Sony Leverages the PS4 to Sell More PS Vitas

Sony strategically leverages the PS4 to sell more PS Vitas through its Remote Play feature.

Jan 6, 2014 at 1:00PM

Fans and investors of next-generation video game consoles are fixated on which console will win out and produce the highest number of sales. Very limited sales information is currently available, but it appears that Microsoft's (NASDAQ:MSFT) Xbox One and Sony's (NYSE:SNE) PlayStation 4 are in a dead heat for the coveted top console spot. The limited sales figures reported at this time put the PS4 at 2.1 million sales in the 18 days following its release and the Xbox One at 2 million sales in the two weeks following its release.

While it's fun to speculate which company will win out in the next-generation console contest, investors need to keep in mind that console sales need to lead to profits. The company that can walk away with the greatest net profit from the sale of gaming consoles and accessories will be the true winner in the end. Sony may have strategically beat Microsoft in the revenue game by marketing the PS Vita as a companion device to the PS4.

The PS Vita is not a new device by any means, but the handheld gaming platform offers a new feature: PS4 Remote Play. This feature allows users to connect and play PS4 games on the PS Vita. Recent reports have indicated that PS Vita sales rose by 68% after the PS4 launch and 65% in the following week. Sony has indicated strong sales of the PS Vita following the launch of a marketing campaign that highlights the PS Vita's PS4 Remote Play and stand-alone features.

Sony is beating Microsoft to the punch by leveraging the PS4 to sell additional PS Vita devices. The company's marketing of two collaborative gaming devices should help boost sales in the third quarter of 2013. Sony needs to improve company sales: it reported a disappointing 9% decrease in sales in the second quarter of 2013, as compared to the same quarter of last year.

Investors need to keep a close eye on Sony's profitability. The company reported a second quarter loss of of $197 million. Look for sales of the PS4 and PS Vita to help push the company back into profitability.

Games help drive PS Vita sales
Gamers are thrilled about the PS Vita's ability to play powerful PS4 games such as Activision Blizzard's (NASDAQ: ATVI) Call of Duty: Ghosts. Popular game franchises such as Call of Duty will likely be the main driver for the continued sale of PS Vitas. Never before have gamers had the ability to play such powerful and resource-intensive games on a handheld gaming device.

Activision Publishing is showing excellent growth. The company reported revenue of $320 million in the third quarter of 2013, which is a 14% increase as compared to revenue reported in the third quarter of 2012. These strong sales are needed to help prop up Activision Blizzard, which reported declining revenue in the last quarter. Activision Blizzard reported revenue of $657 million in the third quarter of 2013, which is down from $751 million in the third quarter of 2012.

The recent release of the Call of Duty: Ghosts should help expand revenue for the company. The game franchise has a very loyal following that will continue to purchase game expansions throughout the year, leading to more sales down the line. Fourth-quarter sales are going to be a key indicator for investors to determine whether or not the company can expand its revenue through its latest game releases.

Xbox One's Kinect
Microsoft has differentiated the Xbox One from the PS4 by adding features such as the new version of the Xbox Kinect. The Kinect allows users to interact with the console using voice activation and body motions. This is a great feature for users that are looking for a more interactive game environment or the ability to control the console via voice commands.

The downside of Microsoft's decision to include Kinect in the Xbox One is that it is a contributing factor for the high retail price of $499.99, which is $100 more than Sony's PS4. Microsoft will likely lose out on sales from budget-conscious gamers, though the true effect of pricing will not be known until more elaborate sales data becomes available.

Microsoft has shown excellent growth. The company reported revenue of $18.5 billion in the first quarter of 2014, which is a 16% increase in revenue as compared to $16 billion reported in the first quarter of 2013. Investors need to keep an eye out for a boost in revenue in second quarter sales due to the launch of the Xbox One.

The extra revenue generated by Xbox One consoles should help pay for the development of the console and Microsoft's $700 million investment in data centers to power the Xbox One and Office 365. Microsoft has proven that the company is profitable with a reported net income of $5.2 billion in the first quarter of 2014. Investors should look for the sale of Xbox One consoles to help boost company profits and help reinvest in new technologies.

The bottom line
Sony wins points for strategically leveraging the PS4 to help sell more Vita handhelds. The additional sales of the PS Vita will help the company to generate more revenue through the PS4 launch. Sony may win out this time, as not only did it release a next-generation gaming console but it also boosted sales for an additional gaming platform.

Start 2014 off with serious growth
They said it couldn’t be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he’s ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen 6 picks for ultimate growth instantly, because he’s making this premium report free for you today. Click here now for access.

Ryan Sullivan has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers