TOKYO / CHICAGO / STOCKHOLM (Reuters) – Think of Michelangelo and Da Vinci. Muhammad Ali and Joe Frazier. Batman v Superman. Another epic competition will re-emerge next week as Sony and Microsoft take on the next generation of their blockbuster video game consoles.
Sony, which has a PlayStation 5 (PS5) in charge of Microsoft̵7;s Xbox Series X and Series S, is considered by many to be in an extremely favorable position to capitalize on the boom in consumer spending caused by the pandemic. out, has spurred a $ 150 billion video game industry.
According to industry experts, the Japanese company has sold more than 100 million PS4s, winning the battle of the previous generation – will see it retain an advantage over its U.S. air rival.
“Xbox owners tend to buy new Xbox, while PlayStation owners tend to buy new PlayStation,” said Wedbush Securities analyst Michael Pachter.
However, the industry is changing and cloud gaming is on the rise, allowing games to be streamed without the bulky hardware. This could limit console sales in the coming years, a change that could benefit Microsoft, analysts say.
Two consoles – the first to be released by two companies in seven years – are eagerly awaiting; Xbox will go on sale on Tuesday and PS5 two days later in major markets, priced around $ 300 to $ 500 each.
The race to pre-order the gear has actually started weeks ago, though blink and you may have missed it. Sony’s PS5 pre-orders sold out in minutes on many retail sites, for example, disappointing fans.
Julian Mercado, 17, manages to pre-order a PS5 from Walmart.com WMT.N minutes after pre-orders began on September 16, knowing he would be up against an army of gamers.
“It was just like going shopping on Black Friday,” said high school student from Dallas, who has been playing video games with his father since he was five years old. “You show up early, you leave with something good. You show up too late, you will leave with nothing.
PLAY IN ONE NEED
Sony 6758.T may be advantageous, but the stakes are very high for the Japanese company. Its game business is its biggest cash cow; In fiscal 2019, the division, which includes hardware, software and services, generated nearly a quarter of the group’s sales of approximately $ 77 billion and nearly 30% of total operating profit 7 , 9 billion dollars.
Microsoft MSFT.O does not break gaming results, even though it’s a smaller share of Sony’s business performance compared to Sony. It also does not disclose hardware sales, but the Xbox One is currently estimated by analysts to have sold 50 million units.
For other major hardware players, Japan’s Nintendo 7974.T, console sticking is paying off with forecast soaring last week after demand for the Switch soars.
The PS5 will retail for $ 499.99 or $ 399.99 for the digital-only version, while the Xbox Series X will be priced at $ 499.99 and the Series S lower specs for the price. $ 299.99.
According to the media research firm Ampere, about 5 million PS5 units are expected to be sold this year, compared to 3.9 million new Xbox units, with combined sales expected to exceed that. previous generation.
See GRAPHIC tmsnrt.rs/3l3Rpe3 of the PlayStation v Xbox sales forecast: tmsnrt.rs/3l3Rpe3
“The pandemic is expected to transform America’s holiday shopping season,” said Jason Benowitz, a senior portfolio manager at Roosevelt Investment Group. “Playing at home has become a way for some people to socialize safely.”
Sony’s game depth is supported by the in-house studios behind exclusive products like “Marvel’s Spider-Man: Miles Morales”. In contrast, the new Xbox, game experts said, will lack killer launch titles, with the latest installment in the flagship “Halo” series being pushed back to the year after the pandemic hits.
Even so, cloud game growth could give the US software giant an edge in the coming years. Although both companies have turned to offering services, Microsoft has been more aggressive.
Its Xbox Game Pass subscription service has grown rapidly; it offers over 100 titles including brand new games and has over 15 million users. Sony has been reluctant to offer its most compelling titles on services like PlayStation Now, out of concern that this could erode the sales of large-budget games.
According to industry experts, the pandemic, while driving some demand, has also constrained production by Sony and Microsoft, according to industry experts, who expect shortages to last up to five. 2021.
“Demand will outstrip supply, so there will be some people who won’t be able to get hold of the console when they want,” said Piers Harding-Rolls, game research director at Ampere.
Sony has announced that retailers like Walmart, Best Buy BBY.N and Goals TGT.N will be selling the PS5 online exclusively when it launches on November 12, to prevent people from camping outside a store during a pandemic.
According to Wedbush, Walmart will sell $ 1.1 billion of new console by the end of January. It dominates the US market alongside GameStop. GME.Neach side accounts for about 30% market share, while consoles sales at Target and Best Buy account for about 15% each, the research firm said.
Target says it is working closely with suppliers to secure enough inventory. Some shoppers who had pre-ordered the console told Reuters that Target had said they could get them a few days after the launch date.
Walmart said it would start selling the new console at launch but declined to comment on whether it had enough stock to meet demand. Best Buy also declined to comment on whether it was responsive to demand, while GameStop did not respond to a request for comment.
For DeAnthony Thicklin, a casino employee who pre-booked his PS5 on Target.com in September, priority was to get their hands on the console on the very launch day.
The 25-year-old gives some advice.
“All your tag information has been set up so the only thing you have to do is click,” he said. “Don’t hesitate. Hurry up.”
Reports by Sam Nussey in Tokyo, Richa Naidu in Chicago and Supantha Mukherjee in Stockholm; Additional reporting by Uday Sampath Kumar; Edited by Kenneth Li and Pravin Char