The Cost of a Subscription-Based Future: Sony's PS Plus Price Hike

The recent announcement of a price hike for Sony's PS Plus service has brought back memories of the company's past arrogance, particularly during the launch of the PS3. However, this move also serves as a reminder that the current state of subscription pricing is more of a land grab than a sustainable business model. In the past, Sony has made efforts to regain its footing in the market, particularly after being outrun by Microsoft in the previous console generation. The company has since focused on its game pipeline and avoided making any major missteps, such as the PS4 sidestepping the DRM controversy that affected the Xbox One. The PS5 also surprised many by adopting an industry-standard M.2 SSD for storage expansion, a departure from Sony's history of proprietary storage formats. However, recent events have shown that Sony may be reverting to its old ways. The company's decision to use a proprietary audio standard for the PlayStation Portal, rather than the widely adopted Bluetooth standard, has raised eyebrows. This move has drawn comparisons to Apple, which has successfully built upon the Bluetooth standard for its AirPods. The price hike for PS Plus, which will see the base tier increase to $80 and the premium tier to $160, has also been met with criticism. The lack of justification for the price increase, particularly in terms of improved services or offerings, has only added to the frustration. This move is in stark contrast to Microsoft's recent price increase for Game Pass, which, although unwelcome, was at least in line with inflation and accompanied by a well-loved service with a extensive library and regular updates. Sony's situation is different, with its price increase far outpacing inflation and applied to a service that is only a year old. The service itself is also relatively threadbare, with its lowest tier offering little more than basic console services and its higher-end tiers providing a patchy software library. The retro game offering is particularly poor, feeling more like a bargain bin than a curated library of classic games. The price hike may cause a significant number of subscribers to drop down to lower tiers, and it is unlikely that many will come to the defense of a service that is not particularly well-liked to begin with. While it is tempting to see this move as simply greedy, there may be more at play, with Sony attempting to make up for the unsustainable nature of its subscription model. The issue is not unique to Sony, as both Game Pass and PS Plus are attempting to establish a foothold in the market through loss leaders or break-even models. However, this approach is not commercially viable in the long term, and the current model is being propped up by subsidies from platform holders. Once the market is established, platform holders will likely attempt to squeeze both ends of the pipeline, leading to a sharp rise in subscription prices that consumers will have little power to resist. This is a common issue with subscription models, not just in the gaming industry, but also in music, video, and books. The subscription provider initially subsidizes the model, only to later turn the screws on media creators and consumers alike. The end result is a sharp rise in prices, with consumers trapped in a single ecosystem. The video game industry is not yet at the same level as other industries, but as it becomes increasingly reliant on subscription revenue, it is unclear where the exit strategy lies. Sony's price hike may be a confidence move, reflecting the company's strong market position, but it will likely be met with resistance from consumers. Ultimately, the consumer response will be crucial in determining the future of subscription services. If consumers are not willing to pay higher prices for these services, it will raise serious questions about the sustainability of the current business model and the direction of the industry as a whole.