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How Are PlayStation 5, Xbox Poised Before Launch?

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How Are PlayStation 5, Xbox Poised Before Launch?

The biggest consoles-launch in the $145 billion gaming industry comes next week as Microsoft Corporation's (NASDAQ: MSFT) Xbox Series X and Sony Corp's (NYSE: SNE) PlayStation 5 (PS5) go on sale on Nov. 10 and Nov. 12, respectively, reports the Financial Times.

Timing: The timing of the launch during the pandemic is unique in two aspects. First, the coronavirus pandemic allows the companies to push their games in the absence of other forms of entertainment like live music, sport, and cinema, according to Astris Advisory analyst David Gibson.

Secondly, the launch buzz and optics of a big crowd trying to get the product will be absent, and most of the marketing and pre-ordering systems have moved online, according to Ampere Analysis's game analyst Piers Harding-Rolls.

Pricing: Sony's latest PlayStation will cost $499 — $100 more than the popular PS4 console. The diskless version of PS5 will cost $399. 

Microsoft's Xbox will compete at the same price point of $499 and sell a digital-only version at $299.

Outlook: Sony intends to sell more PS5s from the launch through March 2021 than the 7.6 million units of PS4 sold in the equivalent period, according to Sony's PlayStation chief Jim Ryan. 

The company laid out an ambitious target of 100 million units of the PS5, as the pandemic continues to fuel the gaming industry. With people spending more time at home, the game sales and subscriptions to its PlayStation Plus service have increased.

On the other hand, Microsoft's gaming chief Phil Spencer doesn't look at unit sales but the number of players and how long they spend on gaming as essential metrics.

Spencer adds that both companies will be supply-constrained and not demand constrained due to the pandemic's logistical restrictions. 

Microsoft had warned investors that the Xbox launch would impact gross margins, FT noted. The company is fine subsidizing the console prices to gain a customer in the Microsoft ecosystem.

Spencer said that the battle for console demand would happen next holiday season and beyond.

See Also: Which Video Game Console Maker's Stock Will Grow The Most By 2025?

Photo Courtesy: Wikimedia

 

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