They will keep doing what they were doing before(and improving upon it), and they will still beat MS.

Honestly, I don't understand this MS x Sony. Microsft and Sony biggest competitor was, is and always will be Nintendo.

I hope neither Sony or Nintendo ever adopt this model as their main strategy. GaaS never has, and never will appeal to me for console gaming.

Give me full fat £50 quality exclusives over the years that I happily own, share, play and replay.. over Nexflix style throwaway model, any day.

I think you lost a little bit the focus on the question.

Is about how sony will respond, not how we wish itd respond. As you can read in comments above, sony doesnt feel treatened by GP, as they continue being successful with their bussines model. On the other hand, of course we would like cheaper games, and to spend less money, but that doesnt mean sony will "give us" this, if its doing pretty well as for now.

The real issue is that Microsoft responded to Sony's exclusive lineup and strong hardware sales with Gamepass.

Actualy it's 2.4B/year at 20M subs

You can never get something like gamepass completely replace gaming without hurting developers profit and diversity/quantity right?

Yes and too many people don't understand why.

Gamepass means MS is the gatekeeper. Whereas before you had the market decide on the allocation of revenue now you have MS decide how much each dev gets to be paid, which is far more inefficient and will lead to under and over evaluation.

In addition, SP AAA games will take the backseat as MS would want players to continue to renew their subs, hence games as a service. We already see this with Halo, Forza, and rumoured to be Fable. In fact any game that goes against MS's ambition will be hurt as MS is the curator now, whereas before it was the market.

Tell us more about it, pls. Sony and Microsoft have been selling the same product with the same capabilities and specs so they naturally have to compete for the same audience. They're natural competitors in all basic business sense. How do you think their biggest competitor is Nintendo instead?

Do I have to? It's pretty obvious...

1 - Nintendo is the oldest player in this game. You never subestimate Nintendo.

2 - On the more tangible reasons, any company that is inside the gaming industry is competing with each other, dierctly and indirectly. And that's especially true for MS, Sony and Nintendo, which are all console manufacturers. MS and Sony are now catching up with Nintendo, entering into the 9th gen, which Nintendo has a "3 year advantage". Not only Nintendo has a bigger library that uses the Switch full capabilities, but it's an extremely strong library of first and third party games.Not only that, but it's biggest gun going into this holiday it's that it's going to be much cheaper than the PS5 and the Series X, potentially being 250 dollars during Black Friday.

When Nintendo was weak(During Wii U), it not only beat Sony in the handheld market, but it came back strong with the Switch. After countless failures, Nintendo never left the console war, while MS seems to be going the Sega route(which would eliminate it as a competitor, as far as Sony is concerned). And the the most important part of the industry, the software, is where Nintendo is easily the strongest of the three, in sales numbers, quality, quantity and variety.

Sony and MS may be similar in the hardware design, but that alone dosen't mean that they are their only direct competitors.They are first and foremost a hardware maker, and thus it makes Nintendo a direct competitor too. Add to that Nintendo strenghts, and they are easily it's strongest foe.

PC and Nintendo gamers have it great but they're always left out of the conversation and many resent that.