Xbox One’s ‘Titanfall’ and PS4’s ‘Infamous: Second Son’: The First Killer Games of the Eighth Generation?

Microsoft's (NASDAQ: MSFT  ) Xbox One and Sony's (NYSE: SNE  ) PS4 are only four months old, but that hasn't stopped gamers from closely following sales figures of both consoles on a weekly basis. According to the latest figures from Vgchartz, Sony is leading the eighth generation console race with 6.3 million PS4s sold, followed by Nintendo's (NASDAQOTH: NTDOY  ) 5.9 million Wii Us and Microsoft's 3.9 million Xbox Ones.

Sony climbed over the 6 million unit mark after the PS4's Japanese launch, but the Xbox One bounced back strongly after the launch of Electronic Arts' (NASDAQ: EA  ) Titanfall. Sony then struck back last week by launching Infamous: Second Son. Meanwhile, Nintendo's Wii U remains sidelined without any big exclusive titles on the horizon to match the recent releases.

Infamous: Second Son. (Source: Sony)

Will these two games help Sony and Microsoft leave Nintendo in the dust, or are they overrated games being propped up by hype? 

Microsoft and Nintendo start bundling titles and dropping prices
Before discussing the impact of Titanfall and Infamous: Second Son, we should take a look at some new bundling strategies and price declines among the three eighth generation consoles.

Microsoft, which is often criticized for pricing the Xbox One $100 higher than the PS4 at $499, initially bundled Titanfall with its console for $500, giving the $60 game away for free. Wal-Mart, Target, and Best Buy recently lowered the price on the console, bundled with Titanfall or Forza Motosport, to $449.99. Finally, customers reported that the Xbox One, without any bundled titles, could be temporarily bought for $399 -- the same price as a PS4 -- on Amazon (NASDAQ: AMZN  ) with a discount code. This means that Microsoft is now taking a big loss on every console sold, since a teardown by IHS estimates that the Xbox One costs $471 to manufacture.

Titanfall. (Source: Wikipedia)

Earlier this year, Nintendo's Wii U two-game bundle, which includes Super Mario Bros. U and Super Luigi U, was sold on eBay for $259 -- a $40 discount from its original price. Meanwhile, Nintendo piled on various bundles for the Wii U and 3DS in a clear bid to gain market share at the expense of margins. This is probably at least part of the reason Nintendo now expects an operating loss of 25 billion yen ($240 million) for the fiscal year.

Sony, on the other hand, didn't offer any discounts in its Infamous: Second Son bundle. The bundle, which costs $570, includes a copy of the game, an extra controller, and a one-year membership for PS Plus -- which also cost $570 if purchased separately.

These strategies indicate two things -- that Sony is comfortably pulling ahead of Microsoft and Nintendo, and that Microsoft is bundling Titanfall with the console in a desperate bid to boost sales figures. For example, the top two selling games of all time -- Wii Sports (81.9 million units) and Super Mario Bros. (40.2 million units) were originally bundled with the Wii and NES, making it difficult to tell how many titles were sold on a stand-alone basis.

Titanfall dominates the charts, but Infamous: Second Son is gaining ground
Titanfall's sales might have been helped by Microsoft's aggressive bundling strategy, but its popularity is undeniable.

The multiplayer shooter currently sits at the top of the weekly charts in the U.S. and Europe, with the Xbox One version of the game selling 902,010 copies for the week ending on March 15. Titanfall sales notably doubled week-over-week and temporarily claimed the number one spot on U.K. game charts. 70% of Titanfall sales in the U.K. came from sales of Microsoft's Titanfall bundle. The game has been well received by critics, scoring an 86% rating on review aggregator site Metacritic.

Sony's Infamous: Second Son, which was released on March 21, reportedly boosted PS4 hardware sales by 106% in the U.K. since the game's release. Infamous: Second Son hit number one in the U.K. game charts, knocking Titanfall down to third place behind Konami's (NYSE: KNM  ) Metal Gear Solid V: Ground Zeroes. Infamous: Second Son scored slightly lower than Titanfall with critics with a Metascore of 80%.

Although head-to-head global sales comparisons of the two games aren't available yet, Infamous: Second Son could be bad news for Microsoft and EA if sales trends in the U.K. turn out to be a microcosm of sales in Western markets.

Was Microsoft's sacrifice worth the additional sales?
Microsoft's willingness to cut $60 to $100 off the Xbox One's price a mere four months into its life cycle is troubling. The company clearly thinks that Titanfall, which is also available for Windows and the Xbox 360, is its best chance to catch up to the PS4.

Sony, on the other hand, didn't make any sacrifices and is still reaping the rewards of soaring Infamous: Second Son sales. Therefore, Microsoft investors should wait and see if Titanfall can maintain its momentum to see if its margin-sacrificing bundling strategy was worth it.

What do you think, fellow gamers? Is Microsoft doomed to trail behind Sony and Nintendo in the eighth generation console race? Let me know in the comments section below, and make sure to check out The Motley Fool's free guide to investing to learn more about stocks like Sony, Nintendo, and Microsoft.


Read/Post Comments (9) | Recommend This Article (3)

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 March 27, 2014, at 9:45 AM, Warmageddon96 wrote:

    Microsoft's decisions on selling the Xbox One for $390 or $400 seems good for now, but it will eventually realize that it will lose more than it is winning, making them raise the price of their console. Microsoft, with no doubt, will lose this battle. Let's just call it a Pyrrhic Victory. They think they are doing a smart move, but it will all just turn up on them. Sony is making an amazing job at keeping the prices low enough for them to make some money out of their console. Seems like Microsoft is desperate, and those who become desperate never have a good ending. Go Sony!!!

  • Report this Comment On March 27, 2014, at 12:00 PM, TelsaRowe wrote:

    I dont think msft has brought out the big guns yet. The Kinect Sports Rivals game could be a real game changer imho. As a game sector investor and owner of both the X1 and Ps4 I can tell you that most of the Ps4 claims are scams. The graphics between the systems are unnoticable on a television smaller than 72". People did NOT buy the ps4 because of "superior" graphics. They bought it because its $100 cheaper than the X1. Any claim to the contrary is a lie.

    I like to look at pre-orders for the biggest cross platform games. Right now that game is Destiny. Pre-orders between the two systems are very close. Strange for a console that has supposedly sold "millions" more units. I believe mfst may have closed the gap (if there was indeed one to begin with) with sony this month with Titanfall within .5M units. Kinect Sports Rivals is where the X1 probably pulls ahead globally.

  • Report this Comment On March 27, 2014, at 2:04 PM, TMFSunLion wrote:

    I agree with the point about Kinect Sports -- there is a chance that it can capture some of that Wii Sports magic again. Good point about the graphics. I wrote about the graphics comparison in an earlier piece:

    http://www.fool.com/investing/general/2014/02/20/xbox-one-vs...

    Cheers,

    Leo

  • Report this Comment On March 27, 2014, at 3:11 PM, wookietim wrote:

    I don't see the Xbox One price cuts as that troubling. If anything, I see it as rather heartening to see MS going to great lengths to push it's hardware - it means that they are in this for the long haul and are willing to do what it takes to be competitive.

  • Report this Comment On March 27, 2014, at 6:40 PM, hardrockr1979 wrote:

    Microsoft is a follower, not an innovator. They simply make their "own" versions of everything from software, to MP3, to gaming, to phones, to everything else they do. Everything they do is a knock-off of someone else's idea.

  • Report this Comment On March 28, 2014, at 10:02 AM, NoPityMe wrote:

    I think it is money well spent for Microsoft because they need the number of Xbox Ones sold to be enough that developers will make programs for it. Microsoft said they will announce sales numbers quarterly so they want to make a positive announcement. Companies pay 4 million for a super bowl ad but Microsoft can spend 4 million helping to sell 80,000 Xbox ones if they lose $50.00 on each one.

    But more importantly, Microsoft's Xbox One market is not just twitchy fingered adolescent gamers. There are games and then there is gamification. Microsoft could gamify education. What if every school decided they needed an Xbox One for teaching? The new Kinect will work better for toddlers and you can stand closer and it is more accurate so it will work better in educational scenarios. What if every board room across the world decided they needed an Xbox One to hold Skype meetings? I use Xbox Music on my Android phone and the selection of music is great.

  • Report this Comment On March 29, 2014, at 12:29 PM, hydn wrote:

    Its downhill from here for Xbox. I kept testing both consoles and wasn't going to make a purchase decision till after Titanfall and Infamous.

    You see I'm a PC gamer and games like ARMA 2 & 3 are my calling. But its pretty cool to take a break woth games like COD and BF3 (especially BF3). A comparison of Amazon.com customer reviews shows that Infamous is more liked and rightly so. You get more 'gaming' per dollar spent.

    Once I played Titanfall I realize its very empty game. You basically running in circles and shoot each other with not much replay value after a few months at most. It does FPS well, better than most, but really once you get used to the 'giants', futuristic gimics and levelng up what is Titanfall beyond and that? So when other COD titles follow on Xbox and PS, players just will move on to those squmish fps games.

    So this morning I picked up my PS4 with extra controller and Battlefield 4, Infamous, ShadowFall and Knack (to play with wifey).

    I'm sure I will own an Xbox 1 eventually but I am confident the price will be lower again by the 12 month mark. Where as with PS4 they are still selling new at some places for $500 and $450. Hopefully more people find that its $399 on Amazon for the last 2 weeks and stop wasting money.

    Naturally Sony had more roots in hardware manufacturing and thus why superior 'gaming' specs for less cost to build. MS has not delivered enough on the living room aspect of Xbox and should have probably stuck with a 'gaming' focused box as well. Leaving the living room as an Xbox 1 future add on.

  • Report this Comment On March 30, 2014, at 6:50 AM, Exapane wrote:

    I'm getting sick of people treating Vgchartz as a reliable source. They make the numbers up. There is no possible way to know how much a game has sold without the devs/publisher actually saying so.

  • Report this Comment On April 02, 2014, at 4:33 AM, PlipPlopPow wrote:

    Microsoft should have always been selling the Xbox1 at a loss. Turns out Sony has been doing it the whole time with the PS4. The loss of $71 per system for Microsoft ( if they price it at $400) will eventually even itself out through sales of games, and content. Sony sold the PS3 at a loss of $300 per system last gen.

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