Business Approach Comparison Sony PS4 and Microsoft Xbox

[Deleted member 11852]

Xbox is a popular brand in video games and they are using their video games consumers to give xbox wider identity. If microsoft didn't pay enough attention to xbox hardware/game aspect, xbox video, music, eReader, Cortana (voice assistance) and even xbox entertainment studios wouldn't be successful investments for microsoft.

Brands have weight, they have momentum; they don't just blink out when the original brand product disappears or changes. In 'Xbox' Microsoft have a brand that is well recognised and synonymous with entertainment. If they decided to cut lose from the games console market, the brand would carry them on for as long as it held value in consumers minds.

Like a baton being handed from racer to racer you can have brands transcend particular product categories. Look at Apple. Or Google. Or Disney. Xbox is likely one of Microsoft's most positive brands. It is natural Microsoft would want to exploit one of their this for other services or products. Hence Xbox Music and Xbox Video. Neither have anything to do with Xbox and both were previously under the Zune Marketplace.

Microsoft will, sensibly, rebrand service to make best use of their most appropriate and widely recognised brands at any time.

 

[mosen]

Brands have weight, they have momentum; they don't just blink out when the original brand product disappears or changes.

Brands may have weight, but not on all of sections that have been employed to. One brand may have different momentum on different sections. It's not that simple.

Gaming is most powerful aspect of 'Xbox' and Xbox Music (& Video) needs more resource and time to get independent identity and popularity among different and non-gamer people.

It's better to remember that Xbox Music was first introduced at Microsoft 2012 E3 conference to gamers.

 

[Gubbi]

It's better to remember that Xbox Music was first introduced at Microsoft 2012 E3 conference to gamers.

XBox music was a simple rebranding of the now defunct Zune brand.

Cheers

 

[DrJay24]

If they water down the Xbox brand enough by using it in inconsistent and random ways, then it will no longer refer to gaming and thus they do not need a game console.

 

[Deleted member 11852]

If they water down the Xbox brand enough by using it in inconsistent and random ways, then it will no longer refer to gaming and thus they do not need a game console.

I'm not saying Microsoft can't fuck it up. In the 80s and 90s the Apple brand was known only for computers, in the early 2000s they added the iPod and music, in the mid/late 2000s they added phones and more recently phones and tablets.

Brands are very adaptable given the right handling.

 

[zed]

I did predict ps4 over xb0 [thankyou thank you very much]. Though both sold worse than I though.
~140k is a lot worse than xb360's first jan (and that had supply issues)

For the upteenth time, $350 kinectless model is their only salvation

 

[babybumb]

This is awful for MS. Its now clear there is no way to compete with $100 difference even in US. 2:1 in the biggest stronghold wow

Also their numbers are currently favorable to them with some people picking a ONE because PS4 is not in the shop

 

[Rangers]

I did predict ps4 over xb0 [thankyou thank you very much]. Though both sold worse than I though.

GAF post on the issue:

So, let's say these are the figures:

- PS4 - 290k
- Xbox One - 145k
- Wii U - 40k (complete guess but probably close)

That gives a total of 475k.

In January 2007, where we had the exact same situation of a console that had been out for over a year, and two that were just released the year prior, 947k consoles were sold.

That's not good.

~140k is a lot worse than xb360's first jan (and that had supply issues)

For the upteenth time, $350 kinectless model is their only salvation

Dunno if I'd go that far just yet, but yeah I said from the beginning the plan B should be a 299 no Kinect box.

The thing is the strength of the XBO design if it has one isn't brute force, it's that it uses DDR3 which should be much cheaper. So to leverage that you have to sell a cheaper box (which will hope to be "almost as good").

It's just, MS insisted on screwing all that up with a super expensive Kinect.

But I'd guess they'd go to 399 with Kinect instead, first.

Or just do nothing, considering Greenberg nixed the 399 in 2014 idea on twitter, does MS even care at all anymore?

 

[London Geezer]

I disagree. A One without Kinect would lose its main competitive advantage - or at least the one they've been touting for so long now. It's far too late to release a Kinect less sku. They've already taken some big U turns which made them look pretty silly. This would make them look like they just have no idea what they're doing and they're making it up as they go along.
Don't think it will happen.

What has more chance of happening is MS spending some cash by offering a One at a much lower price, and sooner than people might expect.

 

[DrJay24]

I don't buy the 143k figure. That would be a low number for XB1 by any measure and a low number for the PS4 even at 2x. If Sony sold 300k in Jan and shipped ~900k in Dec, where are the other 600k consoles? They certainly are not on the shelves. Did they shut down production or redirect them elsewhere?

 

[Rangers]

I disagree. A One without Kinect would lose its main competitive advantage - or at least the one they've been touting for so long now

The thing is, -and this is all you need to know, people aren't buying it.

Therefore, it's not a competitive advantage.

If the Xone proposition is "$100 more, but Kinect", it's important to note, so far, it has failed.

Trying to shove something on people they just dont want is just arrogance and stupidity.

Now, I'm sure you can caveat this til the cows come home. Maybe when more Kinect software comes out it'll pick up a little. Kinect Sports Rivals is in April, but what else? Maybe over time it'll be a bigger factor. If's and maybe's can go on forever though.

I remember MS long ago noting about the original Xbox hard drive "having a hard drive didn't allow us to charge more for it". If you'll remember,. Xbox always cost the same as PS2 despite being saddled with an expensive HDD. It had to to keep up in sales.

Well, the same math looks to be true of Kinect. Having Kinect isn't allowing them to charge more for it, at least not so far. So guess what? they are fixing to eat that Kinect cost (if they drop to parity with PS4). Thus they are better off without Kinect. The logic is inescapable.

The only way Kinect even remotely has value is if lets say once they hit 399, they then consistently outsell PS4 due to Kinect. That seems unlikely currently, but I guess we'd have to see.

 

[zupallinere]

What has more chance of happening is MS spending some cash by offering a One at a much lower price, and sooner than people might expect.

This seems fairly reasonable. Of course with new folks in charge at Redmond and a shuffle in the stockholder group who knows what they are willing to eat in terms of losses. Part of it also depends on what folks think or don't think in terms of a big price drop at the end of the year. If sales are deemed to be down because of such speculation there will be pressure for a sooner rather than later drop and therefore a smaller one IMHO. 449 sounds like a half measure but jeez a 399 xbox one with kinect this early ( meaning later this year ) seems like a bridge too far without compensating owners of XB1s already bought.

 

[steveOrino]

I still dont see why MS has to do anything yet.

 

[DieH@rd]

I still dont see why MS has to do anything yet.

In US yes. They have more than good enough user base created, and sales are not abysmal.

But they are lagging in worldwide sales. EU cannot be "won" with a 500€ console that has pointless camera system [and multiplatform games that are preforming worse].

 

[Johnny Awesome]

MS is fine until E3

 

[Johnny Awesome]

MS is in a better position with X1 right now than Sony was at this point in the PS3's life.

It's no time to hit the panic button

 

[(((interference)))]

So gaming is doomed because a overpriced weak console and a year old port doesn't do well. Ok

Rangers is just stressing out because of the 2:1 news...

I don't think MS can sell an XB1 without Kinect (not yet anyway), it's a huge cornerstone in their design and plans for the box.
A price cut is more likely, but they'll have to compensate existing owners (maybe throw them a free game or two).
But maybe they'll just sit it out and hope Titanfall evens the playing field.

And ultimately, it's not even a disaster if the PS4 ends up outselling XB1 2:1 or 3:1

The Xbox did ok as a gaming platform despite being outsold 6:1 by the PS2, the N64 did fine being outsold 3:1 by the PS1.
And unlike the OG Xbox, MS are making money on the XB1 hardware right off the bat.

So no matter what happens (unless it ends up like the Wuu, which is impossible), the XB1 will still be a perfectly viable gaming platform that will have a lot of great titles, and millions of people will enjoy playing on.

It's just the XB fanboys that will mope about their console of choice not 'winning', but then again, they've had plenty of time to get used to that if they ever owned an original Xbox.

 

[temesgen]

At some point you'll be able to get an XB1 either for free or a hundred bucks with the purchase of a new laptop that cost >$700.00. Those deals had to move lots of consoles for MS and it will happen again. I did most of my gaming on the PS3 but bought 2 360s at launch (one for me and one for a family member) and got another one due to the special MS ran every fall for students.

I also seem to recall some sort of deal where you could finance a 360 at one point, MS could very easily offer similar terms for the XB1 if things get too out of hand.

Edit:

Reread the thread - IMO the reason numbers so low for PS4 in the US was due to stock being allocated for other markets. Sony is outselling in the US even with the limited supply but they have to know that may not last and they probably feel they can conquer Europe and Asia by getting to a critical mass with their install base and benefiting from online multi-player multiplier aka people buy the platform their friends buy.

Sony is probably thinking worst case scenario XB1 will get significant bounce in March due to Titanfall and even if Infamous is a good game its not going to move hardware in the US so safer to get the low hanging fruit then engage in a war in one market MS has to remain competitive in.

If I'm right and they are doing this it makes sense, shore up all other markets and let the first parties make the case for consumers in the US.

 

[-tkf-]

If the numbers are correct then it seems Microsoft's impressive launch sales quickly covered their base market.

Sonys numbers indicate the same, they just still seem supply constrained, world wide I might add. And with a big launch coming up in Japan they will be constrained for some time.

Microsoft still has many countries where they need to launch and maybe regain some momentum, I wonder what they are waiting for, software? games?

The same with Sony, I am certain that they are holding back on games, updates, etc to be able to make a sales push when they demand goes under supply. They essentially didn't do anything since launch, we just got Tomb Raider... With the ps3 I recall way more activity..

 

[Deleted member 11852]

MS is in a better position with X1 right now than Sony was at this point in the PS3's life.

Better but more importantly, different. If you look at Sony's position at this point in PlayStation 3's life, the company went on to tank financially for a few years before stabilising a little. Sony didn't have an equivalent to the cash cow Windows division to prop it up. They had less options.

It's no time to hit the panic button

I fully agree and I've not suggested they are panicking. What I that the new guy will likely to reviewing the operation of all parts of Microsoft's business, and just because a division is profitable that this doesn't mean it's safe.

This sparked the 'sell' post from Rangers and I'm pointing out that there are lots of subtle options in a running a business it's not just do it or don't.