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PlayStation 4 and Xbox One Exceed Launch Unit Sales Expectations

Both the PS4 and the Xbox One have often been out of stock at retail.
Both the PS4 and the Xbox One have often been out of stock at retail.

JAN. 7, 2014 • Both the PlayStation 4 and the Xbox One achieved better than expected launch unit sales through the end of 2013. Using the industry focus on the Consumer Electronics Show (CES) in Las Vegas, Sony Computer Ent. president and group chief executive Andrew House disclosed that 4.2 million PlayStation 4s had been sold through at retail world between November 15 and December 28. The day before, Microsoft Corp. announced that 3 million Xbox Ones had been sold by retailers in 13 countries from that console’s November launch through December 31. The post by Yusuf Mehdi vice president of Xbox marketing, strategy and business also claimed that the Xbox One, which launched a week after the PS4, was the fastest selling console in the U.S. during November. The NPD Group, however, reported last month that Microsoft’s new system moved 900,000 units compared to 1 million PlayStation 4s in the U.S. during November. In addition to PS4 sales, House also announced that PlayStation Now, the streaming content service based on Gaikai technology acquired in 2012 for $380 million, will begin beta testing on PS3 at the end of January, and Sony expects to roll out the full service on that platform plus PlayStation 4s and PS Vitas by this summer. Sony Electronics is also making the majority of its 2014 line of Bravia HDTVs PlayStation Now capable. The company is demonstrating the service at CES on PS Vitas and Bravia TVs. PlayStation Now is destined for smartphones and tablets at a later date, but Sony would not say what quarter that was expected to happen.

Wal-Mart's Black Friday ad.
Wal-Mart’s Black Friday ad.

Impact: Frankly, we are amazed at how many PS4s and Xbox Ones made it into the channel and were sold across many markets. Ever since Sony Computer Ent. broadcasted that 2.1 million PS4s had been sold through December 1, and Microsoft disclosed that 2 million Xbox Ones were sold by December 11, we have been waiting for both companies to fill in the blanks on system sales through the end of the year. Most early estimates were that these new consoles would sell a total between 2.5 million and 3 million units each by December 31. But 7.2 million total is an impressive achievement for a next-generation cycle introduction. Granted, Sony and Microsoft are employing far more standardized components than ever before, which allows for a much speedier production ramp up. Still, with the number of Xbox Ones sold at the top end of expectations, and the PlayStation 4’s tally surpassing projections by an appreciable measure, this may be a launch record that may not ever be bested in the future if console naysayers are correct. In the most recent DFC Intelligence reports Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry published in summer 2013 and December 2013, DFC Intelligence forecasted that the PlayStation 4 would be the leading worldwide game system over the next few years. That said, we would not be surprised if sales of both of these consoles track each other fairly closely, especially in the early months when production is still ramping up and demand is high.

World of Warcraft running on an iPad via Gaikai in 2010.
World of Warcraft running on an iPad via Gaikai in 2010.

For the moment our attention is keenly focused on the arrival of the PlayStation Now service. We have been following the progress of Gaikai for four years and concluded the technology involved has the potential of being the most consumer-accessible streaming solution on the table. That was an obvious attraction for use on PlayStation devices to enable backward compatibility with previous generations of Sony consoles. But as Sony is a major consumer electronics company with dozens of platforms, plus major motion picture studio and record label archives, this streaming technology is going to find much employment in the years ahead. By comparison, Microsoft must partner for Xbox Live entertainment content, and has started its own TV studio to create a slate of exclusive programming. PlayStation Now on Bravia HDTVs will also be a significant test of streaming content acceptance on connected televisions. So-called smart-TVs have been slow to catch on with consumers thanks to slow input response and obtuse interface design. Samsung is attacking this state of affairs by building better software tools to improve the streaming of content. But PlayStation Now doesn’t require such measures to implement and can deliver a treasure trove of Sony content much more swiftly. Another asset is the service supports multiplayer matchmaking and standard PSN features such as player messaging, leader boards and achievements. As for monetization, Sony says it will deliver content on a per-title fee basis, or by subscription. A lot depends on the digital pricing, which sometimes Sony has a tendency to go high with via the PlayStation Store to appease wary retailers. But if PlayStation Now content is priced affordably, and server access is geographically widespread enough to make for an enjoyable consumer experience, PlayStation Now could be a major competitive asset for Sony.

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