Why Microsoft Corporation (MSFT) and Sony Corporation (ADR) (SNE) to Worry

Well, it could be that they’re using the system more as an entertainment device. They’re using it to stream video and do some rudimentary Web surfing. This is fine. It adds to the value of the investment. However, what does it mean for Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (ADR) (NYSE:SNE) as companies that have typically subsidized the hardware in order to make it up on the software end if folks aren’t buying games anymore?

Sure, there’s some serious money to be made in the digital delivery of games. The Xbox One and PS4 come with meaty hard drives and cloud storage solutions. However, if folks are buying these new systems and then just streaming YouTube clips of skateboard-riding dogs, where will that leave these companies?

Folks aren’t buying new systems, and they aren’t using them the way they have in the past. Sure, Wii U’s sorry fate is a sloppy sample of one. However, no one should be surprised if hardware sales are challenged by cheaper Wii Us later this year. When software sales aren’t up to snuff next year as consoles become high-tech ways to consume content that folks have already paid for, don’t be shocked when Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (ADR) (NYSE:SNE) are flabbergasted at the freeloaders that they’ve attracted to their platforms.

The article 160,000 Reasons for Microsoft and Sony to Worry originally appeared on Fool.com and is written by Rick Munarriz.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.

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