Sony's PS4 May Beat Microsoft's Xbox One

Timing is everything when it comes to video games -- something Microsoft (NASDAQ: MSFT  ) will learn as it ends a 32-month streak as the country's top-selling console.

Industry tracker NPD Group reported on Thursday that Microsoft's Xbox 360 was unseated as the country's hottest-selling console in September, while Sony's (NYSE: SNE  ) PS3 took the top honors. Microsoft had ruled over Sony's PS3 as well as Nintendo's (NASDAQOTH: NTDOY  ) Wii and eventually Wii U in the monthly retail market readings since January. NPD is often taken to task for relying on physical retail -- sidestepping the booming e-tail and digital downloading markets in its base metric -- but that doesn't play much of a factor on the hardware end. If NPD says Sony outsold Microsoft for the first time since 2010, it probably happened.

Now we get to the timing issue. Sony is introducing the PS4 in less than a month, and Microsoft will follow with the Xbox One a week later. Gamers have probably assumed that Microsoft would own the new round of console wars, at least domestically. It's the hometown hero. It's the one with tens of millions of diehard gamers willing to pay Xbox Live for gold memberships to provide enhanced connectivity features. However, Microsoft upset some players earlier this year, when it announced restrictive measures for its console. It backtracked on some of the unpopular connectivity restrictions, but then it priced its console at $100 more than Sony's PS4.

There's more to a console war than price, of course. We've seen Nintendo's Wii U fall flat on its face since hitting the market 11 months ago at a far lower price point than either the PS4 or Xbox One. However, if Microsoft was banking on having its momentum make it a no-brainer winner this holiday shopping season and beyond, it may want to fold back up that acceptance speech and work on a concession.

Then again, maybe it's too soon to crown Sony the winner. NPD reports that hardware sales fell 13%, but Wii U unit sales tripled sequentially in September relative to August after its drastic $50 price cut. The Wii U is unlikely to be much of a threat to those eyeing a PS4 or Xbox One this holiday shopping season, but let's not underestimate parents of younger gamers who are hungry for a bargain in this still uncertain economy. 

The industry itself had a strong September on the software front. That's definitely encouraging, but it probably wouldn't have happened if not for Take-Two Interactive's (NASDAQ: TTWO  ) Grand Theft Auto V. NPD reports that Take-Two's marquee release accounted for roughly half of the dollar sales volume of physical software retail sales last month. Take-Two Interactive's game is available for both the Xbox 360 and PS3, so the game's success probably didn't play a part in the PS3's September victory over the Xbox 360.

Both console giants should fare well with next month's debuts, but the picture of the ultimate winner has never been fuzzier. Microsoft has the audience, but now Sony has the momentum.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 20, 2013, at 9:34 AM, Bunnyking77 wrote:

    It took Motley Fool writers about 6 months to realize something that was obvious to all gamers.

  • Report this Comment On October 20, 2013, at 10:05 AM, butthead2u wrote:

    Perhaps PS3 won because most are now waiting for XBox One? We don't even know what all Xbox One has to offer either, Spielberg is involved so it's likely to be over.the top! And who doesn't want to have their face as the character? Also, I wouldn't be surprised if Xbox One had a price cut just before the release.

  • Report this Comment On October 20, 2013, at 10:43 AM, WasherDryerCombo wrote:

    Grand Theft Auto V didn't effect then PS3's console sales last month? The 269.99 GTA5 500 gig PS3 console that released last month sold like mad last month and probably accounted for a good part of those new sales.

  • Report this Comment On October 20, 2013, at 10:56 AM, chitowncs wrote:

    Actually GTA V's success did have a big part in PS3's sales since there was an official PS3 GTA bundle available.

  • Report this Comment On October 20, 2013, at 11:28 AM, Baroc86 wrote:

    "Gamers have probably assumed that Microsoft would own the new round of console wars"

    Though the article goes on to clarify a bit. I think most gamers have said the PS4 was going to win out.

    Just look at presales.

  • Report this Comment On October 20, 2013, at 11:47 AM, Sugoda wrote:

    Somehow people forget that when the PS2 was out if you combined the sales of Nintendo and Microsoft consoles they still didn't come close. Sony dominated with the PS1 and 2 for a decade. Microsoft just had the better community with X-Box live but for actual gamers the PS3 was still better. Unless all you like is mindless shooters.

  • Report this Comment On October 20, 2013, at 12:12 PM, ezboxbreaks wrote:

    i'm sorry.... "MAY BEAT" LOL... Rick buddy... it already has BEAT Microsoft in a GREAT MANY WAYS. for starters? the guts are far superior to what the Xbox has proposed and is still utilizing. which in turn will lead to far superior repair rates as compared to Microsoft who is utilizing substandard gear and soldering methods on their heat sink process. (BTW Microsoft does that on PURPOSE so that you will buy more units) it is what kept them on top the last go around. and I know this because I am in this particular repair industry. I've seen it for the past 10 years. Xbox has been CLEANING OUT YOUR WALLET. this article is completely baseless and I believe that Microsoft has already admittedly "thrown in the towel" on many occasions... and WE DO KNOW what xbox is bringing to the table. there are no more secrets to be had bud. SPEILBERG? LOL and a PRICE CUT? get over yourself fanboy. god himself couldn't save this unit from the inevitable.

  • Report this Comment On October 20, 2013, at 12:36 PM, moopert wrote:

    Wow?!?! You mean gamers remember Microsoft essentially giving us the finger for a month after their announcement?

  • Report this Comment On October 20, 2013, at 2:35 PM, butthead2u wrote:

    Only the most die hard of gamers (losers) care ezboxbreaks, they are so close that the extended experience is what is going to make the difference and Sony will have a hard time competing with it on that level. More people are using the extended experience on a per hour basis on Microsoft's Xbox. As an investor I don't care who's is faster, I care who will make more money and that will be Microsoft hand over fist! Microsoft has Skype, Outlook and Windows all of which have hundreds of millions of users! Keep Microsoft cheap so I can buy more now! ;)

  • Report this Comment On October 20, 2013, at 2:36 PM, Bill49601 wrote:

    @ezboxbreaks, the 360 has only been out for 8 years, not 10. I am also in the game system repair business and I 100% agree with ezboxbreaks. Microsoft cut so many corners in making the 360s that they released a sub-standard game console. The 360 had a 64% fail rate and the Federal Government wanted to have Microsoft issue a recall if something wasn't done about it. This was Microsoft's back-door way of making money ...repair the console for $160 or buy a new one. So they gave a 3-year VERY limited warranty instead of issuing a recall. Microsoft already tried putting the screws to the public when they announced that XBox 1 wouldn't play rented or used games without paying a fee, and had to be connected 24/7 or it wouldnt be able to play ANY games. In my opinion, Microsoft has a very bad image to overcome in order to catch up with or even outsell Sony.

  • Report this Comment On October 20, 2013, at 4:10 PM, ShadowOfTheVoid wrote:

    There are two reasons the 360 beat the PS3 in America: 1) it had a one-year head start, 2) it cost a lot less. Even with those advantages, it couldn't beat the PS3 worldwide, though. In every region outside of North America, the PS3 was the clear sales leader. Europe is "PlayStation Land" and Xbox barely makes a dent in Japan. The XBO has none of the advantages the 360 did. It costs more than the PS4, and it doesn't have a head start to allow it lock in large numbers of players unopposed. The XBO might do okay in America and it'll probably improve its chances when and if it reaches price parity with the PS4, but at best it will be a 1:1 match throughout its life. But outside of America, the PS4 will be king. Microsoft is probably going to lose a good bit of the market share they picked up in Europe, and odds are it'll fail to hit the two million mark in Japan by time it goes out of production. This is Sony's ball game to lose.

  • Report this Comment On October 20, 2013, at 4:29 PM, moopert wrote:

    @ShadowOfTheVoid:

    Another reason is the red ring replacements. People buying a second, third, or fourth 360 artificially inflated the sales numbers.

  • Report this Comment On October 20, 2013, at 4:50 PM, Darkvoltinx wrote:

    Can we please just drop this Xbox one VS PS4 crap? just let people enjoy what they want without stuff having to be a competition. sigh its getting old

  • Report this Comment On October 20, 2013, at 4:51 PM, butthead2u wrote:

    Money is made in America, who cares if you don't win the rest, Apple makes most profits in USA. Rest of world will then follow. This is 3rd generation and MS will run away with it!

    Invest in Sony! How are their profits BTW?

  • Report this Comment On October 20, 2013, at 5:02 PM, chrismireya wrote:

    @ Bunnyking77:

    Correction. It took Motley Fool writers six months to realize something that was obvious ONLY to rabid Sony fanboys who are religiously devoted to their company and console.

    Those fanboys are weird enough to think that there is a "war" in which they must declare loyalty to Sony and spew hatred upon everyone of a different preference.

  • Report this Comment On October 20, 2013, at 5:11 PM, AznFlip wrote:

    Just from the naive comments you can already tell who the serious gamers are and who is not. Sony's PS3 had just as much of a fail rate as the XBOX 360. That's a fact! So anyone who uses the RROD as a reason for Microsofts supposedly bloated sales are full of crap. They both suffer from the same overheating problems. GTA 5 is the only reason PS3 sales beat out the 360's, period end of story. The 360 outsold every console in the US despite charging for xbox live. That right there tells you a lot. And it also tells you that despite it's problems and it's fees, the public was willing to grow with it. Why? Because bar none it gives you the better console gaming experience. The sales speak for itself and the sheer amount of titles speaks for itself. Metal Gear Solid is on XBOX for crying out loud. The Xbox won the last round and it's going to win the next round. $400 for a gaming machine only (with buggy online servers) or $500 for a gaming machine/entertainment machine with a camera that can read sign language and help the deaf among a host of other great things (and proven superior online experience)? Both are charging for that service by the way. I'll take the Xbox One anyday and twice on Sundays. Oh and the handicap community thank you too Microsoft...

  • Report this Comment On October 20, 2013, at 5:28 PM, butthead2u wrote:

    Tell me, how can Sony possibly win when Microsoft invests billions a year research alone that can find its way into the ecosystem? If you can honestly answer that, okay, but you can't!

  • Report this Comment On October 20, 2013, at 5:53 PM, Rich0037 wrote:

    There is no way the ps3 failed just as much as the 360. If you want to see facts just search it. I had a 360 break on me 3 times on 2 of them. I have one ps3 in 3 years it out lasted both 360s.

  • Report this Comment On October 20, 2013, at 6:05 PM, Armyguy1980 wrote:

    Arguing over a console is such a geeky, nerdy, broken glasses fixed with white tape conversation. Gaming is mainstream, arguing over your console of choice is just pathetic.

  • Report this Comment On October 20, 2013, at 6:10 PM, butthead2u wrote:

    Rich0037, of course the Xbox broke more, you hardly ever played the PS3 because everyone's using XBox! ;)

  • Report this Comment On October 20, 2013, at 10:29 PM, CharlesClarke3rd wrote:

    OMG! There are still idiots out there that buy a playstation. That is a clue to how bad our education system is. So many idiots.

  • Report this Comment On October 21, 2013, at 12:14 AM, ShadowOfTheVoid wrote:

    @AznFlip. Apparently, you haven't been paying attention these past 6 years. The original model 360 had an estimated failure rate — defined as a percentage of consoles that fail within the first two years of its life — of anywhere from 25-33%, whereas the PS3's failure rate was 10% and the Wii's was less than 3%. So, the 360 had a failure rate at least twice and perhaps as much as over three times than of the PS3. While more recent models do have a lower failure rate more in line with the norm for devices of this nature, the fact remains that the original model of the 360 had an unprecedented failure rate far beyond that of any other major system in history.

    That being said, I don't think the 360's sales figures are all that inflated from the failure rate. For most consumers, it was more cost-effective to send their 360 in to get repaired than to purchase a new one. I imagine the number of people who bought a brand new 360 at full price to replace one that broke is very low.

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