The two premium video games consoles, the Sony Corporation (NYSE:SNE) (TYO:6758) Playstation 4 and the Microsoft Corporation (NASDAQ:MSFT) Xbox One, have both been in circulation for nearly two months now, as the battle of the next generation consoles raged over Q4 of 2013, particularly the key holiday period. So with some of the figures now in and gamers having had time to assess both of these highly anticipated machines, which one is coming out on top thus far, and what are their respective prospects for 2014?
Numbers give PS4 the edge so far
Pretty much all the sales data which is in so far has pointed to the PS4 outselling the Xbox One. Although the Xbox One has stood up fairly well in its core market of the United States, Sony Corporation (NYSE:SNE) (TYO:6758)’s console nevertheless sold faster in the first 48 hours after release, indicating that there was more initial appetite for the PS4. The Xbox One has closed the gap since then, which has been attributed to supply issues, and Microsoft Corporation (NASDAQ:MSFT) have even claimed that they’ve sold more consoles in the United States than Sony.
Nevertheless, overall it is clear that Sony Corporation (NYSE:SNE) (TYO:6758) has stolen a march on Microsoft at this point in time on sales figures alone. The PS4 has performed consistently better than the Xbox One across Europe, and recent sales figures from the UK indicate that Sony has shipped nearly 175,000 more consoles in Britain than Microsoft has been able to sell. This is no mean feat; it represents about 45 percent more.
Thus, it is hardly surprising that Wedbush Securities analyst Michael Pachter believes that the PlayStation 4 will outsell the Xbox One by 30% between now and 2016, summing up his analysis of the current market situation by stating that he fully expected Sony to come out on top in the current console generation.
This is obviously the bottom line which concerns both Sony and Microsoft primarily, so is there any conceivable good news for Microsoft which indicates that they might be able to reverse current trends?
Xbox One more of a multimedia machine
It has been evident from day one that Microsoft view the Xbox One as a multimedia machine and that they intend to gain a significant stake in the living-room, not the basement, with this particular console. It is arguable, in fact, that this has been the entire modus operandi of the software giant from the very first day that it entered into the video games console market.
Despite the fact that this particular strategy hasn’t been at all well received, Microsoft has seemingly yet to remotely alter it, with the commercial campaign for the launch of the console emphasizing the fact that the Xbox One enables users to consume all of their media in one place. This mirrored the initial launch event which strongly underlined the multimedia, and particularly televisual, capabilities of the console.
Unfortunately, Microsoft seem to be effectively dipping their toes into numerous markets without really appealing to a core audience. The average middle-aged parents who are not particularly tech savvy or fixated are not going to buy a video games console in order to watch TV; they just view it as a frivolous purchase. And hardcore gamers have been alienated by Microsoft’s marketing strategy, annoyed by the company’s attitude to pre-owned games and the console having to be online constantly, and uncomfortable with the ubiquity of the Kinect device which is central to the Xbox One console experience. In addition, Sony’s machine is evidently more powerful, and some of the early Xbox One titles don’t even run in 1080p.
One of the primary secrets to any line of business is to give customers what they want instead of telling them what they want. It seems that Microsoft have been guilty of doing the latter with the Xbox One, with some of the much vaunted features of the console receiving a lukewarm reception from gamers, while Sony appear to have delivered a console which truly meets the needs and desires of its core market.
PS4 appeals to gamers, gamers’ wallets
This would obviously point to Sony Corporation (NYSE:SNE) (TYO:6758) having an advantage in the marketplace anyway, but the PS4 is also cheaper than the Xbox One! It’s hardly surprising that the PS4 looks to have a lead in the early sales figures, considering they’re selling a more powerful machine, at a lower price point, that caters more appropriately to its core market.
Of course, the Xbox One has still sold pretty well; it would be wrong to assert that it has been a failure. The figures aren’t disastrous for Microsoft Corporation (NASDAQ:MSFT), and plenty of people have stayed loyal to the Xbox One and are evidently greatly enjoying it. But the voice operation has been frequently reported to be less responsive than one might like (and some might consider it to be utterly gimmicky anyway), loading times are without doubt longer than the PS4, and the television integration promised works less than adequately outside of the United States.
Clearly Sony has some good momentum on its side, and Microsoft Corporation (NASDAQ:MSFT) looks to be playing catch-up. There are two possible schools of thought on the future of the Xbox One. Either developers will begin to get as much out of it as the PS4, and its superior multimedia functionality will mean that it gains an edge over the PS4 which allows it to close the gap. Or the fact that the Xbox One had the better launch titles of the two consoles and still finished in second place indicates that once some of the big and unique titles and indie games planned for 2014 for the PS4 are released, Microsoft Corporation (NASDAQ:MSFT) could find itself well and truly floundering in Sony’s dust.
