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New PlayStation and Xbox start selling this week. $ 150 billion at stake
09.eleven.2021 [12:56],
Konstantin Khodakovsky

This week kicks off an epic battle between Sony and Microsoft with the launch of new game consoles. PlayStation 5 (PS5), Xbox Series X and Series S makers are well positioned with increased demand for video games driven by COVID-19 quarantine measures. Today the gaming industry is valued at $ 150 billion.

According to industry experts, a large arsenal of games and a wider fan base of the Japanese company (after all, Sony sold more than 100 million PS4s, having won the battle in the previous generation) will preserve the advantage over its main rival – American Microsoft. “People who own an Xbox tend to buy a new Xbox, and people who own a PlayStation tend to buy a new PlayStation,” said Wedbush Securities analyst Michael Pachter.

Nevertheless, the industry is changing: for example, there is an increase in streaming games, which, with the presence of a high-quality Internet, makes it possible to do without powerful client equipment: all processing takes place on the server side. According to analysts, this could reduce sales of consoles in the coming years and benefit Microsoft.

The pre-order race for the new consoles actually started a few weeks ago. Sony PS5 reserves sold out in minutes on many retail sites, disappointing fans.

Sony has the edge right now, but the stakes are high for the Japanese company. The gaming business is a key source of money for her. In fiscal 2021, the gaming, software and services division accounted for nearly a quarter of Sony’s $ 77 billion in sales and generated nearly 30% of Sony’s $ 7.9 billion in operating profit.

Microsoft does not disclose the results of its gaming division, although it is a less significant part of the business for it than for Sony. The company does not disclose information on sales of its systems, but, according to analysts, the Xbox One family was sold with a circulation of about 50 million units.

PS5 will sell for $ 499 or $ 399 for versions with and without optical drive, respectively. Xbox Series X will sell for $ 499, and the simplified Series S – for $ 299. Analyst firm Ampere predicts about 5 million PS5s will be sold this year versus 3.9 million Xbox Series S and X, so cumulative sales of both systems will be higher than the previous generation in the same period.

Demand for Sony systems is supported by in-house studios with exclusives such as Marvel’s Spider-Man: Miles Morales. The new Xbox will not have too attractive exclusives: even the new part of the flagship Halo series has been postponed to next year due to the development of the pandemic.

But Microsoft has its aces up its sleeve: Xbox Game Pass subscribers are growing rapidly. Today the subscription offers over 100 games, including brand new ones, and has over 15 million users. Sony is reluctant to make its most popular games available through the likes of PlayStation Now, fearing it could hurt sales of high-budget games.

Industry experts say the pandemic, while fueling demand, is also limiting production at Sony and Microsoft. “Demand will outstrip supply, so there are people who won’t be able to get the console at first,” said analyst Piers Harding-Rolls at Ampere.

Sony announced that retailers like Walmart, Best Buy and Target will sell the PS5 exclusively online when it releases on November 12.

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