Opinion: AI may be a secret weapon for Game Pass, PS Plus subscription retention

Next-gen PlayStation 6 and Xbox Next consoles may use dedicated AI chips that unlock new opportunities for Sony and Microsoft.

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Reports indicate that Microsoft's new Xbox will have an AI processor, potentially an NPU (Neural Processing Unit), that handles a multitude of tasks. Sony's next PlayStation 6 console (or even the PS5 Pro) may likewise have a dedicated AI processor to help streamline operations and unlock new features.

In fact, Sony recently patented a solution for real-time predictive assistance that's powered by artificial intelligence. The patent would essentially use AI to help players beat difficult in-game levels or bosses with tips and tricks being shown on the screen. The tech relies on libraries of player characteristics data that's collected, analyzed, and interpreted by AI. The PlayStation console would create player profiles based on things like skill, game preference, use of services, etc.

This patent gave me an idea: What if Sony and Microsoft used their respective AI solutions to help fortify subscriptions?

The hypothesis seems like a no-brainer. Both companies make billions of dollars from video game subscriptions, but the models have a definite impact. Xbox is weighted towards Game Pass, so if the subscriber base stalls or shrinks, then could be a problem for Microsoft.

Sony, on the other hand, is weighted towards premium full game sales. At least when it comes to 1P revenues--PlayStation makes many billions from add-on content from F2P and AAA games.

Despite their differences, both Sony and Microsoft have something in common with subscriptions: Retention is key.

It's critical that both PlayStation Plus and Xbox Game Pass keep subscribers for as long as possible. This is the white whale of subscriptions as all services of this type are subject to churn, especially in such a challenging economic environment.

Retention isn't easy, and soon it may not be enough to just add more lumped value into the subscription. Both companies have overrun their services with heavy-hitting AAA games in the hope of attracting users with value, but after consumers bite, the quest for retention begins.

AI could arm Microsoft and Sony with a more savvy solution.

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There's a few use cases for AI integration into subscriptions. Theoretically, AI may be able to better serve subscribers with games they'd enjoy. Subscriptions can be overwhelming, especially PlayStation Plus Extra/Premium and Xbox Game Pass, both of which have access to hundreds of games. A better, more interactive discovery solution is needed, one that is tailor-made for a consumer's particular tastes. Cross-linking with the planned Universal Storefront could provide relevant telemetry data gleaned from mobile use.

This dynamic recommendation system goes farther than just games and could tie into the entire network of services and content. The solution could also be interactive, allowing users to be able to play a portion of a game while in-menu via cloud streaming tech.

We've seen multiple interesting patents from Sony that indicate innovative features could be coming to PS5, the PS5 Pro, or even the PlayStation 6 which is believed to release sometime in 2028. One of these patents ties into the predictive assistance tech--it describes a "game jump" feature that effectively lets players capture, share, and play small slices of video games. Think of it as a kind of interactive demo that's facilitated by the cloud.

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AI could also help better facilitate new engagement methods, potentially including watching an advertisement for an in-game item, or serving more relevant ads to consumers. Microsoft's gaming teams have telegraphed various ideas using advertising, including offering free access to games for limited time in exchange for watching a block of ads.

Insofar as a rewards perspective, AI could help identify which subscription-specific rewards and bonuses are more relevant to player profiles. For example, someone who plays a lot of Halo may prefer an in-game item for that game, or perhaps a promo to watch a season of the Halo TV show.

It'll be interesting to see how these business models mature over time, and how PlayStation and Xbox choose to utilize AI in their storefronts, content and subscription services, and hardware.