The fight over whether the new Microsoft Corp. (NASDAQ: MSFT) Xbox One video game console or the Sony Corp. (NYSE: SNE) PS4 is the better product came less than minutes after each was introduced. The early skirmishes do not matter much. These products will be in the market for years, and unexpected changes in prices and the introduction of popular games eventually will determine which posts better sales — and profits.
The first round of the fight went to Sony, which priced the PS4 $100 less than the Xbox One. The price of the Xbox is $499. Analysts assume that, on balance, more people will buy the less expensive product. But this depends on the purchasing habits of loyal Xbox owners and the extent to which potential buyers believe that the Xbox is the better, more fully featured machine.
The Xbox One was criticized by some experts who believe that console sales will be hurt because it has to connect to the Internet for users to take advantage of all of its features. The Verge reported on the connectivity requirements of Xbox One:
In an interview filmed prior to Microsoft’s E3 2013 press briefing and published on GameTrailers, Microsoft’s Don Mattrick has addressed concerns about the compulsory connectivity requirements of Xbox One.
“”Fortunately we have a product for people who aren’t able to get some form of connectivity; it’s called Xbox 360,” said Mattrick.
“If you have zero access to the Internet, that is an offline device.”
Another factor in the sales of the two consoles is the plans of the third large supplier of consoles — Nintendo. There was a time a few years ago when Nintendo Wii products outsold those of both Microsoft and Sony. Nintendo has struggled to replace its wildly popular Wii with another successful product but without luck. That does not mean its engineers cannot build one this year or in 2014.
The largest hurdle to Xbox One and PS4 sales will be the one which has been the greatest challenge to the two companies recently. Gaming has moved online to tablets and PCs. The trend has been relentless, despite the fact that some of the most popular games only run on consoles, and that consoles have become high definition content devices. TIME recently reported on video game console sales:
There are other, more secular factors chipping away at the era of the video-game console as we know it today. For one, there’s the segment of players the industry calls “casual gamers.” If you want to know who they are, look around; they’re the people playing Angry Birds on their phones. And that’s the problem.
It will take two or three years to determine whether the Sony or Microsoft products will be the leader in global sales. In the meantime, the gaming platform may have largely moved elsewhere.