Xbox One is priced a bit too high
Sony Corporation (ADR) (NYSE:SNE) smashed the ball out of the park when it announced the availability of PS4 at just $399, $100 less than Xbox. This move really pleased gamers as well as analysts. Microsoft priced the system so high because of its positioning as a home entertainment system. However, with this move Microsoft Corporation (NASDAQ:MSFT) has narrowed down its markets to just hard core gamers because part-timers would favor a cheaper pure gaming console. Thus, PS4’s pricing strategy has definitely taken away a considerable chunk of market share from Microsoft, and if it manages to engage and retain users with new software and games, Xbox One could be in a risky position.
Industry analysts have suggested that Microsoft Corporation (NASDAQ:MSFT) can offer alternative pricing options for Xbox One, once it properly assesses the target audience for the product. As this report states, PS4 outnumbered Xbox One in terms of pre-orders from major online retailers in the country. While it is not a definitive metric for forecasting future sales, it indicates that gamers are more inclined towards PS4 after the expo.
Gain for GameStop
Investors in GameStop Corp. (NYSE:GME) were uncertain about the stock after ambiguity surrounded Microsoft’s stand on used games. As I mentioned in my last article, a major chunk of GameStop’s revenue comes from buying used games and selling those at a mark-up. As a result, its “used games” business was under a threat if Microsoft Corporation (NASDAQ:MSFT) actually started to charge a fee for playing used games. However, the company can heave a sigh of relief with the announcements from Sony Corporation (ADR) (NYSE:SNE) and Microsoft on not charging a single cent on trade and resale of used games.
Shares of GameStop Corp. (NYSE:GME) surged after major conferences at E3 2013, indicating a revival of confidence in the stock. The intense console war, launch of new game titles and no restrictions on used games have all come as a boon to the leading retailer. In my opinion, GameStop Corp. (NYSE:GME) is going to move up quite aggressively in a short time period and stabilize thereafter.
Who leads the race?
Microsoft Corporation (NASDAQ:MSFT)’s recent changes to the policies around used games and online presence have hugely altered the situation of this console war. While PS4’s “launch edition” units were sold out by June 13 on Amazon because of its outstanding E3 conference, Xbox One has now grabbed the No 1 spot on Amazon’s list of best-selling video game products in the UK after the fixes. I believe the actual battle has just started with both of the manufacturers on the same page. As such, it is extremely difficult to point out a winner accurately until we have more data on sales numbers.
It’s been a frustrating path for Microsoft investors, who’ve watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market.
The article The Gainers and Losers After E3 2013 originally appeared on Fool.com.
Mihir Mehta has no position in any stocks mentioned. The Motley Fool owns shares of GameStop Corp. (NYSE:GME) and Microsoft Corporation (NASDAQ:MSFT). Mihir 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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