Microsoft Corporation (MSFT), Sony Corporation (ADR) (SNE): Which Next-Generation Game Console Has The Advantage?

For the PlayStation 4 Sony was sure to not make the same mistake. The price point is $399, $100 cheaper than the Xbox One, and the console never had any of the internet or used game restrictions which the Xbox One once had. The focus during the PS4 reveal was games, including a bunch of indie-games, unlike Microsoft’s focus on entertainment features

While the PS4 doesn’t have advanced features such as TV integration like the Xbox One it still sports plenty of entertainment options. Netflix, Amazon, and Hulu Plus applications are all included.

Given Microsoft’s missteps it seems likely that the PS4 will outsell the Xbox One, at least until the first round of price cuts. That advantage may be enough to ensure victory for Sony in this round of consoles.

The real winner

The real winner of the console wars may very well be Advanced Micro Devices, Inc. (NYSE:AMD). AMD is supplying both the processor and graphics chip for both the Xbox One and the PlayStation 4, as well as for the Wii U. This is good news for AMD, which has been struggling as PC sales have declined. The previous generation of consoles; including the PS3, Xbox 360, and Wii, have sold a total of about 250 million units worldwide. If the new generation matches or surpasses that number the impact on Advanced Micro Devices, Inc. (NYSE:AMD)’s financial results should be fairly significant.

The bottom line

MicrosoftMicrosoft Corporation (NASDAQ:MSFT) is going to have trouble marketing the Xbox One to non-gamers, as it appears to be doing, largely because of the price tag. When devices like the Roku sell for less than a fifth of the price and offer much of the same functionality it’s hard to imagine anyone who doesn’t play games buying an Xbox One. The PS4 is $100 cheaper, a big advantage, and Sony Corporation (ADR) (NYSE:SNE) avoided upsetting gamers with restrictive policies. Although the war is certainly not over, the PS4 has won the first battle.

The article Which Next-Generation Game Console Has The Advantage? originally appeared on Fool.com and is written by Timothy Green.

Timothy Green owns shares of Microsoft. The Motley Fool owns shares of Microsoft. Timothy is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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