“It might be time to clear some space in the living room, as new video game consoles arrive from Sony Corp. and Microsoft Corp. for the first time in seven years,” WSJ writes.
The Xbox Series X debuts Nov. 10 and will cost $500. It offers true 4K-resolution gaming, a built-in Blu-ray disc drive and a terabyte of internal storage. A cheaper version, the Xbox Series S, is available for $300, but it comes with no disc drive, less storage and reduced performance (no 4K).
- Microsoft is offering optimized versions of recent exclusives “Forza Horizon 4” and “Gears 5” on day one as it awaits the arrival of the latest installment in the Halo series next year.
The Playstation 5 launches Nov. 12 and will also cost $500. Its cheaper offering, the digital edition, costs $400 but is only missing the 4K Blu-ray disc drive. Both models will feature 825GB of hard drive space, which can eventually be expanded.
- Notable launch games include “Marvel’s Spider-Man: Miles Morales” and “Astro’s Playroom,” which comes included with new consoles.
In the past, console sales depended on a network effect. Users would pick whatever their friends played. But with cross-platform play growing in popularity, that’s not so much an issue.
- Console ownership as a whole might be fading anyway. Cloud-gaming services from Google, Amazon and Facebook could “one day make consoles obsolete, as users stream games over any internet-connected device, including laptops and phones.”
- Both Sony and Microsoft offer cloud gaming already, with the former on its consoles and the latter on Android phones and tablets.
- But cloud services are limited by their libraries for now, and consoles provide a much more comprehensive selection.
The Takeaway: It might be worth waiting and seeing — Sony and Microsoft have traditionally lowered console prices within a few years of release. Plus, developers need time to ramp up production, especially with Covid-19 hindering the pace.
Soak it in – this may be the last console refresh cycle where old-school purchasing dynamics (like buying because of friends) reign dominant. I believe that $SNE and $MSFT will see a healthy refresh cycle, but we don’t know how much of this expectation is baked into the stock yet.
In the future, the industry will be transformed by cloud gaming, which probably commoditizes consoles and increases the importance of gaming titles and cloud software experience. The winners will be the ones that deliver the best gaming experience and community to gamers. Will that be Microsoft, Sony, Google, Facebook, Apple, Nvidia, or Steam? Microsoft and Sony have the advantage of decades of video game experience and a pre-built network, so they’re starting with a leg up. But every king should always watch the throne.