The 8th Generation Kicks Off

How are Sony, Microsoft and Nintendo fairing after 8 months in the marketplace?

Images of the controllers from the 8th gen consoles. Source: Dusty Cartridge.com
Images of the controllers from the 8th gen consoles. Source: Dusty Cartridge.com

It’s been nearly 8 months since the next generation (the eighth in fact) of gaming consoles began, and it’s a good time to reflect on the early results of this gen, just prior to a big window of releases going into the holiday season. Sure, it’s only August, but September through December sees some of the biggest titles of the year emerge. This is the calm before the storm.

What has emerged is that decisions early in the piece are now affecting the sales of each of the big console manufacturers. Policy, architecture and price are all coming into the fold, with one manufacturer emerging as the leader, and one other struggling to keep pace. Read on to find out more.

 

Microsoft

Source: Forbes.com
Source: Forbes.com

As far as late starters are concerned, Microsoft’s foray into the console gaming market could be considered one of the more successful. A follow up to the original Xbox, the Xbox 360 sold approximately 83 million units worldwide, making it the second most successful console of the 7th gen. The 360 had – and continues to have – many fans, as a solid amount of exclusive games and partnerships, coupled with an excellent online service, meant that the 360 was an incredible success for Microsoft. The 360 has evolved over time, to include a number of SKU’s, in addition to a number of accessories and pack in’s, such as the Kinect Motion controller. It was also successful early on due to its price, which undercut its Sony rival by $100.

It wasn’t always smooth sailing however – first generations of the 360 were subject to a number of technical issues, the most famous of which is the “Red Ring of Death” which effectively bricked consoles, making them unusable.

Early indications were that Microsoft were looking to kick it up a notch with its 8th gen console, coupling a next gen Kinect sensor with upgraded hardware to provide a whole new experience to consumers. In order to differentiate itself from the pack, Microsoft chose to enact a number of policies around the way games were purchased and played.

Chief among these were the always-online architecture of the new console, which meant that a 24-hour “check-in” would have to occur online, and that games would have to be tied to a users Xbox Live account. This meant that if for whatever reason you were unable to get online to check in, your entire game library would be unusable. Games would no longer authenticate against a verified disc, and would instead need to be connected to the internet to work.

The response to these policies was overwhelmingly negative, and when the Xbox One launched 6 months later, they would be nowhere to be seen, Microsoft choosing instead to revert to a more traditional model. In addition, the price tag of $499 US dollars was One Hundred dollars more expensive that it’s direct competitor. Coupled with the negative DRM publicity, Microsoft were off to a bad start.

Fast forward 8 months, and it is not entirely clear how successful the XB One has been. Microsoft have either been unable – or more likely – unwilling to provide figures on the new consoles sales, only providing a “5 Million shipped” number in April of this year. Despite big promises of a Hands-Free, Kinect enabled experience, reception to the mandatory pack-in has been mixed, and led to a new SKU early on removing the Kinect, which has enabled a nearly $100 price drop to compete with Sony. This is a big compromise for Microsoft, who had big hopes for a voice enabled next gen experience. According to the latest figures from the NPD Group, the Xbox One continues to trail its Sony rival, as it has done for the last six months on the trot. Annual figures also show the Xbox One trailing, by around 400,000 units in the United States alone. Approximations put that as a conservative estimate, with global figures much higher in favour of Sony.

Sony

Source: Playstation.com
Source: Playstation.com

Despite its power and apparently superior architecture to its rivals, the Playstation 3 came last in terms of sales in the 7th generation of consoles. Despite selling 80 million units worldwide, difficulties with development, its lack of quality titles, and its higher price meant that many chose the cheaper Xbox 360, which promised big exclusive games and content.

With Sony struggling in sales, it touted its Playstation Network as an excellent alternative to the Microsoft Pay-to-Play-Online Live service. This would later come back to haunt Sony, as in April 2011, they revealed that the network had been hacked, and a large amount of customer data compromised. The service was down for approximately two months, and trust in the Playstation brand plummeted. Sony was made to eat humble pie; after being so successful in the two previous generations, they were now looking down the barrel of a heavy defeat at the hands of Microsoft and Nintendo.

However, after some much needed soul searching, the Playstation brand began to bounce back with the help of some big exclusive titles toward the end of the 7th gen. With the 8th gen approaching, Sony returned to square one, building good quality hardware, providing it at a solid price and above all else, making sure they catered to gamers first. The Playstation 4 was born: Avoiding the controversy that plagued Microsoft’s launch, the PS4 was $100 cheaper than the Xbox One, a direct reverse of the previous generation.

8 months later, and the PS4 is the best selling console of this generation thus far, and continues to beat both its competitors soundly each month. Sony has managed an amazing turnaround; they have taken a bad situation, learnt from it and came out better for it on the other side. The PS4 has sold approximately 7 million units worldwide, and continues to top sales figures for consoles overall.

Nintendo

Source: Forbes.com
Source: Forbes.com

If there ever was a story of prince to pauper, this would be it. Nintendo, on sales alone, won the 7th generation of consoles. The Wii – a game console with a focus on fun, family friendly titles – was incredibly well received, and sold over 110 million units worldwide, soundly beating both Microsoft and Sony. With an incredibly successful 7th gen behind them, Nintendo focused on repeating their successes. It wasn’t to be.

The “Wii U” launched a full year ahead of its competitors, in late 2012. The U was a gamble in many ways for Nintendo: No onboard Bluray (widely accepted to be the optical disc standard), hardware specs that many considered to be on the low end and a controller with a 6.2 inch built in touchscreen.

In addition, a lack of big name titles, and little to no support from 3rd party developers meant the new consoles software library was relatively poor.

Since launch, 6.6 million Wii U’s have been shipped worldwide, and whilst that may seem like a high number, Nintendo have had a full 12 month headstart. Nintendo have cut long term forecasts of the consoles sales, as it struggles to sell against the powerhouses of Microsoft and Sony. And despite uplift in sales with the release of the latest Mariokart, the console still remains dead last in terms of its success this generation. Analysts have continued to predict that the Wii U will struggle for the remainder of this console cycle, with a price cut required for it to compete at all.

Conclusion

It’s an apparent reverse of fortunes. Sony, humble after their defeat last gen, have started strongly with the PS4 and continue to make inroads this generation. Nintendo, sure of themselves (and cocky some might say) after their successes, have struggled to compete.

Still, it is too early to say who will emerge victorious. Sony has the upper hand, but will need to remain focused if they are to take the crown and regain the console war throne. Nintendo and Microsoft can still get back in the fight; if they can create great games – must have IP’s – then they have a chance at challenging Sony for the Win.

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