The Dumbest Thing About the Xbox One-vs.-PS4 Horse Race

Congratulations to the PlayStation 4 and the Xbox One; you're both winning this console battle. As bizarre as that sounds, it's the only way to read the latest press releases from Microsoft (NASDAQ: MSFT  ) and Sony (NYSE: SNE  ) regarding their competing gaming systems.

We're No. 1!
Research firm NPD just published video game sales data on the month of November, which included the launch of the two next-gen systems and the critical Black Friday rush. Sony took a look at the numbers and labeled its PS4 as "the top selling console" and "#1 in sales overall." Microsoft came to just about the same conclusion on its own system, calling the Xbox One "the fastest selling console on the market," which is quickly "outpacing the nearest competitor."

Of course, these statements aren't mutually exclusive. The PS4 won November overall, partially because it launched a week earlier. Meanwhile, the Xbox One sold more units during the nine days it was available in the month. But that's not a fair comparison either, as it's weighing Xbox One's first week against the PS4's second week, which was probably held back by low supply. Plus, the two devices were first introduced in a completely different set of markets. All of that gray area makes the horse race impossible to judge, and it lets both companies get away with claiming to be in the lead so far.

What we really know
But here's the thing: None of it matters. Demand is still comfortably ahead of supply for both devices. For that reason, early sales numbers tell us more about production capabilities and supply chains than they do about gamer preferences.

The only thing we know for a fact right now is that millions of consumers want a PlayStation 4, and millions want an Xbox One. That shouldn't be too surprising, given that it's been eight years since these two giants refreshed their consoles.

So when will there be enough information to crown one device champion over the other? Maybe not for years. Remember that the lead changed a few times during the prior generation, with Nintendo's Wii outperforming the PlayStation 3 and Xbox 360 at times, before stumbling near the end of the cycle. 

Still, once all of today's pent-up demand is satisfied over the next few months, the PS4 and Xbox One should begin selling at a steady sales pace that reflects the ongoing demand, giving us some useful points of comparison.

Until then, investors can be confident that the overall industry is the real winner here: It finally returned to sales growth on the software side in August, and on the hardware side last month. Despite the worries that gamers would abandon consoles in favor of tablets and smartphones, that doesn't appear to be happening: Sony and Microsoft helped push the video-game hardware market higher by 58% last month. December promises to be even better, and we won't need a photo finish to tell.

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  • Report this Comment On December 14, 2013, at 2:54 PM, Chevyisajoke wrote:

    Not to diss the author, but Microsoft and Sony are about dead even with worldwide sales right now. Except for one thing... Microsoft has about a third of the markets sony has....

    PS4: 2.1 mil in 32 markets

    XboxOne: 2.0 mil in 13 markets

    With 19 more markets PS4 only sold 0.1 mil more consoles.

  • Report this Comment On December 14, 2013, at 3:13 PM, 22account22 wrote:

    The winner is AMD they make the graphics cards and processors for both PS4 and Xbox One.

  • Report this Comment On December 14, 2013, at 4:00 PM, KenLuskin wrote:

    AMD CFO said CONSOLE Chip MARGINS will be INCREASING over next few quarters... up from mid teens to 20%

    CFO said 2014 total console sales will be about 40 MILLION.

    SEARCH for: Xbox One to hit shelves in China by September 2014

    http://www.techinasia.com/xbox-hit-shelves-china-september-2...

    SEARCH for : " Out of nowhere, China’s smart TV market explodes into the mainstream"

    http://thenextweb.com/asia/2013/10/16/out-of-nowhere-chinas-...

    “People now play with (their) TVs rather than just watch them,” Wang says.

    GAME CONSOLES will EXPLODE in China during the summer of 2014.

    Chinese authorities desperately need something to keep the average person from REVOLTING against the lack of personal freedoms.

    Allowing people to get more access to entertainment is the OPIATE for the MASSES!

    AMD shares will go thur the ROOF in 2014 and 2015!!

  • Report this Comment On December 14, 2013, at 4:12 PM, KenLuskin wrote:

    From 2007 to 2012 There were a total of 240 MILLION consoles sold.

    That is an average of 40 MILLION per year.

    China has had a ban on console sales since 2000, that is being lifted in 2014.

    China has about 1.4 Billion people.

    The top 20%, 280 million have a purchasing power equal to the average American.

    Therefore, China has a purchasing power for TV consoles that is similar to that of America.

    The HUGE pent up demand in China for TV consoles will increase worldwide demand by 50% to at least 60 million consoles in 2014.

    AMD will earn profits from every console sold in 2014 except the old PS3.

    Console chip sales will drive AMD earnings UP to at least $1 share in 2014.

    AMD will earn in NET profits about $20 on every console sold.

    Consoles with AMD chips or IP (Xbox360) will be at least 35 million in 2014.

    That is $700 MILLION in profits.

    AMD's high end Discrete GPU are sold out right now.

  • Report this Comment On December 14, 2013, at 4:24 PM, arnolda wrote:

    I have both and I can say I enjoy the Xbox one a lot more, as time went on the kinect has been more responsive to my commands and now I rarely have to repeat myself, the graphics difference are not noticeable to the naked eye, xbl is still far superior the ui is superior all apps load just as fast as ps4 but one of my favorite things is the ability to watch videos from my laptop or tablet to the Xbox one I'm talking local files here such as home videos and torrents with approx 2 seconds of loading almost instant actually faster than changing a TV channel something the ps4 has decided not to include.

    Now don't get me wrong ps4 is a great gaming machine but with civita or whatever its called that restricts pirated DVD and no streaming that's all it is in my opinion just a gaming machine, my advice spend the extra 100 dollars and get something that you'll enjoy and your family will to.

  • Report this Comment On December 14, 2013, at 5:18 PM, normgarry wrote:

    Both the PS3 and Xbox 360 have sold an equal number of units at 80,000,000. Neither system can "win", but we can all agree that NINTENDO IS A LOSER!

  • Report this Comment On December 14, 2013, at 5:19 PM, normgarry wrote:

    I enjoy my Xbox One more than PS4.

  • Report this Comment On December 14, 2013, at 8:16 PM, starflyer59 wrote:

    This whole battle of the consoles is stupid. If you like Xbox then get an xbox, if you like the ps4 then get a ps4. Go play games and enjoy life and stop whining.

  • Report this Comment On December 14, 2013, at 8:50 PM, VegasSmitty wrote:

    I use my XBox 1 80% of the time.

  • Report this Comment On December 14, 2013, at 9:49 PM, Vitabrits wrote:

    The PS4 also has not released in Japan, it's "home market".

  • Report this Comment On December 14, 2013, at 10:27 PM, Mtowne32 wrote:

    I got an Xbox One on the night of release. Grabbed Ryse and Assassins Creed that night. Have since picked up Forza 5 since then. I am very impressed with both the hardware and the games. The Kinect is much more responsive. Switching from games to tv is incredible. Knowing the way the 360 involved it's very encouraging to know where Microsoft can take this thing. I can't say anything for the PS4 because I don't have one and actually don't know anyone that got one but my brother (who also got a One) and I are loving the new Xbox...

  • Report this Comment On December 14, 2013, at 10:37 PM, crampedsultana wrote:

    I don't need a system that can sing, dance, and bake brownies. I wanted a gaming console. Period. Loving my PS4 to death: for me it was the better choice. And I don't have to have a creepy camera watching me and listening and keeping track of my heart-rate. $100 less and I got to keep my privacy.

  • Report this Comment On December 14, 2013, at 11:09 PM, Jdzspace wrote:

    why are people so ignorant? I don't understand it. yes, Sony had sold 2.1 million units world wide AS OF DECEMBER 3RD......as in 11 days ago.

    anyone who on December 14th says something stupid like "Sony only sold .1 million more consoles than Microsoft in 32 markets"

    really needs their head examined. because the truth is that Microsoft is in just as many markets right now as Sony, and their sales numbers of 2 million are 3 days old, compared to Sony's which is 11 days old.

    I'm sorry, it's just ignorance personified. get a clue people!

  • Report this Comment On December 15, 2013, at 12:09 AM, ChuyG wrote:

    Lot of xbox one fanboys here. Xbox one will not beat the PS4, deal with it xbox fan boys. First, the PS4 has the PS eye to compete with the xbox one kinect it almost do the same thing, but not as precise as the xbox one kinect. Also, PS eye is more cheaper, that explains a lot. I don't really care about those worthless features. I am not that lazy, But when it comes to the consoles itself, the PS4 will win. I am not lying just look both consoles specs. Right now the difference isn't much because the games that are right now weren't made especially for next gen. Wait some years and the difference is going to be very noticeable. It looks that microsoft is lying. Microsoft is saying that they are selling every xbox one they putting in the market. well that may explain why every store i go there lot of xbox one in stock, maybe that's another reason why they have almost a similar number than Sony. Sony can't handle the demand they have because it's vast. Only time will tell, but PS4 will win.

  • Report this Comment On December 15, 2013, at 12:11 AM, ShadowOfTheVoid wrote:

    The things is, all this hubbub about who sells more during the launch holiday is largely pointless, because those first few weeks are never indicative of how well a system will perform in the long run. Here's how many each system released since 2000 did for their launch holiday, according to NPD data:

    PS2: 1,087,000

    GameCube: 1,236,000

    Xbox: 1,422,000

    Xbox 360: 607,000

    PS3: 687,700

    Wii: 1,080,00

    Wii U: 880,000

    That's right. Both the GC and original Xbox had better launches than either the PS2 or the Wii and sold nearly double what either the 360 and PS3 sold. Even the Wii U had a better launch than the PS3 and 360. However, the sales curves of all these systems diverged sharply after that. Despite the strong launches, the GameCube and Xbox were steamrolled by the PS2, which launched a year ahead of them and had superior software support. Despite having a substantially poorer launch than the Xbox, the 360 has far outsold its predecessor, with at least 40 million vs. about 15 million. In fact, the 360 is on track to pass the Wii's lifetime sales in America. The PS3 had a better launch than the 360 despite a higher price and a poor selection of games, but it has since fallen well behind the 360 in the U.S. As we see, comparing launch sales is utterly pointless.

    What we can look at, though, is historical trends. What does history tell us about the Xbox and PlayStation brands as well as the habits of the three major regions (North America, Europe, and Japan) that could give us insight on what we could expect from the PS4 and XBO? First off, we do know that the Xbox brand does the majority of its business in North America. The original Xbox sold two thirds of the 24 million units sold during its lifetime in NA. Likewise, well over half of all 360s were sold in NA. But just because Xbox does most of its business in North America does mean that it's the region's brand of choice. On the contrary, America is highly mercenary, and the title of top-selling system has been held by more systems and more brands than any ever. Nintendo dominated in the late 80s & early 90s, though in 1994 the Genesis ended up taking the top spot for the year. Then the PS1 took the top spot, followed by the PS2. Then Nintendo took the top spot again for several years with the Wii, and finally the 360 surged ahead and has held the top spot in yearly sales since 2011.

    Either the PS4 or XBO will take the top spot in America for 2014, and it'll be competitive, but which one sells better will depend on various factors. Will the XBO's higher price hobble sales? Will supply still be an issue for the PS4 in the early months of next year? Will exclusives be enough to make a difference, and if so will more Americans and Canadians be drawn towards Titanfall and Halo 5 or more towards Infamous, Driveclub, and The Order 1886. Also, what of third-party titles? Will they sell better on PS4 or XBO? That will be a solid bellwether to determine which system sells more hardware, and it's worth noting that some of the big multiplat titles coming this spring are seeing the PS4 port being favored based on preorder indicators from various online retailers.

    Europe, meanwhile, has a clear preference for PlayStation. The PS1 was the first truly huge console in the region, selling more than the NES, SNES, Master System, and Mega Drive combined. The PS2 continued that success, and the system swamped the GameCube and Xbox. And while Sony lost a lot of market share in the seventh generation, the PS3 has long passed the 360 in lifetime sales in the region and is on track to pass the Wii, and if it does it will be three generations straight where Sony had the best-selling system. As Europe is essentially PlayStation country, it's pretty much a given that the PS4 will win there, though by how much remains to be seen. While the 360 did see MS expand their market share greatly, much of those sales come from the UK, which more closely mirrored the U.S. than continental Europe this past generation. It's likely that a disproportionate number of XBO sales in Europe will be in the UK. But without the advantages the 360 had (lower price, one-year head start), will we see Sony widen the gap between themselves and Microsoft in the region?

    As for Japan, it's no contest. Japanese gamers play Japanese games on Japanese hardware. Xbox has always sold exceptionally poor in Japan. In all likelihood, the XBO will place third, selling even fewer units than the Wii U. With less competition from Nintendo this time, Sony will expand their market share greatly.

    So, globally it's almost certain that the PS4 will be the sales leader. The only markets the XBO has a chance of coming in first is in North America and the UK, and even then its not certain whether with a higher price and without a yearlong head start if it can take first place in those markets. Meanwhile, the PS4 will certainly sweep continental Europe, Japan, and most of the rest of the world.

  • Report this Comment On December 15, 2013, at 12:48 AM, Bunnyking77 wrote:

    great story, I just want to give a shout out to the Wii U, a system that is getting devoured by the media because it didn't play the pay to win game with PR.

  • Report this Comment On December 15, 2013, at 4:02 PM, Ahlfs wrote:

    PS4 will come out on top in the end of this console war, i guarantee it! I buy consoles to play games not watch TV they have little boxes all over the place for $99 bucks if you want all that TV #$%$. The PS4 "IS" the better "Gaming" console as shown countless times of it running Faster, Cleaner and by far Prettier!

  • Report this Comment On December 15, 2013, at 5:56 PM, Allend406 wrote:

    Eventually sony is gonna start pulling away from xbox im suprised it has been this competetive with DRM reversal, higher price, kinnect, slighltly worse graphics, and the Xbones gaudy VCR look.

  • Report this Comment On December 15, 2013, at 10:37 PM, Sarentack wrote:

    We also have to understand a good portion of console sales is like the fashion queens, got to buy it now since its the hottest newest swag or trendy item there, like many of the phones and other gadgets, even though they got no desire to utilize the console or use it for much gaming if any.

    We went through this a few times in history, especially with the PS2.

    We can also say that the sales numbers could be heavily flawed to, I know some years back some stores were never included in sales numbers, I believe Wal-mart was one of the big kahunas on that list to not be included and its often an anti-xbox store since Nintendo and Sony sell their consoles out quick while Xbox will still be on the shelfs.

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