A new report from Benchmark research takes a look at the future of the console gaming market. Analyst Mark Hickey concentrates the report on the likely demand for the Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (NYSE:SNE) consoles due to be released next month. The answers are far from concrete, but the trends look good for the Sony PS4 right now.
According to a survey done by Reuters, which Hickey quotes in his report, 26 percent of respondents preferred the Sony Corporation (NYSE:SNE) PS4 this coming holiday, while just 15 percent said that they preferred the Microsoft Corporation (NASDAQ:MSFT) offering Xbox One. Below the age of 41 percent picked the Sony PlayStation 4, while 27 percent picked the Xbox one.
Trouble for Microsoft
The numbers indicate trouble ahead for Microsoft Corporation (NASDAQ:MSFT), but there probably will not be too many consoles left on the shelves this Christmas. Unless one console is routed, early sales are unlikely to have a massive effect on the console market once the new machines mature. Early users are important to attract developers to platforms, rather than for sales of their own accord.
The Microsoft Corporation (NASDAQ:MSFT) that makes the Xbox One isn’t that profitable by Microsoft standards, even though the Xbox 360 is the only successful piece of hardware the company has ever made. Margins at the business drag down margins at the company as a whole and some have even suggested spinning off the unit because of its relative profitability.
Microsoft Corporation (NASDAQ:MSFT) seems to be continuing its strategy of becoming a major manufacturer of hardware, so it’s unlikely that the Xbox One unit is going anywhere fast. The future of the console industry will likely be defined by Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (NASDAQ:SNE), unless a scrappy upstart arrives from Valve in the form of the Steam Box.
Xbox One and the future of consoles
Many commentators will blame the lack of demand for the Microsoft Xbox One on the campaign that accompanied its launch. The Redmond company made several missteps as it sought to sell the Xbox One as not just a console but an entire living room experience. The firm’s endeavors to restrict used game sales and maintain a data connection at all times were also unpopular.
For investors, the console gaming market does not factor into many decisions. At Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (NYSE:SNE), the businesses are too small to have a significant impact on earnings. There are publishers out there that are traded publicly, however, and some investors are fond of that market.
According to the Benchmark report, the most popular game this Christmas are likely to be GTA. The rest of the list, in order of projected popularity are Call of Duty: Ghosts; Assassin’s Creed IV: Black Flag; Madden NFL 25; and Battlefield 4. Call of Duty is published by Activision Blizzard, Inc (NASDAQ:ATVI), Assassin’s Creed is published by Ubisoft Entertainment SA (EPA:UBI), GTA V is published by Take-Two Interactive Software, Inc. (NASDAQ:TTWO) while Madden and Battlefield are both published by Electronic Arts Inc. (NASDAQ:EA)