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Talkingship – Video Games, Movies, Music & Laughs | April 25, 2019

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No, Sony Have Not Won the Console Wars

No, Sony Have Not Won the Console Wars

Today, Sony announced they sold 4.2 million PlayStation 4s worldwide in 2013. This is, inevitably, compared to the Xbox One, 3 million of which were sold in the same period (give or take a few days, based on release dates). Of course, everyone looks at these figures and thinks that Sony have clearly won the console wars. They’ve sold 1.2 million more consoles, after all! Game over!

Except…no. That’s a huge error in logic. Because what almost everyone is forgetting is the difference in price: the Xbox One costs $100 more. And basic economics tells us that when prices are higher, demand is lower. Obviously. So it would be ridiculous to expect the X1 to have sold as well as the PS4. These figures should surprise no one.

This decreased demand is made up for by the increased revenue, however. I’ve run the numbers, and calculated that Sony sold about $1.68 billion worth of consoles, whilst Microsoft sold about $1.50 billion. That’s assuming an average RRP of $399 and $499 respectively, which is obviously not correct (prices are higher in other territories). This is a different of $180 million: a not-insignificant difference, but hardly game-changing when we’re talking about billions. To put it into perspective, that difference is just 12% of Xbox One’s total revenue.

But that’s not all. Of course, Microsoft and Sony have different profit margins on their products. Microsoft make $28 per console, resulting in a rough profit estimate of $84 million. Meanwhile, Sony squeezes just $18 out of each PS4, leading to noticeably lower profits: just $75.6 million.

Now, I’d ask you to bear in mind that companies exist to make profits. That’s the end game: making lots of money. Not having loads of users. Not making the best games. Not having a marginally higher resolution and frame rate on Battlefield 7: Death Killing Edition. Making money. And what we see from these figures is that Microsoft are, at this point in time, making more money from Xbox One sales than Sony are from PS4 sales. Almost $10 million more. And I think those numbers do a much better job of showing the real winner of the console wars than some sales stats.

  • Me

    This is inevitably what?

  • bob

    You’re forgetting software revenues, which Sony is selling a good bit more of judging by NPD and UK software charts. Consoles make most of their money from Software sales, not Hardware sales.

  • Oxybelis

    Idiot. Console manufacturers profit on software, not hardware.
    More consoles sold == more software sold.

  • Shaxterisanidiot

    This is the dumbest thing I’ve ever read. Sony and MS don’t expect to make money on the console itself, it’s all about selling games + services, that’s where the money is made. It’s all about getting as many consoles into people’s homes as possible in order to sell more and more games and subscription services. 1.2 million more consoles sold is significant.

  • Umad9000

    The author seems mad….and a little bit illiterate.

  • TheVoiceOfReason

    You’re calling people childish names, so your point must be valid.

  • Diago

    Whaha yeh he’s mad.

  • brianc6234

    You’re wrong. This battle is over. Sony has won.

  • Jano Torres

    PS4 Games are outselling the XBone counterparts… Sony already won.

  • Trent Seely

    Both console manufacturers are making barely any money off hardware; what is important is software sales. This should be obvious. Why is this even a discussion point 2 months into these consoles lives? Talk about this in three years.

  • True gamer

    Also 3 million at 499.99 in 13 countries vs 4.2 million at 399.99 in over 50 countries = MS doing at LOT better than many thought or Sony fanboys had hoped.

  • WaterFaster2012

    LOL! This author is hurt. You can feel the pain in his article. ROTFLMAO!!! Now having said that, the OP seems to forget that with each Xbox One sold, Sony gets a percentage of the sales profit, because they’re using Sony’s Blu Ray technology in their consoles. lol

  • HalfBlackCanadian

    Sony is out in more markets as well, meaning the only new next gen this past holiday season… that has its effect.
    Cheaper in US and UK is a win in those markets, availability in 37 (?) more markets is sales as well.
    Additionally, these are both holiday sales and early adopter sales. The hype for both of those markets leaned HEAVILY in Sony’s favour, so the fact that as many Xboxes sold at all is a success in and of itself.

  • the7thlevl .

    You’re an idiot. Console manufacturers make the bulk of their revenue from software sales. So the more systems sold, the more potential games sold, hence more profit, which is why most companies sell their launch systems at a loss, to get as many in homes as quickly as possible. Sony now have the ability to sell a POTENTIAL 1.2 million more copies of every 3rd party title.
    In addition, this is the total opposite of what Xbox 360 fans were screaming when the 360 came out a year early and at a lower price than the PS3. Tables are turned this gen, and now the logic has switched too. This reads like poorlythought out fanboy spin.

  • Aiddon

    that is kind of the funny thing when it comes down to it; actually revenue numbers aren’t as exciting to the masses as units are. Furthermore, we’re going to be entering the inevitable 1st years doldrums. We’ll see how much it can sustain itself. Not going to hold my breath for anything other than what history has proven.

  • Jimbob

    Funny the author doesn’t take into account software sales or the fact that around Xmas you could not find a PS4 to buy as most retailers didn’t have the stock. But don’t let facts get in the way of of clickbaity article

  • http://www.paulogy.com Paul

    This article is ridiculous. Video game hardware profits are basically worthless compared to the software and service subscriptions, which is driven by the install base. And as of the end of 2013 Sony’s PS4 is in 40% more homes. That’s huge.

  • HalfBlackCanadian

    That cut is a lot less than you would think, considering its split with at least Panasonic (I believe) who co-developed the tech. There’s likely a patent or two going the other way as well. This is no different than iPhones using Samsung parts for years or Sony music being available on Xbox Music. These contracts can’t be exploited because of competition… they are what they are and amount to little in the grand scheme.

  • ThisGUY

    Because the Xbox brand has been historically strong in those other 37 countries, right?

  • ThisGUY

    The point stands on its own. The name-calling is immaterial to the argument.

  • Dion Abbott

    LMAo, conveniently leaves out the software advantage of selling more units. They make the most off software, of which sony has sold a lot more idiotic article.

  • Dion Abbott

    no, ms launched in their biggest countries, the small terrotiries make up a tiny portion, you don’t sell the same number of consoles in Saudi Arabia as the US LOL. Not eveyr country ois equal.

  • TheVoiceOfReason

    Actually, one might say name-calling nullifies the point.

  • EchoedTruth

    U MAD BREH?!

  • George

    TalkingShip… this site should name TalkingSHIT. That’s more accurate.

  • Minions

    Sony is sold out everywhere… can’t meet demand. Microsoft consoles are sitting on shelves in their biggest market. I think it is hard to deny, a simple drive to a few stores reveals just how many Xbox Ones are available. I have no doubt in my mind if Sony could meet demand the gap would be much, much larger. I will admit the launch lineup for the PS4 is worse than that of the Xbox One. However this will be resolved in the first half of 2014 so it is really not a huge issue. You will see the gap widen substantially when Sony launches in Japan later this year…. a market that Microsoft substantially loses money each generation, yet continues to support.

  • Dennis Crosby

    He forgot to mention the main reason Sony has sold more consoles then Microsoft. The PS4 is available in 49 different countries and the XboxOne is in 13. that a huge advantage for Sony but for Microsoft to be in 13 countries and only be down 1.2m that very impressive. Both are asking very well and that all that really matters

  • Dennis Crosby

    No Microsoft pays $10 for every XboxOne is made to Phillips for the Bluray drives

  • gabbi

    Lets not forget that the PS4 is sold out almost everywhere so It could have sold wayyyy better

  • Tony McQueen

    Who gives a shit. I own both.

  • figgycal

    He’s not wrong. It’s just comical.

  • mike larry

    lool mmm your xbot tears taste sour

  • mike larry

    Oh and the war is over SONY PS4 has won and the xbox is the personal bitch of the superior ps4

  • Artboy

    Will be interesting to see if japan can add 500k + units at launch. They could even hit a million there in the first 2-4 weeks. This would help them towards if not over 6 mill sold if sales continue at current pace.

  • Juca

    Hahahahaha funny article.

  • Dion Abbott

    LMAO NO, those territories are very small, MS already launched where MS gets 90% of sales……………….You think Venezuela sells the same amount as the US and UK??? You are clueless obviously

  • kevin

    God your brilliant, great read and very insightful.

  • Dion Abbott

    He is flat wrong…………….

  • ThatGUY

    One might. And one would be wrong.

    “Hey dipshit! The sky is blue!”

    Calling someone a dipshit doesn’t turn the sky orange.

  • TheVoiceOfReason

    True, but it definitely makes me stop caring what the person has to say.

  • Xbox Doge

    wow. much salt. very spin. wow.

  • cozomel

    That’s cause your a thin skinned idiot

  • cozomel

    This shaxster is probably either a MS fanboy or a paid schill, stupid article, stupid reasoning, stupid point. MS fanboys are trying to hard to mask the fact they are getting their ass kicked

  • TheVoiceOfReason

    Again with the namecalling. If I didn’t know any better, I’d say this site is filled with school children.

  • Holyfire

    Pfft, Nintendo makes more money by a vast margain than SCE or XBOX division. Posting thus far one singular annual net loss in 3 decades. So there you go.

  • http://www.vgchartz.com SuperChunk

    Stupid article is stupid. Glad I came here with ad-blocking widget.

  • XBOXNED

    NOT IF YOU SEE THIS PIC

    http://postimg.org/image/e74xhuntj/

  • William Downie

    I have PS4 and love it but do some research Sony do not own Blu Ray a number of companies do MS give Sony nothing

  • William Downie

    I have PS4 but loved my 360 so I tend to stick up 4 MS so please explain your statement,countries MS has yet to launch in and last gen sales in those countries pls All 37 if your so clued up

  • Richardo

    Actually Sony is in a better position profitablitiy wise,because those 1.2 million extra customers means more money over the long term from higher software attachment rate. Its wrong to just compare console manufacturing cost and you should factor in what those actual customers will mean. Customers will give Sony more profit through 3rd software party royalties, 1st party title purchases, accessory purchases and PSN subscriptions. Right now attachment rate is low for software but over the course of 6-9 years you are talking a nice bit of profit Microsoft would like to have.