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Will Sony's PlayStation Advantage Last Into Launch?
Will Sony's PlayStation Advantage Last Into Launch?
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
OCTOBER
18
2013


The release of Grand Theft Auto V drove a video game sales turnaround in September. It also helped Sony's PlayStation 3 break the winning streak that Microsoft's Xbox had enjoyed for so long in the hotly contended market for game consoles. Now, with the holidays around the corner, the question is whether Sony can keep the momentum going?

Indeed, Take-Two Interactive’s Grand Theft Auto V (GTAV) gave a huge boost, achieving more than $1 billion worth of sales in its first three days alone, according to company estimates. That’s one of the fastest selling launches of any entertainment properties, including video games and feature films.

"The launch of Grand Theft Auto V this September was a much needed shot in the arm for the industry," said NPD analyst Liam Callahan. "Overall retail sales across hardware, software and accessories were up 27 percent versus September 2012, lifted by software sales of Grand Theft Auto V."

Advantage Microsoft?

Overall, game-related software sales rose 52 percent to $754.3 million year-over-year, according to NPD. And Sony dethroned Microsoft’s Xbox 360 as the best-selling console after 32 straight months of dominance.

But that could soon change. Microsoft just edged Sony for the top position in ABI Research’s game console Competitive Assessment, based on expectations for the impact of Sony’s PS4 and Microsoft’s Xbox One game consoles.

ABI Research evaluated a number of companies across three device categories: game consoles, smart set-top boxes, and TVs/Blu-ray players. The market research firm used several factors to score each company based on two main axes of innovation and implementation.

“With the hardware specs between Microsoft’s Xbox One and Sony’s PS4 so similar this leaves Nintendo’s Wii U on the outside,” said ABI senior analyst Michael Inouye. “If not for Nintendo’s wider distribution network, console heritage, and first party titles it would start to find itself in closer competition with many of the new market entrants.”

Sony fell to second in the game console assessment in part because key PS4 differentiators like cloud gaming are still untested -- and won’t be fully available at launch -- but largely because Microsoft has shown more features on the broader entertainment front. Nintendo secured the third position but a significant gap remains between it and the market leaders.

“As we look at the distribution of companies in this analysis it might look as if we expect a bifurcation in console gaming -- a high end populated by two premium platforms and a larger pool largely based on mobile ecosystems,” said ABI practice director Sam Rosen. “While this might be true in the short term we anticipate the market will come to look more cohesive than not as technologies like cloud gaming place less emphasis on the hardware and more on platforms and services.”

A Game of Influence

We caught up with Michael Pachter, a research analyst at Wedbush Morgan, to get his take on the immediate and long-term competition between Sony and Microsoft on the gaming console front. He told us the only people in the world who care who sold more consoles in September are Microsoft and Sony.

As far as the next Xbox outselling the PS4, Pachter said that’s not going to happen if the price stays at $500 for the Xbox and $400 for the PS4. If the prices are comparable -- if Xbox unbundles Kinect and sells it for $400 -- it may be a different story. But if Sony has a $100 price advantage he expects to see the PS4 sell more.

“Consumers think they are the same box and they are not going to pay $100 more for Xbox unless they are totally addicted to Xbox,” Pachter said. “The reason both companies care so much about the launch is they know that everybody that buys a box at launch is going to tell their friends their box is better.”

Pachter puts it this way: "This about how many people are the same political party as their parents. The people you respect indoctrinated you. So if your parents are Democrats, you are most likely a Democrat and if your parents are Republicans you are most likely a Republican."

Pachter said it works the same way on the console purchasing front: “If all their friends buy an Xbox they buy an Xbox. If all their friends buy a PlayStation, they buy a PlayStation.”

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