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Microsoft and Sony Are Both Winning the Console War

By Demitri Kalogeropoulos – Mar 17, 2014 at 8:30PM

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Despite all of the drama in the press, there is plenty of room for both consoles to succeed.

Diehard fans of Microsoft's (MSFT -0.54%) Xbox One and of Sony's (SONY -2.16%) PlayStation 4 each likely found something to hate about the latest sales results for the month of February. Unfortunately for those fans, the report released last week by research firm NPD describes an industry that's improving all around, with no knockout punch of one console over the other. In fact, both Microsoft and Sony have a legitimate claim at "winning" the console battle last month.

Spiking hardware sales
The Xbox One nabbed the overall revenue crown. According to NPD, Microsoft grossed slightly more in sales than Sony could manage. Microsoft confirmed that it sold 258,000 units of its new device in February, which was 61% ahead of where the prior generation Xbox was tracking at this point in its lifecycle. So it isn't just marketing spin when the tech giant describes this generation's launch as the "most successful" one in Xbox history.

Still, that slight victory over Sony was made possible by the $100 price disparity between the two systems. Sony, whose device is cheaper, actually sold more units of its PS4 last month. That result helped push its installed base lead slightly higher, giving it an important win to celebrate as well.

The Japanese tech giant didn't provide official sales numbers for February, but it did trumpet the new NPD data to its Twitter followers.

The overall industry was the real winner, though. NPD's estimate of the video game market, which doesn't include digital software revenue, grew by a solid 9% last month to $890 million as hardware sales spiked 42% above the prior year period and "triple digits" above January's result.

Exclusive games on tap
All of this success came in a month that didn't see much in terms of splashy next-gen game releases. Activision Blizzard's (NASDAQ: ATVI) Call of Duty: Ghosts title, which has been out since last year, continued to dominate the sales chart: Ghosts took the top spot for the fourth month in a row. Newcomers on the top 10 list included The Lego Movie Video Game and Nintendo's (NASDAQOTH: NTDOY) Bravely Default for the 3DS.

But March should be an entirely different story as major new releases shake up the hardware sales results. Microsoft's next-gen shooter Titanfall, one of this year's most anticipated video games, launched last week and is sure to help move more Xbox consoles. Meanwhile, Sony can look forward to its own exclusive game boosting PS4 sales: Infamous: Second Son hits stores on March 21.

Everybody wins
Those launches make it very likely that we'll be hearing about more record growth in the industry when NPD releases its video game sales data for March next month. And the trend will probably be just as promising for Microsoft as it is for Sony. While the Xbox One vs. PS4 battle sounds dramatic, this isn't a zero-sum game. Both consoles are selling extremely well at the early stages of this generation, and there is no reason why they can't both succeed.

Demitrios Kalogeropoulos owns shares of Activision Blizzard. The Motley Fool recommends Activision Blizzard. The Motley Fool owns shares of Activision Blizzard and Microsoft. 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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