Is Sony’s PS4 Losing Ground to the Xbox One and Wii U in the Console Sales Battle?

Sony’s PS4 numbers aren’t as strong as they seem. Although the eighth generation console is currently the top selling eighth generation console, it could soon lose ground to Nintendo’s Wii U in Japan and Microsoft’s Xbox One in the U.S.

Mar 17, 2014 at 10:18AM

Headlines last month all suggested that Sony's (NYSE:SNE) PS4, which recently hit 6.1 million units on a strong Japanese launch, was outselling Nintendo's (NASDAQOTH:NTDOY) Wii U and Microsoft's (NASDAQ:MSFT) Xbox One by a healthy margin.

However, recent numbers from Japan and the U.S. strongly suggest that it's not too late for Nintendo and Microsoft to mount a comeback. In Japan, Sony actually sold fewer PS4 units than the Wii U during its first three weeks on the market, according to Japanese research firm Media Create. Meanwhile, new NPD numbers in the U.S. indicate that the Xbox One is catching up quickly to the PS4 despite costing $100 more.


(Source: Sony)

A second chance for Nintendo?
Nintendo is frequently criticized for its poor support of the Wii U after its lackluster launch in November 2012. The ill-advised naming and marketing of the console, the confusing form factor, and the lack of strong first- or third-party titles all took their toll on sales. This led to Nintendo slashing its Wii U sales forecasts for 2014 by nearly 70%.

However, one market that Nintendo understands better than either Sony or Microsoft is the Japanese gaming market. Japanese gamers love party games, dating sims, and monster training games -- all niche genres that Nintendo excels at with its handheld 3DS, currently the best-selling console of this generation with 43.4 million units sold.

When we compare the number of Wii U units sold in its first three weeks on the Japanese market (Dec. 8-29, 2012) to the PS4's performance over the past three weeks, Sony's problems become crystal clear:


Wii U units sold

PS4 units sold

Week 1



Week 2



Week 3



Total sales



Source: Media Create.

Therefore, the PS4's "strong" Japanese launch, which pushed it over the 6 million mark, was actually much weaker than the Wii U's launch. Although PS4 sales in the first week came in slightly higher than Wii U sales, the huge 79% drop the following week suggests that the console is having trouble winning over audiences in Japan.

This could mean that Nintendo's Wii U still has a chance to catch up to the PS4 with stronger exclusive titles such as Bayonetta 2, Hyrule Warriors, and X throughout 2014. However, gamers might just be holding off on purchasing the PS4 until Konami's (NYSE:KNM) Metal Gear Solid V: Ground Zeroes PS4 bundle arrives on March 20.

PS4 barely edges past the Xbox One in the U.S.
Meanwhile, new data from research firm NPD and Microsoft suggests that the Xbox One is catching up to the PS4 in the U.S. Microsoft just reported that it sold 258,000 Xbox One units in February, 61% higher than sales of its seventh generation Xbox 360.

NPD suggests that those numbers are equivalent to 90% of PS4 sales during the same time, a huge improvement from last month, when the PS4 outsold the Xbox One by nearly two to one. That big jump in sales was widely attributed to the eagerly anticipated release of Electronic Arts' (NASDAQ:EA) Titanfall on March 11 for the Xbox One and Windows.

The first-person multiplayer shooter will also be released for the Xbox 360 on March 25. Microsoft unveiled a $500 Titanfall bundle across multiple markets prior to the game's release, essentially giving away the $60 game for free.


Microsoft's Titanfall bundle. (Source: Microsoft)

Titanfall has been well received critically with an 86% rating at review aggregator site Metacritic, and could hit sales of 2.5 million units (half on the Xbox One) between March 11 and the end of the month, according to Sterne Agee analyst Arvind Bhatia. Those numbers suggest that the Xbox One could actually outsell the PS4 in the U.S. in March if Titanfall is a hit.

However, neither EA nor Microsoft has announced any sales figures for Titanfall. By comparison, Take-Two (NASDAQ: TTWO) was quick to boast that GTA V hit $1 billion in sales (nearly 17 million copies) to customers within three days last September. Activision Blizzard (NASDAQ: ATVI) also announced $1 billion in Call of Duty: Ghosts sales within its first 24 hours on the market, but that figure was actually the initial number sold to retailers, and not to customers.

Therefore, it's a little troubling that EA and Microsoft have kept quiet regarding Titanfall's initial sales figures nearly a week after its launch, but both companies could just be waiting for the title to hit the Xbox 360 before reporting concrete sales figures.

The bottom line
These recent developments in Japan and the U.S. reinforce a key point I made in a previous article -- that although Sony has won the early battles of the eighth generation console race, the war is far from over.

If Sony fails to gain traction in Japan, which is widely considered to be a microcosm of Asian gaming, it could lead to Nintendo's Wii U gaining market share on the back of its robust 3DS sales. If Titanfall is a bigger than expected exclusive hit, Sony's PS4 could experience an unexpected slowdown in Western markets, since many of its top launch titles (Call of Duty: Ghosts, Assassin's Creed IV: Black Flag, Battlefield 4) can also be found on the Xbox One.

Investors should note that it's far too early to call a winner or loser for the eighth generation. The seventh generation concluded with 101 million original Wiis, 81.1 million Xbox 360s, and 82.5 million PlayStation 3s sold -- which means that the Wii U, Xbox One, and PS4 still have a lot of additional gamers to woo before one can be definitively proclaimed the victor or loser.

Welcome to the next level, gamer
Want to profit from the three-way eighth generation console battle between Sony, Nintendo, and Microsoft? The Motley Fool is offering a new special report, an essential guide to investing, which includes access to top stocks to buy now. Click here to get your free copy today to see if Sony, Microsoft, or Nintendo made the cut.

Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Activision Blizzard and Take-Two Interactive. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information