PS4 Vs Xbox One: Sony retains upper hand after Microsoft DRM U turn, say analysts

PS4’s lower price will give it the upper hand against Xbox One despite Microsoft’s decision to backtrack on its DRM policies last night, analysts have told us.

Senior research analyst at Ascendiant Capital Markets Edward Woo expects Xbox One and PS4 to each sell two million units in 2013, with PS4 pulling ahead of its rival significantly next year. Woo had forecast unit sales of 10 million for the Sony console in 2014, and five million for Xbox One. He told us this morning that his forecasts haven’t changed, despite Microsoft’s U turn on Xbox One DRM.

“I think this is a big move by Microsoft,” Woo told us. “They obviously felt that things were turning badly against them and now they don’t have a choice but to match Sony. While this levels things more, I still think Sony, with the $100 price advantage and goodwill from the Microsoft mess, still has the upper hand.”

IHS Screen Digest’s senior principal analyst and head of games Piers Harding-Rolls believes that Microsoft’s DRM backtrack leaves us with “A straight fight on pricing and games exclusives.”

“We believe price will be the biggest differentiating feature and have slightly adjusted down our Xbox One sales expectation for continental Europe at launch, based on the €100 gap in pricing,” he told us.

“It was clear Microsoft needed to do something to douse the flames of discontent and the U turn means early adopters can now make a straight purchase decision based on content, price and features between the Xbox One and PS4.”

Woo believes that Microsoft will struggle to justify Xbox One’s weightier pricetag, however. “I think the consoles are very similar so the $100 price difference will now be very important,” he said. “Microsoft will have to explain why the $100 is worth the price. I don’t know if they will be successful, though they do seem to have a slight edge with more exclusive software right now.”

Harding-Rolls added that existing userbases will play their part, too. “We were impressed by Xbox’s exclusives at E3,” he told us. “Those consumers already embedded in Xbox Live and PSN are less likely to jump ship which changes the dynamic for this gen’s launch. Beyond these aspects both platforms have differing value propositions. Xbox One’s broadcast overlay offer is skewed towards the US consumer at launch and PS4 has some interesting features using streaming technology. Neither of these features is top of list when considering purchase for the early adopter.”