After E3, the picture couldn’t be clearer. PS4 is your next console, we declared, but several months and Microsoft u-turns later, the next gen console race looks very different.
Yesterday, Microsoft confirmed that Xbox One will launch in 13 key territories on November 22. Now we can look to November’s face off with a far more detailed view of the contenders, their strengths, weaknesses and how each platform holder sees the next generation.
Firstly, let’s not read too much into those dates. PS4 will arrive before Xbox One in the US and Xbox One will debut first in Europe, but both will likely be sold out by then anyway. It’s difficult to imagine anyone basing their purchasing decision on something as arbitrary as which one comes out a few days before the other – they are each expensive pieces of technology and the proliferation of cross-gen games have blurred the line between the existing boxes and the successors. Greater competition from PC and mobile, plus broader problems with the economy mean that this generational shift will be slower than any we’ve encountered before.
Hardcore players will be the ones with a new Xbox or PlayStation underneath their televisions this Christmas, and these early adopters will likely have made their decision long before the end of November – and many will simply be buying the new version of the console they have already.
“This console transition differs from previous generations due to the fact that users are now far more connected and engaged with their Microsoft and Sony consoles,” says director and head of games at analyst IHS Piers Harding-Rolls. “That suggests that there will be less consumers sitting on the fence ready to change allegiance this time round.”
Nonetheless, coming out of E3 it was clear that PS4 had won over plenty of Xbox owners with its lower price, focus on games and more sympathetic approach to DRM. Since E3, Microsoft has bravely, and very publicly, revised its previous policies in order to show it means business, as Games Investor Consulting’s founder Nick Gibson notes. “Microsoft clearly needed to do a fair amount of catching up following the missteps around its unveiling and DRM policies and it has set about achieving this with an almost frantic determination,” he tells us. “Its exclusive triple-A software line-up has, rightly, been shoved to the fore but the multiple tweaks to the hardware spec at such a late stage is an unusual move that suggests Microsoft is very much up for the fight.”
Edward Woo, senior research analyst at Ascendiant Capital Markets, agrees – but still sees one format ahead of the other. “The race has turned from PS4 favour to nearly balanced after Xbox One backtracked on the internet requirement and used games DRM,” Woo says. “The free offer of FIFA in Europe helps close the gap considerably. I think price will still turn the favour to PS4, though.”
At Gamescom, with the free FIFA deal and its Call Of Duty bundle, Microsoft’s intentions were clear – it wants the average joe, guns-and-football market. A dozen whimsical indie games can’t sell a console, but FIFA and COD certainly can; Games Investor’s Gibson describes the pre-order offer as “a great sales incentive and way to reduce the perceived price disparity between the two consoles.” IHS analyst Harding-Rolls says that “Sony’s strength across continental Europe, the weaker financial position of the EU consumer and the need to provide additional bundled value” prompted Microsoft to make the move, adding that “consumers in Europe see less value from entertainment services, the new interface and Kinect usage than those Xbox users in the US.”
It’s interesting to note that there’s no such pre-order incentive in Xbox’s US heartland. Indeed, the FIFA deal was announced at Gamescom when the US was asleep, with no livestream on Xbox.com and relatively little fanfare, given Microsoft’s track record for spectacular press events. One could suggest that Microsoft didn’t want its US fanbase to find out that European players will be getting a better deal. Could we see a free game giveaway with the US console? It’s still a possibility, says Woo. “Xbox One preorders are selling very well, so I don’t think they will yet. If sales are slow or if PS4 has the upper hand, then yes, I think they will do the same.”
And what of Japan? Sony launched PS3 in Japan first, and Microsoft launched 360 there within weeks of its US debut, later making big investments in games like Blue Dragon and Lost Odyssey to win over Japanese players. A generation later, we’ve no firm plans for a Japanese launch for either console just yet; perhaps Tokyo Game Show will give us answers on PS4 later this month, but Microsoft seems to have completely given up in the territory.
Software will, of course, be most important battleground after hardware pricing. Judged purely on profile, Xbox One’s exclusives Dead Rising 3, Ryse: Son Of Rome, Forza Motorsport 5 and Killer Instinct feel more substantial than its rivals’ offering. Sony aficionados might argue that PS4’s own day one exclusives DriveClub, Killzone: Shadow Fall and Knack will be supplemented by the plentiful, PlayStation-exclusive indie games Sony had focused on so effectively at Gamescom, but let’s not forget that Xbox One has its share of smaller titles, too – Crimson Dragon, Peggle 2 and LocoCycle flesh out Microsoft’s lineup with something more immediate to download when the Xbox One’s digital storefront opens for business.
Ultimately, neither console has a headline-grabbing launch exclusive on the scale of a Halo or Uncharted. Respawn’s mech shooter TitanFall could have been that game for Xbox One, had it been ready for release sooner. “Xbox One has a better line-up, especially with TitanFall to come as an Xbox exclusive,” says analyst Woo, and while Games Investor’s Gibson agrees that Xbox One has the bigger blockbuster titles, the differences between the two will shrink over time.
“Microsoft clearly wins on exclusive triple-A releases, Sony clearly wins on exclusive indie titles,” he tells us. “However, Sony claims to have lots of unannounced triple-A titles in development and Microsoft claims it is starting to win over indie developers. Exclusives from third parties have the potential to sell consoles, but are financially difficult to maintain beyond the launch period as the third party needs to be compensated for the ‘lost’ revenue it could have received by making the game available on the other console. As the installed bases grow, so does this opportunity cost. The end result will inevitably be the sort of near parity that exists between PS3 and Xbox 360 now, with major exclusives mostly from first party developers.”
And let’s not forget the power of marketing. As Microsoft discovered after E3, it’s important to define your console in the eyes of the consumer as clearly as possible; how each console is advertised to the mainstream consumer – the vast majority that don’t gobble up every NeoGAF thread or conference livestream – will play its part. Whatever Sony does to sell PS4, Microsoft will likely just outmuscle its rival through its sheer spending power. Fortunately for Sony it’s not all down to platform exclusives and marketing. PS4 will, of course, also play host to FIFA 14 and Call Of Duty: Ghosts and both consoles will have Assassin’s Creed IV Black Flag, Battlefield 4 and Watch Dogs at launch.
Whilst many will consider Xbox One the stronger prospect in terms of games, its higher price, and the reason for that premium, Kinect, could count against the console in the short term. Ascendiant’s Edward Woo doesn’t believe that Kinect “adds enough value.” “Most hardcore gamers don’t care much for Kinect,” he tells us. Games Investor’s Nick Gibson agrees, but notes that Microsoft’s motion-tracking add-on is likely a long term play. “For most early adopters, who are most likely male core gamers, Kinect will add little value,” he says. “As Xbox One’s price comes down and it gains more Kinect titles, it will open up to the sort of family demographic for whom Kinect will hold much greater interest.”
All that considered, then, which console do our analysts consider to be leading the next gen race? Games Investor’s Gibson warns against early assessments. “Judging a race before it has begun is somewhat foolhardy,” he tells us. “PS3 suffered a relatively poor start and was even written off by some commentators, but has eclipsed Xbox 360 in pretty much every major territory bar the USA and UK and its global installed base is now larger than 360’s. Despite being seven years old, PS3 and quite possibly Xbox 360 still have many years in them left, so while one console may hold a perceived lead at this stage, there is absolutely no guarantee that it will hold it in the far more important longer term.”
IHS’ Harding rolls agrees – November represents the first shots fired in a console battle that’ll consume many years to come. “For those that are still considering the pros and cons of the offer, pricing, content exclusives and console availability will all be key deciding factors,” he says. “Neither Xbox One or PS4 has a clear advantage across all these areas, so there is still a lot to be battled over.”
Ascendiant’s Edward Woo, however, is backing Sony’s console. “I think PS4 is still ahead,” he adds. “They had the momentum since early in the year and I believe it is benefiting from Microsoft’s initial confusion with its console. It also helps that they are at a lower price.”