PlayStation 5
The other day, I wrote about Microsoft’s long game. The company’s relationship to traditional consoles shifted dramatically over the course of the last generation, but its work on Game Pass makes it uniquely well-positioned to take advantage of some of the biggest trends in the industry: things like streaming, cross-play and the increasing move towards a platform-agnostic gaming landscape. But here in 2020, platforms are very much still a thing, and both Microsoft and Sony are getting ready to launch new consoles at the end of the year: the Xbox Series X and the PlayStation 5. And so I wanted to look at the other side of the equation, and there Sony gains a very important advantage over the Xbox Series X.
We still don’t have official confirmation about Sony’s plans for backwards compatability with the PS5, but it’s widely assumed that the new console will at least be compatible with PS4 games—anything less would mean big trouble. But if we, for a second, assume that both the PS5 and Xbox Series X are fully compatible with the PS4 and Xbox One, that hands a major advantage to Sony.
The reason here is simple: you’d be able to keep your games while upgrading, but only if you stuck with the same platform. That means a fully backwards compatible generation would dramatically discourage current console owners switching camps: if the machines are similar enough, you might as well go with the one where you already own games.
This, naturally, hands a huge benefit to Sony. The PS4 beat the Xbox One hands down this generation: Xbox One stumbled out of the gate and never really recovered, even as Sony continued to pump out top-tier exclusives that bolstered its brand and pushed sales for years. Many of Microsoft’s big moves—Game Pass, backwards compatability, cross-play and studio acquisition—were more geared towards this upcoming generation/era of gaming than the current one.
In many ways, Game Pass is Microsoft’s answer to this problem. Does it matter, Game Pass seems to ask, if you already own all those PS4 games, when you can have access to over 100 Xbox games? It’s a fair argument, but people get attached to their libraries, and sunk costs are a thing. Sony’s extant advantage still wins out.
If everything happens the way we expect it to, that should mean that Sony would be able to maintain the advantage of its install base even through the console transition. Every other console transition has been an opportunity to start fresh for developers, manufacturers and consumers. That won’t really be the case this time around, and Sony stands to benefit.
