Business Approach Comparison Sony PS4 and Microsoft Xbox

[Johnny Awesome]

I agree that the market is changing and IMO MS is changing with it a lot better than Sony is.

I truly believe that at the end of the day we are going to be using multi-function equipment with digitally purchased content and MS is closer to that vision than Sony at the moment.

The only reason MS did a 180 is because they need the diehard gamers during the launch period and diehard gamers hated the old policies. If MS comes out of 2013 having sold as many boxes as Sony in the US/Canada/UK, then they've achieved their goals. Network effects will take over from there.

This is a business and business is about profits. MS doesn't care about selling an X1 to a poor farmer in Bulgaria that won't subscribe to Live. Let Sony have that money sink of a customer.

That's basically what happened last generation - Sony got stuck with most of the consumers that weren't willing to spend money. Even though they sold just as many consoles as MS world-wide, MS was $3 billion in the black and Sony was $3 billion in the red.

No one knows what's going to happen. Right now diehard gamers are shaking their heads thinking that MS is charging $100 more for a 30% less powerful system, when it's quite possible that a year from now joe family guy will be asking why Sony didn't include all of the things MS is offering for a mere $100 more.

If the $100 matters to you, then you aren't likely MS's target customer.

 

[Strange]

I agree that the market is changing and IMO MS is changing with it a lot better than Sony is.

I truly believe that at the end of the day we are going to be using multi-function equipment with digitally purchased content and MS is closer to that vision than Sony at the moment.

The only reason MS did a 180 is because they need the diehard gamers during the launch period and diehard gamers hated the old policies. If MS comes out of 2013 having sold as many boxes as Sony in the US/Canada/UK, then they've achieved their goals. Network effects will take over from there.

This is a business and business is about profits. MS doesn't care about selling an X1 to a poor farmer in Bulgaria that won't subscribe to Live. Let Sony have that money sink of a customer.

That's basically what happened last generation - Sony got stuck with most of the consumers that weren't willing to spend money. Even though they sold just as many consoles as MS world-wide, MS was $3 billion in the black and Sony was $3 billion in the red.

No one knows what's going to happen. Right now diehard gamers are shaking their heads thinking that MS is charging $100 more for a 30% less powerful system, when it's quite possible that a year from now joe family guy will be asking why Sony didn't include all of the things MS is offering for a mere $100 more.

If the $100 matters to you, then you aren't likely MS's target customer.

Just FYI, the attach rates for PS3 and 360 were very close. Both are around 9~10 games each.



Sony was 3 Billion in the red for a variety of reasons, two of them being the CELL processor and the blu-ray player, not because gamers didn't want to spend money.

You're also stating that Microsoft is closer to bringing a vision of "multi-function equipment with digitally purchased content", but so far all I've seen is kinect and HDMI in, both of which don't really give an edge if you take a close look at what Sony is offering through new services (viacom deal), internet plans(EU/Japan internet deals), as well as the PSV TV that some are (I would say wrongfully) ignoring.


Also, you're probably underestimating the number of people don't see the value in the extra $100. There is a very good reason why a lot of 360 gamers wanted it out (and they're incidentally the most vocal of all), and I don't think Microsoft is better served by alienating these people since they could be, in fact "returning customers".

 

[Johnny Awesome]

Just FYI, the attach rates for PS3 and 360 were very close. Both are around 9~10 games each.

It's not the attach rate that mattered last generation. It was the Xbox Live attach rate. It's the $6 billion swing in revenue that propelled MS over the top, profitability wise.

It'll be interesting to see what happens now that Sony has put MP behind their paywall. Will all those cheapass gamers that got a PS3 because MP was free stick with them, or go with the perceived industry leader in console networking services - MS.

 

[Johnny Awesome]

It's that kind of arrogance that has done so much damage to MS recently. 'Deal with', 'Buy a 360' etc. Every $ counts and every customer is a potential agent for positive marketing. Discounting anyone is shortsighted and foolish.

I think you're being naive. Different types of customers offer different value to their bottom line. They obviously care more about some than others. It's just smart business.

If MS scoops up all the family guys out there in upper middle income NA and UK and Sony scoops up all the hardcore college kids with two nickels to rub together trying to stick it to "the man", Sony isn't going to be around for another generation. The reality is going to be somewhere in the middle, but just how far one way or the other is what we aren't sure of yet.

 

[temesgen]

It's not the attach rate that mattered last generation. It was the Xbox Live attach rate. It's the $6 billion swing in revenue that propelled MS over the top, profitability wise.

It'll be interesting to see what happens now that Sony has put MP behind their paywall. Will all those cheapass gamers that got a PS3 because MP was free stick with them, or go with the perceived industry leader in console networking services - MS.

LOL - to be clear are you saying people's sole motivation for PS3 over 360 was free MP? You do realize that Sony has some of the best first party developers and for many the scope and quality of titles available was a huge factor in our decision to support the PS3. Ironically I own both PS3 and 360 and it wasn't until I got a VITA that I opted to purchase PSN Plus. I just renewed for a second year and I have never paid a penny for LIVE. I can't see myself ever paying solely to access MP or services which shouldn't be hidden behind a paywall like browsing. My satisfaction with PSN Plus is due to the games which afterall is the reason I bought the hardware in the first place.

MS, Nintendo and Sony have over the years had compelling exclusives which justified purchasing all platforms but now monthly fees are more core to the experience of atleast 2 of these ecosystems I'm inclined to put all my eggs in Sony's basket since my PSN Plus covers the VITA, PS3 and will also provide content for the upcoming PS4.

 

[Johnny Awesome]

LOL - to be clear are you saying people's sole motivation for PS3 over 360 was free MP?

No. I'm not saying that.

 

[temesgen]

I think you're being naive. Different types of customers offer different value to their bottom line. They obviously care more about some than others. It's just smart business.

If MS scoops up all the family guys out there in upper middle income NA and UK and Sony scoops up all the hardcore college kids with two nickels to rub together trying to stick it to "the man", Sony isn't going to be around for another generation. The reality is going to be somewhere in the middle, but just how far one way or the other is what we aren't sure of yet.

Yep, that support for the core after Kinect certainly raises some questions and concerns... Again another reason why many feel more comfortable supporting Sony who seem to be much more focused on core gaming. It is a gaming platform and I am a gamer....

Its that arrogance that I'd be concerned about, it took Sony nearly the entire generation to recover from their PS2 world view and the same might just happen to MS although the past 2 months have shown they are atleast aware and trying to make amends. No company is entitled to my support or money, they have to earn it thru offering something I see the value in. I'll never understand those who passionately dismiss the power of consumer choice or question the soundness of their decisions when it comes to spending money. Again its arrogance and hubris and history is full of examples with where that mentality can take a business. Hopefully MS is more attentive and humble about the strength of their position then you seem to be.

 

[fbomber]

I think you're being naive. Different types of customers offer different value to their bottom line. They obviously care more about some than others. It's just smart business.

If MS scoops up all the family guys out there in upper middle income NA and UK and Sony scoops up all the hardcore college kids with two nickels to rub together trying to stick it to "the man", Sony isn't going to be around for another generation. The reality is going to be somewhere in the middle, but just how far one way or the other is what we aren't sure of yet.

Assuming that only college kids are hardcore gamers is ridiculous. I´m a family guy and I´m getting the PS4. Not because of the 100$ less, but because it is, for me, a better console for gaming purposes. Many people I know are thinking the same way.

 

[Johnny Awesome]

I'm not making that assumption. It's just an example. Try to extrapolate a little.

 

[Bagel seed]

Sorry but you guys got trolled. Don't get roped in.

 

[Sonic]

I agree that the market is changing and IMO MS is changing with it a lot better than Sony is.

I truly believe that at the end of the day we are going to be using multi-function equipment with digitally purchased content and MS is closer to that vision than Sony at the moment.

The only reason MS did a 180 is because they need the diehard gamers during the launch period and diehard gamers hated the old policies. If MS comes out of 2013 having sold as many boxes as Sony in the US/Canada/UK, then they've achieved their goals. Network effects will take over from there.

This is a business and business is about profits. MS doesn't care about selling an X1 to a poor farmer in Bulgaria that won't subscribe to Live. Let Sony have that money sink of a customer.

That's basically what happened last generation - Sony got stuck with most of the consumers that weren't willing to spend money. Even though they sold just as many consoles as MS world-wide, MS was $3 billion in the black and Sony was $3 billion in the red.

No one knows what's going to happen. Right now diehard gamers are shaking their heads thinking that MS is charging $100 more for a 30% less powerful system, when it's quite possible that a year from now joe family guy will be asking why Sony didn't include all of the things MS is offering for a mere $100 more.

If the $100 matters to you, then you aren't likely MS's target customer.

This is simply incorrect. When you launch a machine at $100 higher than the competition and its sales are nearly equal to the competition and you launch a year later clearly that shows people willing to spend money bout a PS3. You do not know the reasons MS did a 180 and can estimate at best just like the rest of us. It most likely did have something to do with the negative perception of their online only policy and what that meant for "no used games". Please stop acting like MS does every single thing right in this industry and Sony does everything wrong.

 

[warb]

Assuming that only college kids are hardcore gamers is ridiculous. I´m a family guy and I´m getting the PS4. Not because of the 100$ less, but because it is, for me, a better console for gaming purposes. Many people I know are thinking the same way.

I came to the opposite conclusion looking at features on paper. If XBone can sign everyone in with personalised settings for games and TV apps on sight, plus effectively upgrade any living room setup with voice control, everyone gets more out the big screen.

We'll have to wait and see how useful this stuff in reality, but I like the ideas.

 

[Johnny Awesome]

I feel I've said my piece on this particular issue for now, we'll all just have to wait and see what happens.

 

[Sonic]

I am highly anticipating voice controls through Xbox One. For it to work for me it will be required that it can play back stored content on my DVR that way I don't have to switch back and forth between boxes and remotes. I also need it to be able to stream movies from any wireless device regardless of DRM.

 

[-tkf-]

Has it been confirmed that xb1 will run metro apps? Or are we just assuming? And what would it take for Sony to run android apps?

 

[Sonic]

Has it been confirmed that xb1 will run metro apps? Or are we just assuming? And what would it take for Sony to run android apps?

Not sure about Xbox 3 running metro apps. As for running android apps on PS4, would that require a version of Android to be the OS or is there a way to run android apps natively on others operating systems?

 

[blakjedi]

But Samsung doesn't seem to be pushing their WP products that much.

Not putting out multiple SKUs or doing as much marketing.

Is their WP phone comparable to their S4 and Note II or III products?

Are they advertising WP as much?

Given their volumes, you would think they'd be motivated to try to go to WP, through the WP licenses aren't going to be free either, are they?

How much are they paying for the WP8 licenses on the phones they do ship?

there may an alternate endgame there also. There are whispers that Samsung may attempt to transition slowly but surely from being an Android provider to their in-house Tizen platform.

Samsung is already tied to MS through PCs..I'm sure that they would love options to not HAVE to be tied to any one provider... they have no chance on desktop but in mobile... you can be like google and steal your friends OS, tweak it and sell it.

Anyone read up on Cortana? its actually pretty fascinating what MS plans to do:

From Zdnet: http://www.zdnet.com/cortana-more-on-microsofts-next-generation-personal-assistant-7000020602/

"Cortana will be more than just an app that lets users interact with their phones more naturally using voice commands. Cortana is core to the makeover of the entire "shell" -- the core services and experience -- of the future versions of Windows Phone, Windows and the Xbox One operating systems, from what I've heard from my contacts.

In Microsoft CEO Steve Ballmer's strategy memo from July about Microsoft's reorg, there were hints about Cortana. Ballmer mentioned that Microsoft will be working, going forward, on "a family of devices powered by a service-enabled shell."

That "shell" is more than just the Metro/Modern/tiled interface. Ballmer continued:

"Our UI will be deeply personalized, based on the advanced, almost magical, intelligence in our cloud that learns more and more over time about people and the world. Our shell will natively support all of our essential services, and will be great at responding seamlessly to what people ask for, and even anticipating what they need before they ask for it."

The coming shell won't simply surface information stored on users' phones, PCs and consoles like a search engine can do today. It also will "broker information among our services to bring them together on our devices in ways that will enable richer and deeper app experiences," Ballmer said in his memo. (That "brokering" is handled by Bing's Satori, which intelligently interconnects entities, i.e., information about people, places and things.)"

I think the "Always on" strategy of Xbox One was part and parcel of this Cortana Makeover.

 

[Cjail]

PS4 sold at loss at launch.

 

[RudeCurve]

That's interesting. PS4 sold at loss with no camera. XB1 break even with camera.

 

[Cjail]

If PS4 was sold for $500 probably it would probably break even as well.