The PlayStation 4 Launch Has Set the Bar

There's officially nowhere to not be playing games. My phone, my computer, my TV, my tablet. Heck, I can even throw a football at my son -- though not really "to" him, since he's so young -- in my own backyard. The breadth of options means that each new game and gaming system needs to step it up if it wants to succeed, and Sony's (NYSE: SNE  ) launch of the PlayStation 4 was indeed a step up.

The company sold over a million units in the first 24 hours, beating out its PlayStation 3 launch, which was marred by missteps and delays. While this launch wasn't flawless, it did set a high bar for Microsoft (NASDAQ: MSFT  ) to clear with its new -- and $100 more expensive -- Xbox One, which launches at the end of the week.

(On a vaguely related side note, during the same period of time that Sony was raking in $400 million or so, Airbus and Boeing got $100 billion in preorders at the Dubai Airshow. Scale is a funny thing, isn't it?)

The PlayStation 4's stumbles
While things went well for the launch in general, Sony did receive complaints that some machines weren't functioning. These consoles displayed a blinking blue light, which indicated problems with the system, and required replacement parts or returns for customers. The issue is similar in nature and effect to the Xbox 360's "Red Ring of Death," which indicated by flashing lights on the console that something in the system had failed.

Right now, the problem seems to be much more limited than Xbox 360's issue was. Some surveys in 2009 indicated that more than 50% of machines were failing. Microsoft managed the problem and the most recent survey has Xbox 360 failure rates below 10%, in line with the PlayStation 3.

Even a small percentage of failures -- Sony estimates 0.4% -- makes for bad press, and poor reviews are starting to pile up. That's unlikely to affect the future of the box, but the next round of purchases will likely give the market a better feel. Especially since PlayStation 4s aren't going to be back in stores until after the Xbox One launch.

Microsoft returns fire
The Xbox One comes out on Nov. 22, and Microsoft is hoping for a blowout. The company lost the early PR war, with Sony focusing on the availability of used games for its machine and its lower barrier to independent game development. Since then, Microsoft has changed its stance on used games, and has lined up an impressive set of launch-day titles.

Recently, the line between the two systems has seemingly been drawn on design philosophy, not execution. Microsoft has touted the Xbox One as an entertainment device, meant to be the center of the living room and used for games, TV, movies, and more. Meanwhile Sony has doubled down on the gaming aspect of the PlayStation 4, focusing on its power, flexibility, and performance.

In the end, it seems likely that both companies will win, just as they did with the last generation of consoles. Sure, the Nintendo Wii sold more than both of them last time around, and there will always be factions of fans on both sides, but ultimately neither console is going to be a dud. The biggest winner is probably GameStop, a company that's been on the ropes for years. The availability of used games and the hype associated with the new consoles should keep it running like a champ -- but that's for another article.

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