Over the past decade, the video game industry has become increasingly important in the entertainment industry. After having exceeded cinema and music business volumes, this year its total value was estimated at 160 billion dollars, 9 percent more than last year. Waiting for the definitive data regarding 2020 – which due to restrictions spread all over the world could mark an even more sustained growth, similar to that experienced by streaming services – in these days two leading companies in the sector such as Sony and Microsoft are presenting the new models of their main game consoles, the PlayStation 5 and the Xbox Series X.
About three quarters of the video game industry is supported by products for PCs and mobile devices. Despite this, the market share made up of consoles is extremely profitable, and for twenty years Sony and Microsoft have continued to contend with subsequent versions of their consoles. The Japanese company launched the first PlayStation in the mid-nineties, coming in a short time to dominate the market after overtaking the SEGA and Nintendo products (the latter continues to produce game consoles, but of another genre). Microsoft's first Xbox came in 2001, when Sony introduced the PlayStation 2, which with 155 million units sold – a record still undefeated – far exceeded the 24 million Xboxes sold in the same period.
Since then, Sony and Microsoft have been competing in the console market and about every seven years present their products, rivals. The third generation of PlayStation, in 2006, was joined in global sales by the Xbox 360 – the most successful console produced by Microsoft so far – but Sony has always controlled a slightly larger share of the market. The latest generations of Xbox and Playstation came out in November 2013, and since then Sony seems to have definitely taken over, so much so that the Japanese company's video games division now alone generates 27 percent of all revenue for the group. After having stopped producing mid- and low-end PCs and televisions, video games are its main segment, followed by the remaining electronics products and optical sensors produced for external companies. For Microsoft, on the other hand, video games remain a secondary division to the IT division.
The most recent market analyzes claim that Sony will sell 5 million PlayStation 5s in the last two months of 2020 alone, while Xbox should not exceed 4 million units. A factor considered decisive for the sales of the two consoles in the first months of trading are the video games that will accompany their launch. In addition to the enhanced technical characteristics and improved usability in every form, the exclusivity of some titles is in fact considered one of the reasons that pushes fans to switch to the new models. Xbox, however, will not have any exclusive title, while the PlayStation 5 will be presented with eight video games that cannot be used on the Xbox competitor: among these are the awaited new Marvel's Spider-Man, whose previous version was among the most popular of the recent years, the dark fantasy Demon's Souls and Gran Turismo 7, a classic.
Furthermore, this year, the sales of Xbox and Playstation could greatly affect the coronavirus pandemic, which around the world is forcing millions of people to stay at home more than normal, among other things favoring the use of video games. The question analysts are asking, however, is not so much whether and how much sales of consoles and video games will grow, but how long the effects of the pandemic will be felt on the market. One of the concerns that circulate is in fact that when things start to get better, the time of use of video games and the earnings they generate will begin to decline. Pfizer's announcement of the efficacy of its coronavirus vaccine, for example, has immediately resulted in a huge drop in the prices of the companies that have made the most of the effects of the pandemic: including many companies that develop video games.
On this issue, the New York Times interviewed industry experts and professional gamers, according to whom fears of a possible decline in sales when the pandemic is over are unfounded. According to the New York Times, the prevailing idea is that video games have the ability to engage users more than other forms of entertainment, favoring the creation of communities of players that will probably remain intact even when it is possible to return to attend cinemas and concerts. Twitch, the leading platform for sharing games with video games, had its best year in 2020, rising from an average of 17.5 million daily users to around 27 million.
And then, says the New York Times, it must be considered that the launch of the new Xbox and Playstation is usually a turning point for the whole market, because it produces revenues and generates huge investments throughout the sector, for many years. And that, in turn, could contribute to a richer offering and an industry's greater ability to retain its users.
Both Sony and Microsoft, for example, will sell their consoles at a price that won't allow. to generate large revenues, and will instead focus a lot on the earnings that can be made with services accessible through the console, from the sale of video games to other subscription services. According to data dating back to last May, Sony's video game subscription service – PlayStation Now – had more than two million subscribers and its online gaming service – PlayStation Plus – had 41.5 million subscribers. Similar services from Microsoft, Xbox Live and Xbox Game Pass, have 90 million and 15 million subscribers respectively, according to the latest figures.
