Sony Has an Early Mindshare Lead on Microsoft in the Next-Gen Console Wars - TheStreet

Sony Has an Early Mindshare Lead on Microsoft in the Next-Gen Console Wars

Polls indicate far more gamers are currently interested in buying the PlayStation 5 than Xbox Series X or S.
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While it’s still very early, Sony’s  (SNE) - Get Report PlayStation 5 is generating more enthusiasm among gamers right now than Microsoft’s  (MSFT) - Get Report Xbox Series X and S.

On Wednesday, Sony announced that the PS5 will launch in the U.S., Japan and several other markets on Nov. 12, and will be available elsewhere on Nov. 19. The company also revealed that the standard PS5 will retail for $499, while a “Digital Edition” that lacks an optical drive but is otherwise equally powerful will sell for $399.

The announcements arrived a week after Microsoft disclosed that its flagship next-gen console, the Xbox Series X, would sell for $499, and that the Xbox Series S -- a sibling that lacks an optical drive, has a less powerful GPU and contains less RAM and storage -- would sell for $299. Both consoles were promised to be available on Nov. 10, with pre-orders starting on Sep. 22.

A slew of retailers began taking PS5 pre-orders on Wednesday, and it generally wasn’t long before they were sold out. Currently, some of those who were lucky enough to place pre-orders are selling them on eBay for healthy premiums: Pre-orders for the standard PS5 often go for around $750, while pre-orders for the Digital Edition often go for around $650.

It’s possible that supply constraints caused by manufacturing issues are contributing to this situation. Bloomberg reported earlier this week that Sony had pared its production estimate for the PS5 due to weaker-than-expected processor manufacturing yields. Sony responded to the report by stating it had false information and insisting it hasn’t changed its production target for the PS5 since the start of mass-production (whether it was planning to hike its production target and had to backtrack remains unknown).

But while manufacturing issues might be affecting supply, all signs point to stronger demand among gamers for Sony’s next-gen console than for Microsoft’s next-gen consoles.

A poll conducted last week by gaming website IGN resulted in 68.2% of 138,045 respondents indicating they’re more likely to initially buy a next-gen PlayStation rather than a next-gen Xbox. A poll conducted in late July by gaming YouTube channel RedGamingTech turned up pretty similar results among its 12,853 respondents.

A belief that Sony has a stronger stable of exclusive games -- both in terms of games that are only playable on a next-gen console, and games that can run either on a next-gen or current-gen console -- appears to have much to do with Sony’s mindshare lead.

While Microsoft can tout current and upcoming Xbox exclusives such as Halo Infinite (recently delayed to 2021), Gears Tactics, Warhammer 40,000: Darktide and Forza Motorsport, Sony’s lineup of current and upcoming exclusives, which includes titles such as Ghost of Tsushima, Horizon: Forbidden West, Spider-Man: Miles Morales, Sackboy: A Big Adventure and The Last of Us Part II, is arguably stronger.

In addition, while the Xbox Series X has produced some enthusiasm within Microsoft’s large Xbox One base, gamers appear to be pretty lukewarm about the Series S, given that it has nearly 70% less GPU power (as measured in TFLOPs), 37% less RAM and half the SSD storage space. Sony’s approach to selling a cheaper next-gen console -- taking out the optical drive, but keeping the processor, RAM and SSD unchanged -- looks wiser, even if it’s only providing a $100 discount rather than Microsoft’s $200 discount.

Microsoft does have an edge on Sony when it comes to subscription gaming services. While Sony did just add more than a dozen popular back-catalog titles to its PlayStation Plus service, which costs $10 per month or $60 per year, Microsoft’s $10-per-month Xbox Game Pass service arguably has a stronger library.

In addition, Microsoft offers its $15-per-month Xbox Game Pass Ultimate service, which provides access to Game Pass titles across both consoles and PCs, as well as the Xbox Live Gold service. And going forward, Game Pass Ultimate will also bundle Electronic Arts’  (EA) - Get Report EA Play gaming service and (with the caveat that it only works on Android devices for now) support Microsoft’s cloud gaming service.

Also: As Nvidia  (NVDA) - Get Report, Nintendo  (NTDOY)  and others can attest, gaming activity and spending is quite elevated right now across a variety of platforms. That should ultimately be a positive for next-gen console sales in general.

Nonetheless, for now, the PlayStation 5 looks like it’s poised to get a larger portion of those next-gen console sales than the Xbox Series X and S.