What Is Going on With the Game Industry?
By: Owen Smith
As technology continues to keep evolving, one of the branches of tech benefiting from that evolution is the gaming industry. Let’s look at how the “big three” (Microsoft, Sony, and Nintendo) are shaping up what the next era of video games looks like:
Microsoft:
Microsoft, creators of the Xbox, have been in a funky position recently. Microsoft is trying to change what many consider a gaming console.
Let’s say a new Mexican restaurant opens in a town near you. It’s the only Mexican restaurant in town. You can go to that restaurant to have food you can’t have anywhere else – this is how video game consoles have worked for the past 20 years. Each of the big three release games you can only have on their console – AKA console exclusives.
But let’s say instead of opening a new Mexican restaurant in town, that restaurant instead chooses to serve their food at other restaurants. At first, this doesn’t seem so smart. Why would you not just open your own restaurant to maximize profit? Well, it is more profitable to sell in more places, rather than just one place.
That is what Microsoft has pivoted to within the last year. They have started to put their biggest exclusives games on other platforms – like Sony’s PlayStation and the Nintendo Switch. Even Xbox’s mascot, Halo’s Master Chief, is having rumors of a multi-platform release.
You may ask: Why has Microsoft chosen to take the Xbox brand this way? The answer to that question starts in 2013 when the Xbox One was released. The biggest criticism of the new console was that it didn’t bring any compelling exclusives to the table. Because of that, many gamers moved to Sony’s PlayStation 4 – which they thought held more exciting games. Ever since then, many have built their digital libraries on these consoles, which caused a plumet in Xbox sales. Since many bought into the PlayStation 4 in 2013, they haven’t seen the reason to switch to Xbox because all their digital games are stuck to the PlayStation ecosystem.
Citing this in a 2023 podcast interview, president of Microsoft Gaming Phil Spencer called the Xbox One generation the “worst generation to lose […] everybody built their digital library of games,” Spencer said, admitting they lost the so-called “console war” to Sony and Nintendo.
Due to declining Xbox console sales, Microsoft has switched the “Xbox” to more of a software brand. In 2017, Microsoft introduced the gaming world to its new subscription: Xbox Game Pass. Games Pass was like a Netflix for gaming – you pay a low monthly fee to play hundreds of games. Game Pass was remarkably successful. Additionally, Microsoft launched Game Pass for PC, aimed at a subscription for players on PC. However, making deals with other publishers to put their games on Game Pass proved to be very costly, setting up Microsoft for their biggest push yet: acquisitions and industry-consolidation.
With Microsoft focusing more on software and content, they needed a surplus of content for their future with Game Pass. In 2021, Microsoft bought Bethesda, the creators of hits Fallout, DOOM, and Skyrim, for $7.5 billion. As soon as the deal was complete all of Bethesda’s catalog integrated into Game Pass.
If that wasn’t enough, in 2022, Microsoft announced they were acquiring Activision Blizzard, the creators of Call of Duty, for $70 billion. The deal was one of the biggest acquisitions in history. Due to Microsoft’s spending spree, there were numerous suspicions of monopoly. The Federal Trade Commission sued Microsoft over antitrust concerns. However, with reassurance that Microsoft would choose to bring their games multi-platform, the deal succeeded.
The Xbox brand and Microsoft have really shaken up what it means to be a video game company. They are now attempting to pivot to a software company (which has proven so far to be very successful) by swallowing up the biggest names in gaming.
Sony:
Although Sony has famously kept their formula the same (after all, all their consoles are in numerical order), they have even started to change with the times. The PlayStation 4 was famous for its narrative single-player games such as The Last of Us and God of War. However, Sony is starting to look where the money is: free-to-play live service games.
Ever since the explosion of Fortnite in late 2017, every game company has dipped their toes into this “free-to-play” genre of game. Even Sony, being famous for their focus on single player games, are pivoting themselves into multiplayer games that make a truckload of money.
After Microsoft acquired Activision Blizzard in 2022, this sent Sony in a frenzy to get as much content as possible before Microsoft swallowed it up. However, even though Sony has been more successful in gaming than Microsoft, Microsoft is still a trillion-dollar company that isn’t afraid to pull out its wallet. So, Sony acquired Halo and Destiny developer Bungie (funny enough they were previously owned by Microsoft). Even though competition was a reason for this, the biggest reason Sony bought Bungie is because of Bungie success with that “Fortnite” free-to-play genre.
With Sony expanding into free-to-play games, they have not been releasing as many single player games as they once did. With almost all their studios working on free-to-play games, many projects have been cancelled, leaving Sony’s PlayStation 5 feeling barren of games (which is the perfect opportunity for Microsoft to release games for it). At one point there was a report that Sony was planning to launch more than 12 live-service games before the end of 2025.
Most notable of their 12 live-service games was the failure of Sony’s Concord. Touted as the “future” of the PlayStation brand, the game was a multiplayer live-service hero game. However, due to an abundance of hero games, and a cost of $40 (when most live-service games were free), the game was an immense financial disaster. It’s reported that Sony spent almost half a billion on the development of the game. A week after release, Sony took the game offline and closed the development studio behind the game. Concord has since been called the biggest entertainment failure of all time.
In addition, Sony has felt competition with Xbox over Game Pass. They have since created their copy-cat subscription, PlayStation Plus.
Although the PlayStation brand has long been synonymous with single-player games, Sony is chasing the money through live-service games. We have yet to see how that bet shakes out, but it will be a drastic change.
Nintendo:
As Nintendo has done their own thing since the Wii, they have always released new consoles half-way through each generation. After the failure of the Wii U, Nintendo needed a quick plan to get the company back on track. That was the foundation for the revolutionary Nintendo Switch.
The Nintendo Switch was unlike anything anyone had ever seen before – a handheld and home console rolled into one. Following the launch of the console, the Nintendo Switch is on track to become the best-selling game console of all time. That growth was supercharged during the COVID pandemic in 2020 when everyone was stuck inside.
Just recently, at the beginning of April 2025, Nintendo displayed the successor to the Nintendo Switch – fittingly called the Switch 2 – to massive acclaim from the gaming industry. However, it wasn’t until after they showed it off that more information began to trickle out…
The Nintendo Switch 2 was announced to be released June 5 and cost $450. Much more expensive than the affordable $300 Switch. Yet, the biggest jaw-drop was the cost of the exclusive games. Mario Kart World, the new Mario Kart for Switch 2, costs a whopping $80.
The cost of video games has stayed stable for a long time, even as inflation rose. Throughout the past 10-15 years, new games were always $60. Later, around 2020, games went up gradually to an industry standard of $70. There has never been such a sudden increase in price quite like what Nintendo is asking for.
With President Trump’s tariffs on China going into effect (at the time of this writing), pre-orders for the Switch 2 have been delayed. Nintendo claims they need time to “access current pricing amid global financial situations.” So, who knows, maybe the Nintendo Switch 2 will get a price increase – just what everyone wants.
New Frontiers for Gaming
As the industry continues to evolve, gaming has started to spread its reach to other places. Esports have since become a huge business for competitive video games. The esports industry is booming, projected to be worth more than $12 billion by 2030, according to Grand View Research. This explosion of interest is driven by the growing popularity of video games. Another new market for video games is through movies and TV adaptation. A Minecraft Movie has become the most successful movie of the year and is on track to become a billion-dollar picture. Films like The Super Mario Bros Movie and Sonic the Hedgehog movies have raked in millions these past few years.
As the gaming industry seems to be drastically changing, whether through industry consolidation, exclusive titles, free-to-play, subscriptions, or shockingly high prices, it keeps looking for ways to expand into other facets such as esports and feature films. Technology will never stop evolving and gaming will always be there to ride that wave – if that wave doesn’t cross over the $100 game mark. *
