Sony has been enjoying smooth sailing since it announced the PlayStation 4 last year, and it didn’t take long before the internet almost universally exclaimed the Xbox One was doomed. Now, here we are in 2014 and there is no doubt that the PlayStation 4 is outselling the Xbox One. Looking through various gaming websites, you can almost hear the gleeful cheers: “The big, evil Microsoft is getting what they deserve!”, “Long live Sony and the PlayStation 4!” Last generation’s underdog came from the shadows and overcame the tyranny of the mega corporation. It would seem to be a fairytale ending, wouldn’t it? If you forget that Sony is also a giant corporation who wants your money just as badly as Microsoft, and if you put aside for the moment that early sales figures only mean that Sony succeeded in captivating early-adopters better than their competitor, and if you also choose to turn a blind-eye to the future… then, yes, fairytale ending. Like a Disney Princess who falls for her Prince Charming simply because he came to the rescue, Sony fanboys and girls have been swept off their feet too soon without taking into account anything outside of the celebratory moment.
Any objective minded individual will tell you that Sony is in for a fight. Why? I’m glad you asked – here are 3, fairly unarguable, points that the raving fanboys conveniently ignore.
Sheer Financial Power
Microsoft has a lot of money. The first thing you learn in freshman level finance is that financial statements don’t mean everything. However, they are great indicators of just how well a company can maintain itself. Let’s take a look at a few stats from each company: Profit Margin, Return on Assets, Gross Profit, and Current Ratio. [Information taken on February 13th, 2014 – Microsoft / Sony]
- Profit Margin is a measure of profitability calculated by net profit as a percentage of revenue.
- Return on Assets refers to how profitable a company’s assets are in generating revenue.
- Gross Profit is the profit less the cost of making a product/service.
- Current Ratio measures a company’s ability to pay off short term debts. A ratio below 1 suggests a company would have problems.
|Return On Assets|
|Return on Assets|
So, what do these numbers ultimately mean? They represent the war chest of each company. Microsoft has the means to throw huge sums of money around for R&D and Marketing. It’s no secret that neither console is generating much (if any) money due to the cost of components and other various expenses. This is simply the name of the game. However, looking at the books, Microsoft can afford to take a loss on the Xbox One without much problem for a while. Sony, on the other hand, could quickly find themselves in hot water if anything goes wrong.
All About the Games
It’s ironic that in the early days of the Xbox One’s debut there was so much fury about the console being “anti-gamer.” No doubt, Microsoft made incredibly poor decisions implementing some of the console’s features. By the by, these bad decisions were overturned. However, one thing Microsoft has consistently gotten right is the games. Say what you want about the Xbox Division and its partners, but all it takes is a brief look at last generation’s sale figures to see that the Xbox consistently sold more games.
Last year it was announced that Kingdom Hearts 3 and Final Fantasy 15 would be coming to the Xbox One. Previously Sony exclusives, these games are hugely popular titles that definitely put a dent in the “on PS4 only” list. On top of this, Microsoft now has exclusive rights to the Gears of War series. Another definite blow to Sony.
The inclusion of these two gamer heart-throbs along with the X1 exclusives: Halo 5, New Gears of War, Forza 5, and the highly anticipated Titanfall, make the Xbox One’s future look very attractive. Yes, I know, Titanfall isn’t exclusive to the Xbox One, but it’s not coming to the PS4 or Wii U. As gamers and consumers, you can’t help but ask yourself, “What can one console offer that the other can’t?” For the moment, the Xbox One looks to have an advantage as many of the PS4’s exclusives are new, untested IPs that could be fantastic or could flop like so many before them.
Of course, many people have latched onto the resolution/fps disparity and hung on for dear life. While this will matter to a small segment of consumers, the majority of buyers will hardly, if at all, notice the difference.
This is perhaps the knockout punch Sony should be fearing. Hardcore gamers and fanboys do not drive the industry anymore. Casual gaming and media integration are huge forces. Microsoft set out to create an all-in-one box, and as soon as they begin partnering with firms to bring you cable Television, and they will, then Sony could find themselves at a disadvantage very quickly. Whether you like it or not, agree with it or not, it doesn’t matter; this is Microsoft’s approach to this generation, and from a business standpoint, it is hard to argue against. If they can integrate their box into your living room as a media hub while still bringing the games that gamers love to their system, why not? If parents, who know little about gaming, learn that they can use the Xbox One as a media center and still entertain the kids, what do you think will happen?
Microsoft made a console with the future in mind. I’m not saying Sony’s machine isn’t a powerful beast, but they might find their vision of the future short sighted when Microsoft makes its push later this year.