Article originally published on LinkedIn. Daniel Camilo is a business developer for Chinese game publisher APPTUTTi, based in Shenzhen, China.
This year’s new generation launch is probably the most unusual yet: here we are, in late September, and even though both the PS5 and Xbox Series X/S hardware have been revealed, as well as most of its online services and launch catalog, Sony has yet to disclose pricing. As I write this, we know the price for both of Microsoft’s consoles, but have yet to find out the price of the PS5. For reference, back in 2013 when the PS4 and Xbox One were released in November of that year, the prices had been announced in June of that same year, at E3. Also, Nintendo will not be releasing a new generation console this fall (maybe some new Switch will come out in 2021 according to some rumors, but that’s all they are for now).
Arguably, this will be a two player race and duel this holiday season. I don’t mean by any means that Nintendo doesn’t have a say in the race (the Switch will very likely sell tremendously well this holiday season), but the spotlight will be aimed at Sony and Microsoft.
PS5 vs Xbox: By How Much Will The PS5 Outsell The Xbox?
I predict the PS5 will outsell the Xbox at a ratio of at least 4-to-1 this holiday season, as long as it doesn’t cost much more than the Xbox Series X (US$ 499).
With the recent announcement/leak of the Xbox Series S and subsequently price announcements for both models of the new Xbox, Microsoft is riding on a positive hype train, the kind it didn’t experience, arguably, during this whole last generation. The value proposition of the Xbox Series S (US$ 299), coupled with services like Game Pass, have allowed Microsoft to position itself as the most affordable entry for next-gen gaming. That’s great, and it certainly shifted (some) people’s perception on the brand, but ultimately, Sony still has the upper hand where it really matters: content, games!
Once all the excitement settles and people are ready to buy a new console in November and onward, they will still be looking at the same factors they always did: content, and long term positioning. In that regard, Sony clearly represents the best value. Unlike Microsoft, Sony’s PS5 has been positioning itself as a true next-gen console from day-one, without all the compromises of the Xbox (cross-gen compatibility, first-party exclusives having to run on the Xbox One for the first couple of years, games having to be compatible with the weaker Series S...). Plus, it carries an onslaught of recognizable exclusive IPs that Microsoft simply can’t match, for now at least.
As for pricing, having the cheapest console isn’t necessarily a guarantee for good sales. Ask the Dreamcast, or the Watara Supervision (wink wink to retro-nerds). Obviously having an excessively expensive console at launch is also not a good idea, but ultimately, the balance between price, brand awareness and content is what matters.
Games Do Matter
When looking at Xbox’s Game Pass, it is indeed incredible value (I just recently signed up for it, for the second time), but is it really that attractive? It might be for the casual consumer for whom more means better perhaps, but for core gamers, even Game Pass doesn’t solve the biggest issue with the Xbox: games! Yes, there’s a lot of games in there (coming and going by the way), but how many of those are games that people really want to play? Ask anyone around you about which upcoming Microsoft exclusives they are looking forward to, and you’ll probably be staring for a while at someone staring back at you, mute. On the other hand, ask what games they can’t wait to play from Sony, and you’ll probably hear a long list of heavy-hitters (Spider-Man, God of War, Horizon, GT7, Ratchet & Clank, Demon’s Souls Remake, more and whatever Naughty Dog and other first party studios are certain to announce eventually). When the time comes to choose which new console they want (first), the PS5 will be the first choice for most consumers.
Can People Afford New Consoles This Year?
There’s an ongoing narrative that consumers simply won’t be willing to spend hundreds of dollars on a new console this year, considering the global economical disturbance brought by COVID-19. I believe it is exactly the opposite. Sure, if people are broke, can’t afford it and/or have other priorities, they won’t be buying a new console this fall. But 2020 made it abundantly clear that people are willing to spend money on gaming more than almost any other entertainment medium. People spent more time than ever before at home playing videogames. Not just core gamers, but also their families were exposed (many for the first time, in a serious way) to gaming in an unprecedented way. Mobile games, but also console and PC games saw an immense growth in revenue. Single player games in particular did extremely well, with some games reaching a level of mainstream acknowledgment and exposure rarely seen in the industry (The Last of Us Part 2, Death Stranding, Animal Crossing*, Ghost of Tsushima...), while on the other end of the spectrum, titles like Valorant, Hyper Scape and other hyped online games have failed to set the world on fire, exposing an alarming (yet predictable) level of saturation for some of these offerings (but I digress). Sony has build up a strong reputation when it comes to high-quality single player-story driven games, and many consumers will be looking at that for this holiday season. In the meantime, Microsoft seems to be catching up to dying trends, with the less than exciting launch of Bleeding Edge, and more recently, Grounded.
Consumers have spent less in traveling and disposable products than ever before, due to the lockdowns. Many have more disposable income for entertainment than ever before, and they are craving for more. I’m convinced (all potential logistic issues aside) this is the perfect year for the launch of a new generation of consoles. The mindset is perfect! Gaming is also escapism, and that is exactly what so many people are craving these days. I have no doubts the PS5 will outsell any offering from Microsoft, and not only that, it could have the most successful console launch ever.
*Yes, the game has a heavy focus on online interaction, but it can also be played solo.
PS Disclaimer: I will be getting both the Series X and PS5 at launch, if there's stock where I'm at. This is not a "fanboy's perspective", neither is it wishful thinking. I'm console agnostic and always own all main platforms available.