Coming this fall: Return of the video game console wars
By Kellen Browning
Even before the coronavirus forced the world indoors and glued millions of people to their screens, 2020 was shaping up to be a huge year for gaming.
Microsoft is set to release a new Xbox in November, and Sony is expected to introduce the next iteration of its PlayStation this holiday season. Both are big draws for video gamers eager to fire up the newest version of Halo or Spider-Man as they wait out the pandemic.
And as the ninth generation of consoles approaches, the cancellation of in-person events has created a surge of interest in gaming and is likely to juice their sales — even as their availability is expected to be limited by supply chain problems caused by the pandemic.
Roughly every seven years, companies release a fresh series of consoles with technological improvements — in this case, the PlayStation 5 and the Xbox Series X. Although they aren’t expected to be drastic departures from previous versions, there’s still plenty of hype for the holiday releases.
Gaming has become one of the biggest global entertainment industries, with 2.7 billion people projected to play a game this year, according to the gaming market researcher Newzoo. Growth has accelerated during the pandemic, and gamers worldwide are expected to spend nearly $160 billion this year.
“This launch is a massive moment,” said David Gibson, the chief investment officer at Astris Advisory, a financial advisory firm in Tokyo. “It is the largest and most important next-generation console launch ever.”
But Gibson said temporary factory shutdowns caused by the virus in several Asian countries, coupled with an increased worldwide demand for similar hardware components because of the rise in remote work, would most likely lead to a scarcity of Xboxes and PlayStations come November.
“It’s going to be really hard to find them,” he said.
The rectangular, black Xbox Series X will be released Nov. 10 for $499, Microsoft announced last week after months of speculation. The company also said it would release a miniature budget version, the Series S, for $299.
Sony has yet to announce a date or price for the PlayStation 5, a more curved, futuristic-looking white device, but said it, too, would release an alternative version.
Both consoles will have faster loading times for games and better graphics than their predecessors, though the Series X is anticipated to have slightly more powerful hardware.
Even with the supply limitations, Gibson expects Sony to sell about 5 million PlayStations and Microsoft 3 million Xboxes in the first five months. Game developers do not have the same hardware limitations, though, and are likely to benefit from the high console demand, he said.
Jacob Throop, a streamer for the professional e-sports organization Team SoloMid, said he played on consoles from both companies, as well as on Nintendo’s 3-year-old Switch, and would buy both new devices. He said most of his fans seemed to favor the new Xbox.
“I think the Xbox will be better,” said Throop, better known to his 1 million Twitch followers as ChocoTaco. “On paper, the specs are better, so it looks like it will be a more powerful machine.”
Many analysts, though, expect Sony to continue its historical sales advantage in large part because of the perception that the PlayStation offers superior games. And in August, the producers of Halo Infinite, the newest version of Xbox’s flagship game series, announced that the pandemic had delayed its release until 2021, rather than release it with the Series X.
“Having Halo at our launch would have been tremendous,” said Cindy Walker, an Xbox spokeswoman. But “we are not reliant on massive exclusive titles to drive console adoption. Our players will have thousands of games from four generations of Xbox available to play on launch day.”
Sony, which declined to comment on its coming release, has produced the three best-selling individual home consoles — the PlayStation 2, PlayStation 4 and original 1994 PlayStation — and is focusing on the strength of its exclusive games and brand recognition while promoting the PlayStation 5.
But Microsoft is signaling for the first time that it wants an end to the decades-long console war, or at least a truce.
Microsoft is putting a priority on flexibility and betting that the future of gaming will be mobile, with gamers spread across consoles, computers and even phones while on the go.
The release of the Series X is still a big moment for the company, but Microsoft is also highlighting the success of Xbox Game Pass — think a Netflix library for games — and a new feature, xCloud, which will allow users to play Xbox games on Android phones for $15 per month, starting Tuesday.
“Sony is focused on convincing gamers they need to get a PlayStation 5,” said Matthew Ball, the managing partner at Epyllion Industries, which operates a venture capital fund.
Rival companies are also sensing an opportunity to break into the growing market, and are experimenting with cloud gaming, a new technology that theoretically allows players to download and run games on any device using the strength of the internet — or cloud. The nascent feature could devalue expensive consoles, especially at 5G internet speeds.
Google Stadia, a $10-a-month cloud service that lets subscribers play games across devices, arrived in November but has struggled with bugs and graphics problems. Amazon has been said to be working on its own cloud gaming service, Project Tempo.
Microsoft’s response to these incursions is xCloud.
“We’re committed to bringing more games to more gamers around the world, and cloud gaming is a long-term investment for Microsoft and critical to making this commitment real,” Walker said.
Sony’s cloud service, PlayStation Now, was introduced in 2014 and lets subscribers play some PlayStation games on computers, but users haven’t been enamored with the feature, especially before Sony slashed the monthly charge in half to $10 last year.
Analysts said Sony’s more traditional thinking as the PlayStation 5’s arrival approached could pay off in the short term.
“Sony has tremendous strength following the eighth generation of consoles and will thrive in the ninth, but it is still applying the old playbook,” Ball said.