Nintendo Switch has proved to be a roaring success. If it maintains the same momentum through the holiday shopping season, it could eat into the sales of Xbox consoles. On the other hand, Sony’s PlayStation consoles continue to outsell Xbox by at least two-to-one. Microsoft is hoping to regain some ground against rivals with its upcoming Xbox One X console, the world’s most powerful one.
Xbox One X and Switch target different markets
Will Xbox One X prove to be for Microsoft what Switch is for Nintendo? The Switch and One X are two entirely different consoles, targeting different consumer groups. The Switch is a hybrid console that you can attach to a TV for living-room gaming or play on the go. It’s for casual gamers. The Xbox One X, on the other hand, is for hardcore gamers who want the best of everything in a console. It has been designed like a PC with powerful graphics cards and Bluetooth controllers.
Ahead of the One X unveiling at E3, Microsoft put up a survey in the Xbox Live Rewards program to understand what consumers liked about Nintendo Switch. Nintendo’s Wii U console was a major disaster. Amid the rising popularity of smartphones, investors suggested that the company should either reboot its hardware or bring its popular games to smartphones.
Nintendo has a blockbuster hybrid console
Instead, Nintendo decided to double down on its efforts to develop a hybrid console that offers both living-room and mobile gaming. The result was a blockbuster Nintendo Switch. The Switch has been around for four months, but Nintendo is still struggling to keep up with the massive demand. The company was previously looking to sell 10 million units in the current fiscal year. Now it has increased its production target for the current fiscal to 18 million units.
The increase in Nintendo Switch production has triggered a battle between Nintendo and smartphone vendors to secure the supply of components. The Switch and smartphones use many of the same components. The Japanese company said recently that it would continue to bolster its manufacturing facilities to increase production in preparation for the holiday shopping season.
Xbox One X console: Microsoft knows its core strengths
With Xbox One X, Microsoft is doing something similar to what Nintendo did with Switch, says the Associated Press. The software giant doubled down on what makes its consoles stand out: power and performance. The Xbox One X is the most powerful console ever built. Microsoft emphasized at the E3 event that the One X is for hardcore gamers who want to enjoy the best gaming experience. It brought the focus of Xbox back from a wider entertainment system to a hardcore gaming console.
The Xbox One X is a gaming beast. It boasts 12GB RAM, six teraflops of graphics power, a custom eight-core CPU with 2.3GHz clock speed, 326GB/s of memory bandwidth, and 1TB of internal storage. Sony’s flagship PS4 Pro doesn’t come even close to Xbox One X in terms of specs. The new Xbox supports 4K HDR videos and offers true 4K gaming. Despite all the power it packs, the console is smaller than the entry-level Xbox One S.
Immersive experience at the heart of Xbox One X console
In an interview with The Guardian, the Xbox director of program management Mike Ybarra said he wanted the Xbox One X to offer such an immersive experience that people would “lose track of time because they’ll be having so much fun.” With high-dynamic range, eight million pixels, and Dolby Atmos spatial studio, the console is all about an immersive experience.
Xbox chief Phil Spencer has a similar opinion. He believes 4K is not just a visual enhancement, but a subtle natural addition. The Xbox One X makes the visuals appear more lifelike, and your mind notices it subconsciously. However, experts believe that its price tag could hurt the sales. Microsoft has said that it might lose some money on the sale of each Xbox One X unit.
The console has been priced at $500, making it $100 more expensive than PS4 Pro. Since Microsoft is targeting hardcore gamers who play a lot of games and buy the most titles, it may not have to worry about the price tag. Talking about the Xbox One X price, Phil Spencer gives the reference of Xbox Elite controllers that cost $150, more than double the price of Microsoft’s standard controllers. The Redmond-based company couldn’t make it enough to meet the demand.
Microsoft needs more and better exclusive titles
Only time will tell whether Xbox One X console could do for Microsoft what Switch has done for Nintendo. Much would depend on exclusive titles. Nintendo has Legend of Zelda that has become one of the best reviewed console games ever. Microsoft announced 42 games at the E3 event, including Forza Motorsport 7, Crackdown 3, and the Sea of Thieves.
Microsoft hasn’t yet started taking pre-orders for the console. Microsoft executive Albert Penello recently told Gamertag Radio that the company still had “some fun stuff to talk about,” which it would likely discuss when it starts taking pre-orders. Penello said the pre-orders would begin “closer to launch.” The console is set to hit the store shelves on November 7th.
However, many retailers have put up Xbox One X listing pages on their websites. Though they aren’t taking orders at this point, they allow you to add the console to your wishlist or sign up for an email notification when pre-orders open. Here are the Xbox One X listings on Walmart, Best Buy, Amazon, Target, and GameStop.
Nintendo Switch to outsell Xbox this year
Even if the Xbox One X console turns out to be a major success, one analyst believes that the Nintendo Switch would outsell the entire Xbox One line this year. Wedbush Securities analyst Michael Pachter predicts that Nintendo Switch could sell as many as 14 million units this year. The analyst expects Xbox One to sell 10-11 million units in 2017. Pachter says Switch is a “really good handheld” for $300 and the Xbox One S is a “really good console” for around the same price.
People who want a console go for Xbox, and those looking to buy a handheld opt for Nintendo Switch. Pachter noted that the Switch’s portability gives it an edge. The Switch could sell 3-4 million units in Japan alone, where Microsoft hasn’t yet sold one million consoles yet. The analyst hasn’t taken into account Nintendo’s impressive lineup of first-party games such as Legend of Zelda and Mario Kart 8 Deluxe. The upcoming Super Mario Odyssey could further boost Switch sales.
Xbox One X has a small addressable market
Meanwhile, market analytics firm DFC Intelligence predicts that Microsoft would sell 63 million Xbox consoles by 2021. It includes 17 million Xbox One X units DFC Intelligence expects Microsoft to sell in the next four years. The analytics firm noted that One X is an expensive console that would appeal to “a fairly narrow demographic” of gamers who want high-end graphics, but do not want to spend money on a high-end PC.
It means the Xbox One X console will have a “fairly small addressable market” compared to Nintendo Switch and PS4, both of which offer a lucrative value proposition that consumers are flocking towards.
