Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Sony's Gaming Division Is Off to a Great Start in 2017

By John Ballard - Apr 26, 2017 at 8:22AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

As Microsoft prepares to launch the most powerful gaming console ever made, Sony retains an important advantage.

Sony's ( SONY 0.60% ) gaming division has hit the ground running in the first three months of 2017. Since January, Sony's PS4 gaming console has had a steady stream of quality game releases, which has to make PS4 owners very happy. 

As of April 17, 37 games released for Sony's PlayStation 4 (PS4) console this year had a Metacritic score of 75 or better. This more than doubles Microsoft ( MSFT -0.11% ) Xbox One's 18 games with the same scores. 

Sony Playstation 4 video game controller

Sony is winning the current console war against Microsoft. IMAGE SOURCE: PIXABAY. 

Since the 2013 launch of both consoles, Sony's PS4 has an even bigger lead with 367 games receiving a Metacritic score of at least 75 compared to only 230 for Microsoft's Xbox One.

Sony's superior game catalogue is an important advantage

Given the greater breadth of quality games available on PS4 relative to Xbox One, it's not surprising that estimates indicate Sony has outsold Microsoft in console unit sales two-to-one in the current console cycle.

A better game catalogue could prove an extremely important advantage for Sony later in the year when Microsoft launches what some are calling a true next-generation gaming machine. The console code-named "Scorpio" will feature more graphics capability over Xbox One in order to play games in 4K resolution at a smooth frame rate of 60 frames per second. It will be the most powerful console ever made, bringing high-end PC gaming to console gamers.

In fall 2016, Sony launched its own console upgrade with the PS4 Pro, which provided more power to run games on 4K displays. But given Scorpio's 2017 launch date, Microsoft will be packing the new console with the latest technology, which will provide significantly more graphics power to gamers than the PS4 Pro.

On top of the added computing horsepower, Scorpio will also feature a 4K Blu-ray player, making it the first true 4K console.

The console war is about games

However, history has shown that the best technology doesn't always win. There have been consoles with great technology under the hood that have failed to gain traction on the market mainly because of a lack of great games available for them.

For example, the original Xbox in 2001 was technologically superior to Sony's PS2. Xbox featured a faster processor and was also the first console featuring broadband internet connectivity, whereas the PS2 used a dial-up connection.

But Microsoft failed to win that console war because of an inferior game catalogue. 

Why does Sony keep winning?

There seems to be something different between the two companies' approaches that allows Sony to keep pumping out about twice as many quality games as Microsoft cycle after cycle. 

First, Sony has been more focused on supporting independent developers. The company has a very consistent track record of delivering a wide breadth of high-quality titles mixed with independently developed games that also receive high praise from critics.

A second reason is Sony's expertise in consumer electronics. Sony is purely interested in delivering a great device to play games and it has outsold Microsoft in every console war.

On the other side of the console war, Microsoft seems to be more focused on marketing Xbox as another media device for your living room, especially a device to keep people connected to the Windows ecosystem.

E3 2017 is an opportunity, but will Microsoft capitalize?

Since the Xbox One was announced at E3 2013 (the Electronic Entertainment Expo), Microsoft has had to play defense. The Xbox One was $100 more expensive than PS4 at launch, and Microsoft made a huge PR blunder by initially announcing that used games would be blocked on its new console. Both announcements earned a cold shoulder from gamers who like buying used games to save money.

Yet again, at E3 2016, Sony upstaged Microsoft by remembering who its customers are -- gamers. While Microsoft sent executives out on the stage to talk to the audience about the business side of gaming, Sony focused on showing trailers and footage of game after game after game.

The annual E3 event in Los Angeles is the Woodstock of the video game industry. Video game enthusiasts attend E3 every June to see new games, and that's what Sony delivers. As a result, Sony gets high praise from the gamer community, while Microsoft receives criticism.

With a flashy new console arriving by the 2017 holiday season, Microsoft could dominate E3 2017 when it unveils Scorpio.  To do so, Microsoft should leave the industry side of things to reporters and show gamers endless footage of games running on the new Scorpio machine.

Sony is winning because it has a better selection of games; it's that simple. Microsoft will not beat Sony with better graphics power. Technology is a commodity. At some point, Sony will unleash the PS5, which will likely have better graphics capability than Xbox Scorpio. Unless Microsoft closes the gap with Sony's lead in game development, Sony will continue to lead the console war.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
$322.66 (-0.11%) $0.35
Sony Corporation Stock Quote
Sony Corporation
$120.73 (0.60%) $0.71

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.