The PlayStation 4 is now available for purchase, but we’re still a week away from the launch of the Xbox One. So if you’re in the market for a new gaming console, should you buy the PS4 now or wait for the Xbox One? We’ll take a look at the features of each of them, but first, let’s see what these new consoles may mean for investors interested in the companies which make them.
Expectations for the console gaming industry
Analyst Kota Ezawa and the rest of the analyst team at Citi suggest that the gaming console industry as a whole will be down because of device exhaustion. They cite their recent survey of U.S. consumers, which indicated that just 8% of those who were asked said they planned to buy a new console within the next 12 months. That’s compared to 14% in 2010.
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As a result, they’re expecting that sales for both the Xbox One and the PlayStation 4 will be lower than sales for their predecessors were. They don’t believe either console will move the needle for either of the two companies selling them—Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (NYSE:SNE) (TYO:6758).
The analysts say when comparing the two consoles, they think Sony’s new PlayStation has the edge, although when comparing companies, they like Microsoft more than Sony. They also believe the new consoles will benefit the companies’ supply chains rather than the companies themselves.
Why the PlayStation 4 might be better
The PlayStation 4 is available for purchase as of today in North America. The games for this console are generally more casual than the ones which are available on the Xbox. The PS4 is also a hundred bucks cheaper than the Xbox One at $399, and Citi analysts suggest that pre-launch reception of the console has been better than it has been for the new Xbox.
They’re modeling a $250 million life cycle profit, but they say there’s a risk that the end of the console’s cycle might not be any more profitable than the beginning because demand for consoles may be waning due to competition from tablets and smartphones.
Why you might want to wait for the Xbox One
The Xbox One will be available for purchase on Nov. 22, which is a week from today. Microsoft Corporation (NASDAQ:MSFT) has done a good job of lining up games which are exclusive to the Xbox platform, so it’s worth checking to see if the game you want to play is even available on the PS4. Sports also play a big role in the Xbox franchise compared to the PlayStation franchise. However, the Xbox One is priced at $499, so you’ll have to pay more for it.
The reason the Xbox One hasn’t been as well-received pre-launch as the PlayStation 4 is because of some mistakes Microsoft made in restricting used game sales and requiring the console to be connected to the Internet at all times in order for it to be used. The company has since rescinded these restrictions, but nonetheless, they may have left a sour taste in some gamers’ mouths. Others may not even be aware that they were rescinded.
Of course both the PS4 and the Xbox One have features which differentiate them from each other, which is why both are able to survive so well in the market. At the end of the day, it just depends on what you’re looking for in a gaming console.