The gaming industry is looking more and more alien as time goes by.
Almost a couple of years ago now, Microsoft began porting Xbox exclusives to PlayStation, breaking decades of platform-exclusivity conventions. Many called it the end of Xbox, myself included, wondering just how long the Xbox hardware ecosystem would last without the promise of home-grown exclusive games. Fast forward a couple of years, and the answer is “pretty well, actually.” At least if you’re going off pure revenue, that is.
At Microsoft’s recent earnings report, CEO Satya Nadella waxed lyrical about how well Xbox is doing, touting record engagement and continued growth for Xbox Game Pass and overall playtime hours. However, the good news didn’t stop Xbox laying off hundreds of people, as part of wider cuts at the firm.
Xbox isn’t alone there, of course. Many studios, both big and small, have been impacted by cuts, stemming by intense competition from other forms of entertainment. Infinite-games like Fortnite and Roblox are gobbling up playtime hours and money, while addictive algorithms from the likes of TikTok and Instagram eat into potential customer’s free time.
To offset some of these challenges, Microsoft has sought to eliminate the barriers to entry to its products. That means putting Xbox games onto PlayStation, but also PC, mobile devices, and even TV sets, via Xbox Cloud Gaming.
The strategy is definitively working. Xbox has begun dominating PlayStation’s own storefront, without seemingly denting its own Xbox Series X|S and Xbox One playtime hours, as users increasingly just habitually stay where they are. Meeting those habitual gamers where they are is becoming the strategy du jour seemingly, with even PlayStation ready to jump on board.
PlayStation itself has become a direct publisher on Xbox, with its first title, Helldivers 2, gearing up for launch next month. That might not be all either. Team Blue is also hiring for a director for third-party relationships, with a specific focus on Xbox and PC, hinting that even more games could be coming.
The news hasn’t sat well with console war-minded folk, and this latest bit might not either.
Sony Senior Vice President Sadahiko Hayakawa says they are gradually shifting their gaming business from a hardware centric business model to a community and engagement based platform business model #PlayStation“In the gaming business, we are moving away from a hardware centric… pic.twitter.com/8xnKyihMHEAugust 7, 2025
During PlayStation’s recent earnings call, the electronics giant announced it has now sold through 80,000,000 PlayStation 5 units, which is an incredibly impressive number. But Sony isn’t sitting on its hands.
Senior Vice President Sadahiko Hayakawa noted (via @Genki_JPN) that PlayStation is gearing up to ditch its “hardware centric” business, moving towards a more “engagement-based” platform. Sound familiar?
“In the gaming business we are moving away from a hardware centric business model more to a platform business that expands the community and increases engagement,” Hayakawa said to investors, responding to a question about Sony’s investments in IP. Sony has invested in Kadokawa of Elden Ring and Dark Souls fame, and has also invested in Bandai Namco, amongst various others.
Does this bode well for more PlayStation games hitting Xbox in the future? It sure does, I would think.
Could more PlayStation games hit Xbox?
Microsoft has also quite clearly moved away from a hardware-centric model in recent years, as competition for eyeballs has shifted away from consoles and increasingly towards mobile devices, laptops, PCs, and directly on television sets.
Xbox’s hardware business has shrank, but its remaining users are incredibly loyal and sticky — and remain highly engaged, especially in Microsoft’s core markets. If PlayStation didn’t think Helldivers 2 would sell on Xbox, there’s absolutely no reason to think they would’ve bothered. Indeed, Helldivers 2’s own CEO said that PlayStation was the driving force behind the port. Sony-owned Bungie‘s next game, Marathon, is already confirmed for Xbox too. It stands to reason that other service games could be coming too, but perhaps even single player titles as well.
The audience for these types of experiences is shrinking, hence why Sony began supporting PC in the first place, and if the next-gen Xbox is going to grab Steam anyway … then, perhaps Sony will eventually seek to cut out the middle man.
Indeed, Xbox is expected to expand its next-gen Xbox console ecosystem to incorporate other store fronts, such as Steam. It would probably behove Sony to consider making its own PC storefront and launcher too, to sell direct to Xbox customers in that more open future, eliminating the need to give Steam or Xbox a cut of the revenue.
Epic Games is also battling Google and Apple to carve out a more open future on mobile too. Epic has won in some areas, but Apple and Google have both invested mountains of cash in obfuscating the legal rulings. Microsoft itself had plans to build a mobile game store for iOS and Android at one point, but realized Apple and Google weren’t going to make it easy enough to be worth while.
As Sony and Microsoft battled each other for the adult, high-spending audience, an entire generation of gamers slipped away to iPad via Roblox and Fortnite. Now that generation has grown up, and sees consoles as archaic. Meeting that new generation where they are, namely PC, is going to be the name of the game going forward. And in that universe, there’s no reason to not support the passionate users on console as well — regardless of where they are.
Otherwise, in my view, Sony and Microsoft both risk losing the entire segment potentially, and giving all of the keys over to Steam and its 30% cut.
