next year as is Ratchet & Clank: Rift Apart, with Horizon: Forbidden West coming in the second half. Microsoft, by comparison, only has Halo Infinite scheduled for 2021 in the big exclusive title category. 

PlayStation Dominates Xbox and Will for Years to Come
This difference is all in the approach. Sony has successfully developed several world-class game studios by starting small and carefully building them in a methodical way. Often, the company works with developers for long periods of time, in some cases years, before they are brought in-house. Sony then provides them with whatever resources and timelines they need to make the highest-quality games. In an interview with last month, Sony executive Jim Ryan explained the company’s more deliberative process. “Very quietly, in a very PlayStation way, we've been building something quite special with these studios,” he said. The results speak for themselves. Several of Sony’s gaming studios – including Naughty Dog, Guerrilla Games and Sucker Punch – have consistently achieved greater critical and commercial acclaim with each successive game release.
PlayStation Dominates Xbox and Will for Years to Come

It’s a different story at Microsoft, which is better known for flashy gaming acquisitions that often haven’t worked out as planned and in some instances resulted in studios eventually closing amid turmoil. The most recent example is what happened with the aforementioned Halo Infinite, which was originally slated to be the flagship title for this week’s Xbox launch. After a mixed reception to the game’s initial marketing video, the game was delayed in August to next year. And the troubles continue. Last month, Bloomberg News’s Jason Schreier reported that Halo Infinite’s lead Chris Lee has left the project, making him the second game director to depart in the last two years and raising the prospect of more delays.

Microsoft will gain some firepower with its planned $7.5 billion acquisition of ZeniMax Media, the owner of games maker Bethesda Softworks. Here again, though, the strategy has problems. The purchase, announced in September, will include three big game franchises — Fallout, Starfield and Elder Scrolls — that could potentially move the needle for Microsoft. But the next games for each of these franchises are nowhere close to being released. Starfield is likely years away, with the next Elder Scrolls years after that. That’s a problem because it means Microsoft will likely run out of runway to make Bethesda’s games a difference maker this console cycle, assuming a typical six-to-seven year length. It’s too little, too late. And the longer development cycles also increases the likelihood the studio may languish under new management. 

At best, then, Microsoft may not be able to match Sony’s software prowess for several years. This means Xbox will fall so far behind PlayStation, it may have trouble ever catching up. The Chinese military strategist Sun Tzu once said, “Every battle is won before it’s ever fought.” In this case, Sony looks like it’s proving him right: The better-prepared side with the superior plan is destined to win the confrontation.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tae Kim is a Bloomberg Opinion columnist covering technology. He previously covered technology for Barron's, following an earlier career as an equity analyst.

©2020 Bloomberg L.P.

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