Don’t expect big thrills in China’s looming console war

13 Mar 2015 | Author: | No comments yet »

Don’t expect big thrills in China’s looming console war.

When Sony’s PlayStation 4 finally enters mainland China this month, it will bring a major global console fight to a country that hasn’t seen one in a long time. Since Microsoft Corporation (NASDAQ:MSFT) entered the console industry, they have been able to grab a significant share in the American market, even if their influence has been relatively lower in other markets, most notably Japan and Europe.Consumers spent $955.6 million on new games, hardware, and accessories in February, up eight percent from the amount spent over the same period in 2014.Research Firm NPD has announced their report on hardware and software sales for the month of February 2015, not surprisingly Sony’s PlayStation 4 continues its dream run as “Best Selling Home Console” beating Xbox One once again. “Demand for PlayStation 4 remains incredibly strong in the U.S. as it was No. 1 in hardware and software sales in February, according to the latest NPD report,” a Sony spokesperson said in a statement. “PS4 remains the cumulative leader in hardware sales with more than 20.2 million units sold to consumers worldwide demonstrating the fastest growth in PlayStation hardware history.” Nintendo also shared some impressive figures in a statement to our friend at VentureBeat.

Game consoles were banned in China from 2000 until 2013, but as the PS4 goes up against Microsoft’s Xbox One in China it will face myriad other challenges including disinterest. In this day and age of games being released in various states of brokenness, if a game, even one we’re dying to play, decides it needs more time, we’re more than happy to allow them a while longer to get it right.

This was heavily incorporated into the design and positioning of Microsoft’s Xbox 360, which offers consumers the console not only for games but for other entertainment mediums like movies, music and shows. Now these are the lifetime sales and since everyone released at a different time we’re only looking at a graph from November 2013 where the Wii-U had a solid lead and the PS4 and X1 were neck and neck.

The game needed more time to be the “high standards” of the series, according to Naughty Dog, though I can’t imagine it helped that the game was plagued by a series of high profile departures last year. In any case, we turn to the old Miyamoto pearl of wisdom “A delayed game is eventually good, a bad game is bad forever,” with the eternal caveat, “except Duke Nukem Forever.” While I agree that it’s best for everyone if Uncharted 4 takes its time in order not to taint the series with an underwhelming installment, this is a pretty big deal for Sony. For one, the two consoles won’t have competing distributors, meaning there’s less pressure to sell. “PS4 and Xbox One are ultimately distributed by the same company, Shanghai Media Group (SMG), which is 50 percent owned by the government,” Lisa Hanson, an analyst with Niko Partners, said via email.

Offerings and experiences will continue to expand with Xbox One and Halo: The Master Chief Collection available together for $349, new games launching this month including ScreamRide and Ori and the Blind Forest, hundreds of new ID@Xbox games in development, and plans to make gaming even better on Windows 10 and Xbox.” 3DS was the top-selling hardware platform in February, thanks largely to the launches of New 3DS XL, The Legend of Zelda: Majora’s Mask 3D, and Monster Hunter 4 Ultimate on February 13. The Xbox One started pretty poorly and then in October 2014 it really kicked off thanks to a holiday price cut and currently stands at 11.64 million units.

In fact, on the day of its unveiling, May 21, 2013, Microsoft put the main focus of the console on non-gaming features such as the ability to watch TV directly, control fantasy leagues, use Skype, the console’s voice functionality and the ability to watch movies. However while the war is ongoing it’s looking like a battle between America and Vietnam with the big brawny Microsoft representing America, obviously, and the little PlayStation 4 smashing them in every way possible. PlayStation 4 kicked off well and hasn’t let off the gas yet, currently sitting at 20.22 million and has continuously extended its lead over both the other competitors. Since the government restricts graphic violence and other themes on all gaming platforms, there is a limited number of titles available for the consoles.

Microsoft was also heavily criticized for their DRM policy whereby consumers were not allowed to use second-hand games, and were required to be connected to the internet at all times. As both are expected to be region-locked, meaning the machines can only play games released for China, the domestic availability of titles will influence demand. They wanted to make a console that would incorporate the STEAM model whereby games would be mostly bought digitally; and a console that would replace other technologies at home like a TV receiver, Blu-Ray player, etc. Those gamers would find the 2,899 yuan (US$463) up-front price of the PS4 too high, not to mention the Xbox’s 3,699 yuan without Kinect, which turned off local gamers last year. Additionally, life-to-date sales of Super Smash Bros. for Wii U and amiibo have surpassed 1.5 million total units and 3.5 million figures, respectively, with an attach rate of nearly 2.5 amiibo figures per game unit sold.

Grey market consoles will likely be unlocked, meaning they can play games that will be restricted on the officially sanctioned versions of gaming consoles. It’s one more thing that makes the official release less attractive to serious gamers Meanwhile, Android-based TV set-top gaming devices, which are relatively cheap and gaining ground, are another option. And Halo 5: Guardians is essentially Microsoft’s own Uncharted, their biggest franchise finally coming to the next generation of consoles with a brand new installment.

What I’m wondering now is if Microsoft will stick to their stated release plans for Halo 5, or if they’ll use this opportunity to also delay the game, given that pressure’s off from Sony. Xbox’s new boss, Phil Spencer has spoken a lot about how the company has listened to its fans and will solely focus on providing them the best experience. I think they would be wasting a big opportunity if they did that, but then again, no matter what, we cannot see 343 repeat the launch disaster of Halo: MCC in any capacity. Its recent sales in the United States have been higher than that of PS4 and it won the crown of being the top selling gaming device of Christmas 2014.

Right now we’re in “fall plus” season, where all the highest profile games of the winter/spring were once meant to come out in the fall, from The Order to Evolve to The Witcher. In a two horse race, thanks to Nintendo’s troubles, Microsoft might be happy to stay second but it will want to make sure the margin of defeat is not too big. If that was the case, and Microsoft didn’t delay either Tomb Raider or Halo 5, they could run the field on both Sony and even Nintendo in terms of holiday exclusives.

But this could be a big fall for Microsoft, a way to finally grip the masses by their shoulders and shake them while yelling “Why do you want a PS4? Both companies have struggled with putting out an effective line-up of exclusives to date, but now, Sony has put themselves in a position where it’s going to be two and a half years before their biggest exclusive title is released. An example can be taken by looking back at the last generation, when Sony lagged behind for a significant period of time and bounced back by managing to ship out 90 million units of the PS3.

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