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Microsoft continues to lag Sony in console battle

  • Microsoft (MSFT) has sold over 5M Xbox One computer gaming consoles to retail shops since launching the device in November, well below the more than 7M PlayStation 4 machines that Sony (SNE) has sold since its product was launched last year as well.
  • Still, Xbox One sales have outpaced those of its predecessor, the XBox 360, by over 60% at the same point in time since launch.
  • The introductions of the Xbox and PlayStation 4 helped boost U.S. sales of consoles in March by 78% on year to $395M.
  • However, sales of videogames fell 28% to $432M, with revenue to multiplayer Internet games such as "World of Warcraft" dropping 19% to $84.8M.
  • Tickers: EA, ATVI
Comments (26)
  • Tales From The Future
    , contributor
    Comments (4048) | Send Message
     
    I think the lead will even increase because SNE only started shipping in Japan in late Feb 2014, it has a virtual monopoly against MSFT there.
    18 Apr, 07:32 AM Reply Like
  • AceVentura
    , contributor
    Comments (43) | Send Message
     
    "Xbox Off" - How big is the pool of people willing to spend about an extra $100 to talk to a gaming console? I think from this point on it is small. Now that MSFT has made the easy sales what is next? They have failed to make an argument for casual and non-serious gamers. PC gaming machines will always be ahead of consoles and more flexible. Will we see a price drop? If so, it needs to happen before the third quarter.

     

    Ultimately I think MSFT got it all wrong. It is not about a generic box with generic electronics, it is the experience. The goal should be to have an Xbox attached to every television in the world - have the Xbox functionality built into ever newly manufactured television or video device. When the price is at least sub $300 we will have something to talk about.
    18 Apr, 08:48 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3666) | Send Message
     
    What are you missing here?

     

    Maybe you don't realize the price comparison isn't even fair. Its not fair to say that Xbox One costs $100 more, because they are not comparably equipped. The PS4 does not come with its own motion sensor, which costs and additional $69. Also, Sony is losing money on each hardware sale. Microsoft did this for Xbox 360 and learned a long hard lesson in cash flow bleed, as it took 5 years to break even, and then turn a profit. This time, they are making a small per unit profit plus earning subscription and game profits. Sony will only be able to make up losses from subscriptions and games.

     

    Also, Microsoft dwarfs Sony as a company, and is AAA rated credit and you can be certain the future for Xbox is strong. Sony, on the other hand, can't even make money on a movie. Have ruined every MMO they got their hands on, and run the TV brand into the toilet. One successful product sold at a loss is nothing impressive.
    18 Apr, 05:11 PM Reply Like
  • dezee
    , contributor
    Comments (203) | Send Message
     
    Price is $450 w/ Titanfall, thats supercheap to me since you get $60 game and $50 haircut.
    18 Apr, 11:39 PM Reply Like
  • wil3714
    , contributor
    Comments (1583) | Send Message
     
    For the extra $100, you get a superior gaming system with biometrics, voice recognition, and motion sensor technology.

     

    True it isnt the best gaming device or console but if you look at the Wii, they were very successful selling family oriented games and fitness motion sensor games. The family oriented and kids sector of gaming they are going to dominate once those game start coming out. They release monsters vs aliens and now Kinect Sports Rivals.

     

    Wait for Halo and Gears to come out. Also they are in talks about releasing a dumbed down version of Xbox more toward media consumption and subscriptions.
    18 Apr, 11:54 PM Reply Like
  • AceVentura
    , contributor
    Comments (43) | Send Message
     
    I am a gamer, I follow the industry closely and am aware of the heated debates on these issues. Clearly there are pools of people willing to pay an extra $100 for a motion sensor and there are those who are not. Why cater to one pool of people and not the other? There was a time for the Henry Ford's Model T approach of giving the customer any color they wanted as long as it was black, but this is not that time.

     

    I know many gamers want a box with the best technical specs, but some don't. Personally, I want a good experience, good games with good story lines - like the Mass Effect series. I recently replayed that series and would do it again rather than play a game like Titan Fall with virtually no story line - even given the better graphics on the Xbox One.

     

    Subsidizing hardware for market share can be a very beneficial long-term business strategy. MSFT, in my opinion has burned much of the good will it created with the 360. As a person who owned the original Xbox, the 360, now I am considering the PS4 - MSFT should have made this a non-issue along with making the library of previous generation games available. Sony will win this round of console wars, if MSFT does not act aggressively and before the Holiday season.
    19 Apr, 08:56 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3666) | Send Message
     
    But the motion sensor, which also includes infrared, and can detect your heart beat by looking at you, is the central piece of the entire system. Sony can't touch it, which is why they abandoned it. Sony can't compete with MS Kinect technology.

     

    Also, MS and Sony were both planning the reviled DRM rules. MS went first with the announcement, Sony saw the utter contempt the public had about it and acted as if they never planned to do it. Also, PS4 is not backward compatible either. The only backward compatible system on the market is the Wii U.
    19 Apr, 10:20 AM Reply Like
  • dezee
    , contributor
    Comments (203) | Send Message
     
    Xbox is much more superior than the PS4, dont know what the argument is. You can do so much more with the device.
    20 Apr, 05:24 AM Reply Like
  • AceVentura
    , contributor
    Comments (43) | Send Message
     
    Who is going to own the living-room? This question is fundamental to the argument. Perhaps owning the living room is not a possibility the way MSFT owned the PC.
    20 Apr, 11:43 AM Reply Like
  • wil3714
    , contributor
    Comments (1583) | Send Message
     
    Donr need to own it just be relevant
    20 Apr, 05:32 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (3666) | Send Message
     
    Maybe it will be Steam.
    20 Apr, 08:01 PM Reply Like
  • Island_Dweller
    , contributor
    Comments (359) | Send Message
     
    SNE is going to enjoy this lead for quite some time I imagine but the lead will shrink as the product cycle matures.

     

    Not to sidestep this feat by SNE as it is quite monumental given what the company is dealing with.
    18 Apr, 08:50 AM Reply Like
  • Ruffdog
    , contributor
    Comments (1217) | Send Message
     
    MSFT has bigger plans for the xbox and if they do not pan out MSFT will get out of the console game. MSFT is making a lot more profits on 5m xboxs than s is making on 7m.
    18 Apr, 09:49 AM Reply Like
  • techy46
    , contributor
    Comments (5471) | Send Message
     
    Who cares? Microsoft's consumer ecosystem has so many facets like cloud, enterprises, PC's, search, smart phones and tablets it doesn't really matter that they're number 2 in gaming consoles trailing SNE by 20% while making probably making 20% more in GM. Microsoft's Xbox is part of a winning ecosystem while PS4 is part of a lost basement ecosystem.
    18 Apr, 11:15 AM Reply Like
  • throberts3
    , contributor
    Comments (111) | Send Message
     
    Microsoft is a huge company with a terrific emerging ecosystem, but there should be concern if PS4 is outselling XBox One ("XB1"). Neither company makes serious money selling hardware - the real money (for Microsoft, at least) lies in selling entertainment software for XB1. Given the cash flow generation of its entrenched enterprise software business and its cash rich financial position, Microsoft could cut prices and sell XB1 at a loss in order to expand future software sales. A Razor and Blades strategy - give away the razor in order to sell the blades.

     

    Going one step further, the Razor and Blades strategy could also be employed in the much larger smartphone business when Microsoft closes the Nokia purchase. Microsoft could sell feature-packed Lumia smartphones at a loss in an effort to speed adoption of Win 8 OS and become a more significant competitor against Android and IOS. Once Win 8 OS is established, Microsoft will be able to sell high-margin software into this new (for them) consumer market for the foreseeable future.
    18 Apr, 12:36 PM Reply Like
  • dezee
    , contributor
    Comments (203) | Send Message
     
    Have to wait till majority of the games come out to see whom is top dog
    18 Apr, 12:25 PM Reply Like
  • User 18659682
    , contributor
    Comment (1) | Send Message
     
    The $100 diff is going away. You are already seeing $449 with Titanfall which makes it a better deal than PS4.
    18 Apr, 01:34 PM Reply Like
  • Loubardeas22
    , contributor
    Comments (2) | Send Message
     
    Lower prices over time are inevitable and both companies will aggressively package their consoles to gain sales, just like in the last generation. The two key things that will determine the winner in the long run are 1. Exclusive game titles. 2. Customer perceptions of best non-gaming services.

     

    I think right now Sony has the edge on #1, but MSFT has the edge on #2. If MSFT can come up with a few solid exclusive games and package them with the console at the right time, could be game over.... but I just don't see what those games might be at this juncture.
    18 Apr, 02:16 PM Reply Like
  • wil3714
    , contributor
    Comments (1583) | Send Message
     
    What games titles does Sony have? I dont even know of one game they sell.

     

    Exclusive game titles to wait for are Halo and Gears.
    18 Apr, 11:47 PM Reply Like
  • techy46
    , contributor
    Comments (5471) | Send Message
     
    Let's see 5 million is 28% less then 7 million but $500 is 25% more then $400. So Microsoft's giving up 28% of the units but getting 25% more ASP and SNE's making $300 million more. I don't think Microsoft's really concerned about giving up $300 million to put a media server in 5 million homes. Most users of Microsoft's ecosystem don't really care about the $100 price difference and most non-Microsoft users still wouldn't buy the Xbox One if it was the same price as the PS4.
    18 Apr, 10:42 PM Reply Like
  • jac mac
    , contributor
    Comment (1) | Send Message
     
    Msft hasn't got an ecosystem. They don't sell many smartphones or tablets. pc sales are way down. Android Linux and IOS are taking over over. Xbox one will never outsell PS4. lost cause, they tried and failed by hoping people will use a games console as a media centre. PS4 is the only new generation pure games console.
    19 Apr, 03:28 AM Reply Like
  • wil3714
    , contributor
    Comments (1583) | Send Message
     
    PS4 is crap cant name one game on it vs the most innovative device out there with some of the most advanced technology all-in-one device. Android is malware farm growing everyday, and crap iOS is for unproductive games. Wow innovation, really? iOS crap, Android crap OS Identity thief garbage, and PS4 crap, Playstation Move crap who cares.
    19 Apr, 05:02 AM Reply Like
  • Island_Dweller
    , contributor
    Comments (359) | Send Message
     
    Linux? Taking over Windows? -- and the evidence for this is where exactly?

     

    Sony botched the PS3 launch, more expensive, difficult to develop for, yet they manage to keep up with the 360 until the end. The recent console cycle refresh is not even 6 months old, on a product cycle of many years, and you can jump to this conclusion of never outselling because of what data exactly?

     

    While it's obvious Microsoft flubbed the XO launch pretty fierce, their message is still the same (all-in-one entertainment device), and given some time my opinion is that SNE will play some catch up in the non-gaming department because after the initial wave of purchases, consumers will look to which console offers more.

     

    Purest gamers will go for the PS4, because that's Sony's target, hence the initial strong demand (pure gamers are the ones who preorder and stand in lines), over the length of the race the XO has the upper hand. Why? You begin to look for value in your next console purchase. The facts clearly show the XO has sacrificed some gaming power for more utility and functionality. Some may refer to them as gimmicks, but even the harshest critic admits their usefulness. One of my favorites is making my dinner while manipulating the XO via voice commands to set up my entertainment for the evening.

     

    In the end this console generation will reveal whether consoles will derive their success from specialization (PS4) or expanded functionality (XO).

     

    My last point, and one that a lot of the masses miss is the churn of Xbox Live sub numbers. I think this number is vastly more important than console sales. MSFT's long term strategy here is corralling consumers into their ecosystem, and Xbox Live numbers are a direct line they will leverage in the future. Watch and see.
    19 Apr, 11:49 PM Reply Like
  • TGP59
    , contributor
    Comments (69) | Send Message
     
    Agree with everything except the notion that most or all "Purist gamers will go for the PS4." I agree we can argue the point, but don't forget about Microsoft's superior line of exclusive game franchises. This will definitely influence longtime Xbox gamers who are considering switching. Your final point is my favorite. Xbox Live has been and will continue to be key for MSFT's longterm plan. Last I propose a question...would you rather talk to your glasses for $1,500 or to your entertainment center for $500?
    20 Apr, 12:19 AM Reply Like
  • wil3714
    , contributor
    Comments (1583) | Send Message
     
    Yeah but you can walk around with the glasses out on the street while people stare at you like an wth and laugh. Are they taking a pic of me? Isnt that worth $1500 for a cool guy?
    20 Apr, 04:10 AM Reply Like
  • synchrogeddon
    , contributor
    Comments (180) | Send Message
     
    ... but can you earn money with your consoles when mining cryptocurrencies? Gaming PC wins always ;)
    19 Apr, 07:12 AM Reply Like
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