Xbox One vs. PS4 – The late game

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Microsoft’s understanding of the ecosystem is a big threat

  • In the next generation console war, the first round has emphatically been won by Sony.
  • The right pricing, strategy and marketing has led to the PS4 outselling the Xbox One 2 to 1 and there is no sign of that changing anytime soon.
  • While Sony has won the first battle, it has yet to win the war and Microsoft still looks incredibly dangerous.
  • Gaming is slowly becoming more of an online affair and the experience on the consoles is slowly spreading across other devices such as smartphones and tablets.
  • This means that the user experience on the console, other than selecting the game and pressing return, is becoming important.
  • Since launch Microsoft has continually updated the user experience and even went so far to put Phil Spencer (head of Xbox) on a podcast with some prominent Xbox gamers to discuss further developments.
  • In this podcast he discusses further improvements to the user experience outside of just playing games such as customisation, screenshots and backgrounds.
  • These are all small things but it is the little things that make the difference.
  • When I compare the Xbox One’s rich and fun user experience to the bare bones of Sony, I begin to fear for Sony in the long term.
  • The PS4 experience looks simply aimed at allowing the gamer to launch the game and little more.
  • Furthermore doing basic things like uploading a gamer photo or setting up payment is tortuous and frustrating. (see here).
  • When one is trying to develop an ecosystem, the user experience has to entice the user to stick around and explore what else is on offer.
  • This is how user loyalty will be generated and how an ecosystem will get its users to spend more time within its community.
  • Furthermore, the look and feel of that experience can then be replicated across other devices creating a feeling of ease and of being at home.
  • With the Sony PS4 user experience it is almost a relief to fire up a game as Sony has provided the user with no reason whatsoever to hang around and explore.
  • This is something that urgently needs to be fixed as a cool and fun user experience will be the foundation of Sony’s ecosystem and it needs to be present on every device it makes.
  • This is a major problem for Sony as the emphasis over time is going to move away from hardware and into the ecosystem and user experience.
  • Microsoft has made horrible mistakes with the launch of the Xbox One but it has learned its lesson and is now making real headway in developing the features and functions that are going to draw users and drive loyalty in the future.
  • As the user experience and ecosystem becomes more important and Microsoft levels the hardware playing field, Sony is going to look more and more out of date.
  • Sony has won the initial battle hands down but it is in danger of losing the war.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.

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