XBox Vs. PS4
Game Console Industry
The game console industry is unpredictable, as the market leader changes as frequently as new games being released. Currently, the most prominent console manufacturers in the industry are Sony (PlayStation), Microsoft (Xbox), and Nintendo (Wii). While Sony and Microsoft focus on powerful machines and games targeted at older teens and young adults, Nintendo’s family friendly, less graphically polished consoles target an entirely different market, and is not applicable to the Sony/Microsoft battle.
The adoption of consoles depends heavily on one factor: the content available. A console manufacturer needs to have third-party developer support in order to have a steady stream of quality video games being released throughout the year. Although brand loyalty, technical capabilities and price certainly plays a part on the purchase decision of an individual, consumers tend to buy the console that offers the games that the consumers enjoy the most. Sony and Microsoft both publish a catalogue of a unique line up of video games made in-house as well as receive royalties from third-party video game developers such as Electronic Arts and Activision (ATVI).
Microsoft and Sony both use a loss leader strategy, pricing their consoles lower than the production cost; thus, increasing the market for higher margin sales of related software, licensing fees, accessories, and downloadable content. As such, both firms sacrifice console profit to attract customers to adopt their ecosystem. This pricing strategy for game consoles, coupled with each console’s respective launch dates, has immense effect on setting the competitiveness of the companies for years to come. Historically, higher initial pricing methods bottlenecked initial uptake on consoles, and is often followed by price cuts to encourage greater adoption. During the launch of Xbox 360 and PS3, the price disparity and subsequent price drops hugely altered consumer purchasing decisions. The lower
The game console industry is unpredictable, as the market leader changes as frequently as new games being released. Currently, the most prominent console manufacturers in the industry are Sony (PlayStation), Microsoft (Xbox), and Nintendo (Wii). While Sony and Microsoft focus on powerful machines and games targeted at older teens and young adults, Nintendo’s family friendly, less graphically polished consoles target an entirely different market, and is not applicable to the Sony/Microsoft battle.
The adoption of consoles depends heavily on one factor: the content available. A console manufacturer needs to have third-party developer support in order to have a steady stream of quality video games being released throughout the year. Although brand loyalty, technical capabilities and price certainly plays a part on the purchase decision of an individual, consumers tend to buy the console that offers the games that the consumers enjoy the most. Sony and Microsoft both publish a catalogue of a unique line up of video games made in-house as well as receive royalties from third-party video game developers such as Electronic Arts and Activision (ATVI).
Microsoft and Sony both use a loss leader strategy, pricing their consoles lower than the production cost; thus, increasing the market for higher margin sales of related software, licensing fees, accessories, and downloadable content. As such, both firms sacrifice console profit to attract customers to adopt their ecosystem. This pricing strategy for game consoles, coupled with each console’s respective launch dates, has immense effect on setting the competitiveness of the companies for years to come. Historically, higher initial pricing methods bottlenecked initial uptake on consoles, and is often followed by price cuts to encourage greater adoption. During the launch of Xbox 360 and PS3, the price disparity and subsequent price drops hugely altered consumer purchasing decisions. The lower
Bibliography: MarketLine (2013). Global - Games Consoles. Retrieved from http://advantage.marketline.com/Product?pid=MLIP0967-0005 MarkletLine (2013). Microsoft Xbox One: The battle against Sony PlayStation 4. Retrieved from http://advantage.marketline.com/Product?pid=ML00013-039 Sony aims at gamers with new PlayStation 4 console - Yahoo News. (n.d.). Retrieved from http://news.yahoo.com/sony-aims-gamers-playstation-4-console-151919184.html The Xbox One and PS4 share similar specs, but the devil’s in the details | Ars Technica. (n.d.). Retrieved from http://arstechnica.com/gaming/2013/11/the-xbox-one-and-ps4-share-similar-specs-but-the-devils-in-the-details/2/ Xbox One review: More than a game console, less than a living room revolution | Ars Technica. (n.d.). Retrieved from http://arstechnica.com/gaming/2013/11/xbox-one-review-more-than-a-game-console-less-than-a-living-room-revolution/3/ Xbox, Playstation Prep For Bruising Ad-Spending Battle | Digital - Advertising Age. (n.d.). Retrieved from http://adage.com/article/digital/xbox-playstation-prep-bruising-ad-spending-battle/242141/