Xbox One's Biggest Game Can't Push It Above PlayStation 4

March saw the release of the much-hyped Titanfall on Xbox One, but Sony's PlayStation 4 still emerged victorious. What does this mean for Microsoft's position in the console wars?

Apr 21, 2014 at 1:05PM

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March didn't provide the explosive Xbox One sales that Microsoft (NASDAQ:MSFT) was expecting. The latest leaks from NPD Group's sales tracking suggest that Sony's (NYSE:SNE) PlayStation 4 was, once again, the best selling console in North America. The news that Sony increased its sales lead in a month that was supposed to be huge for the Xbox One provides a valuable indicator on the state of the console wars.

Xbox One saw the release of Titanfall from publisher Electronic Arts (NASDAQ:EA), but the game failed to push the hardware needle in a meaningful way. Given the level of hype surrounding the game, and the extent to which it was positioned as Xbox One's major system-seller, this is a big deal. What does the latest North American sales data mean for the future of the Xbox One and the console war?

PS4 wins hardware, Titanfall wins software
After the leak of NPD Group's tracking data, Microsoft confirmed that it had sold approximately 311,000 Xbox One units in March. Estimates place PS4 sales for the month at approximately 370,000. The gap between the two console's respective sales performances might not be particularly noteworthy otherwise, however, March had been put forth as the month in which Xbox One had a legitimate shot at reversing PlayStation 4's momentum advantage.

Titanfall was still the best-selling software for the month, edging out PS4 exclusive Infamous: Second Son for the No. 1 spot. It's worth noting that Titanfall's sales came across two platforms (the other being PC), while Infamous was only available on Sony's newest console. That the PS4 game was able to claim the second-place spot in a month that also saw the release of games like Dark Souls II, South Park: The Stick of Truth, and Metal Gear Solid 5: Ground Zeroes across multiple platforms is evidence that there is a strong demand for new software on the platform.

Titanfall fails to provide a meaningful boost
Some analysts have pointed to a lack of concrete Titanfall sales PR from Microsoft and EA as an indication that the game is falling short of expectations. Whether or not that's the case, it's true that companies often celebrate great numbers by releasing units-sold or dollars-generated figures. Titanfall's spot atop the software charts is an indication that it put up respectable numbers, but it looks like the game will not shape the console generation in the way that Microsoft and EA had hoped.

Titanfall Angel City


North American Xbox One sales stood at approximately 258,000 units for the month of February. Considering that March saw the release of one of Xbox One's biggest games, a bundle that included the title at no additional charge, and that a number of retailers offered additional discounts on the system, the sales growth from the preceding month is not particularly impressive. This is especially true given the fact that March sales tracking includes three additional days compared to February.

Are leaks of NPD data reliable?
The news that PS4 had outsold Xbox One in March prompted some analysts and industry watchers to question whether NPD Group data was reliable, as the sales tracker does not incorporate data from Wal-Mart in its estimates, and its retailer sample size is somewhat small given the scope of the industry. That being said, NPD's numbers are generally considered reliable. The group may not offer exact sales data, but it provides a valid snapshot of sales trends. There's a reason why many of the gaming industry's biggest companies pay good money for the figures.

How big is PlayStation 4's North American lead?
While PlayStation 4's repeated monthly sales victories have become the big story, the sales gap in North America is actually quite small. Adding up available sales figures for both consoles brings the PS4's total to approximately 2.91 million units, while Xbox One sales stand at approximately 2.53 million units.

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Viewed in isolation, the difference between these figures is hardly substantial. The picture starts to change when incorporating European sales and considering the results of the last generation's console battle. PS4 currently enjoys a substantial momentum advantage in Europe, but Microsoft's Xbox 360 enjoyed a huge sales lead over Sony's PlayStation 3 in North America in the last console cycle. So, while the Xbox One is selling reasonably well given its price, it's tough to spin the situation as a win for Microsoft.

What's next for Xbox One? 
With the release of Titanfall, the Xbox One has fired one of its biggest guns, but has been unable to put a dent in the lead PlayStation 4 has built. The big takeaway from the opening rounds of the latest console battle between Sony and Microsoft is the importance of price. Microsoft lost support in its two biggest territories by pricing its console above the competition. Now, the company must dig its way out of the hole it created by improving public value perception of the Xbox One. Otherwise, Sony may run away with the console race.

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Keith Noonan has no position in any stocks mentioned. The Motley Fool owns shares of 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.

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