Why the PlayStation 4 Triumphed Over the Xbox One

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Sony has unquestionably won the latest round in the console wars. As of this week, the PS4 has officially sold 102.8 million units. That’s significantly more than the PS3 (87.4M units), and there’s still a full year to go in the PS4’s life cycle. The PS4 has now sold more units than the original PlayStation and is the second-highest selling console of all time — far behind the PS2, at ~155M units.

What’s striking about this situation is how unexpected it was back in 2012. Coming off the Xbox 360, Microsoft was flying high. Where the original Xbox had been a rounding error compared with the PS2’s sales figures, the Xbox 360 had nearly tied things up with Sony. Both consoles had weathered their own respective disasters. Sony took enormous losses early in the PS3’s life cycle when the hardware was selling for much less than it cost to produce. Microsoft had the early unreliability and problems of the Red Ring of Death. Both platforms had expanded to copy the Wii’s push into motion controls. Microsoft had Kinect, while Sony had the PlayStation Move — or, as I liked to call it, the PS Wii.

Today, the Xbox One has a fraction of the PS4’s sales — an estimated 43.6M systems, according to VGChartz. We don’t know the actual number, because Microsoft won’t disclose it, but all reports and estimates suggest that the Xbox console ecosystem is less than half the size of Sony’s. So what happened?

There are several reasons why Sony took and kept an early lead. The most obvious reason is price — at debut, the Xbox One was a $500 system, compared with $400 for the PS4. That extra $100 paid for Kinect 2, an updated version of Microsoft’s Project Natal (aka Kinect, the first-generation peripheral for Xbox One). Price is the first place to look for an explanation for the PS4’s early and sustained sales momentum because Microsoft was asking gamers to pay 1.25x more for its comparable console.

Performance was another factor. The Sony PS4 wasn’t just less expensive — it was faster. There were several high-profile early launches that ran better on PS4, while games running better on Xbox One was a fairly rare event. The gaps weren’t always that large, but if you know that games are going to run 5-8 percent better on a less expensive platform, why wouldn’t you choose that system?

But in my own opinion, what hurt the Xbox OneSEEAMAZON_ET_135 See Amazon ET commerce the most wasn’t its price or its performance. Higher prices aren’t intrinsically bad if a platform can justify the cost. The performance gap was noticeable in some cases, but it could have been ameliorated by a unique, interesting experience. Microsoft, to its credit, absolutely wanted to shoot for the moon. Microsoft catastrophically misunderstood its own market.

A Difference in Vision

On May 21, 2013, Microsoft unveiled the Xbox One, a console with advanced multimedia integration, and the ability to juggle multiple video streams at once. Microsoft wanted to talk about its plans for multimedia content, including a Halo TV series with Steven Spielberg, cloud integration features, and Skype integration. Microsoft wanted to talk about how you’d use Kinect for video conferencing or to check which actor was in a movie without pausing playback.

Gamers, however, wanted to talk about how the console’s always-online connectivity would work. Gamers wanted to discuss how Kinect was always listening for your voice, and about patents Microsoft had taken out allowing Kinect to monitor how many people were watching a movie, so you could be charged more if someone walked into the room halfway through. As 2013 turned, the situation worsened. Microsoft’s vision for family game sharing — a genuinely requested feature — came with enormous strings attached. Consoles had to be always-online or able to connect every 24 hours at the very least in order to retain library access.

Microsoft wanted to talk about its plans for a multimedia empire and its vision of the Xbox One as the central multimedia device of the future. Gamers wanted to talk about games. Microsoft wanted to talk about how we’d use Kinect as the central interface for all our digital products. Gamers didn’t want to pay $100 over the price of the PS4SEEAMAZON_ET_135 See Amazon ET commerce for a product Microsoft could use to spy on them. Why so many people have decided they’re fine paying Amazon and Google to sell them the equivalent is beyond me, but in 2013, people were pissed about Kinect 2. E3 2013 did little to help.

I was virtually certain Microsoft would have to change its stance once I saw company representatives claim serving US troops without access to online services would have to be content with an Xbox 360 if they wanted to game while on deployment. Either that or buy a PS4. Indeed, this proved to be the final straw.

This went over exactly as well as you think it did.

Microsoft reversed course on the always-online idea, even if they nuked family sharing in the process. Eventually, they reversed course on the Kinect mandatory integration as well. When they built the Xbox One X, they even flipped the performance differential. Today, the Xbox One X is the most powerful console you can buy. It’s faster than the PS4 Pro. That hasn’t appeared to help Microsoft’s console sales one iota.

Sony’s stance during the same period that Microsoft was tearing itself apart was simple: “It plays games and costs $400.”

While we do not know how many Xbox One X or PS4 Pro units specifically sold versus the regular flavors of the console, we do know that Microsoft pulled out all the stops on the Xbox One X design and didn’t appear to see a commensurate sales bump. Fixing the price and positioning issues and overtopping Sony on performance didn’t fix the problem. The Xbox One has performed respectfully, but Sony has outsold it decisively — and it looks like launch positioning, rather than price or performance as such, were the primary reasons why. Keep the messaging simple and don’t enrage fans by talking about an always-on spybox when what they want is a game console.

Last thought: If you add up sales of the Xbox One and PS4, the total comes to 146.4M units, compared with a total of 173.2M units between the Xbox 360 and PS3 last generation. While that gap will continue to shrink until the new consoles launch in 2020, Microsoft and Sony would need to move 26.8M consoles between them in the last year of a cycle. The number of console gamers seems to have gone down in absolute terms between generations. Counting the Switch doesn’t help things — if we count the Switch, we have to count the Wii, and the Wii has shifted far more units.

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