Streaming Could Help Xbox Take the Lead from PlayStation

Streaming Might Be the Key to Xbox’s Future Success

Microsoft is definitely gearing for an Xbox comeback, and industry analysts believe the key to their success lies in game streaming, a market that they appear to be better positioned to succeed in than Sony. Although Sony is succeeding right now by focusing the majority of their efforts on a handful of huge games, this probably isn’t a sustainable strategy.

xbox game pass

“With an install base of 75 million that makes sense for now,” said Joost van Dreunen, CEO and co-founder of SuperData Research. “But it does not provide an answer to the question what the future holds. Worse, it is inconsistent with the direction senior management recently revealed—plans to focus on subscription revenue from online gaming and streaming music and video.”

On the other hand, Microsoft revealed plenty of new games at their E3 2018 conference, and also focused on the Xbox Game Pass, suggesting that streaming is the next step.

“In particular, this last part is promising,” van Dreunen said. “Although Microsoft has failed to win the centre of the living room as it originally set out to do, it is setting itself up to become the leader in the digital games market by equally amassing content and focusing on distribution rollout. It is possible that a few years from now Microsoft will be the Netflix of gaming and Sony more like HBO.”

“But a digital future is about scale and infrastructure, which means that Microsoft may yet claim the centre,” he added.

“Microsoft clearly has breathing room to look to make a bigger bet on its game business,” said DFC Intelligence CEO David Cole. “With the amount of financial resources Microsoft has at its disposal there is really only upside. Microsoft investors in general are not well versed in the video game business. Microsoft stock does not currently trade based on the performance of the Xbox One. However, if investors start hearing that Microsoft could become the Netflix of gaming, that could resonate in a major way.”

“The issue with a Netflix of gaming concept is that, for the near future, it is likely to require a fairly powerful hardware system to provide a full gaming experience,” he continued. “Microsoft needs a new console system if it wants to remain competitive. Based on E3 2018 we now think that is likely to be coming.”