The video game industry has been one of the fastest growing industries of the last few years, and the competition among the video game manufacturers, such as Sony and Microsoft, has increased as much as the video game industry itself. According to market research firm NPD Group, U.S. video game sales of software, hardware and accessories were up 19 percent to $12.5 billion in 2006 from 2005 [1]. The top two video game platforms from the last year were the Sony PlayStation 3 and Microsoft Xbox 360 [2].
Sony vs. Microsoft
Last year, Tokyo Microsoft Corp. introduced an external high-definition DVD player for the Xbox 360 video game console to match the Blu-ray disc capability of Sony Corp.’s PlayStation 3 [3]. The basic Xbox 360 does not come with the capability to play high-definition DVDs, but Microsoft launched their new peripheral which is based on HD DVD standard, which is a rival technology to Blu-ray, in a short period of time. In addition, Microsoft also announced that there will be 110 game titles available for the Xbox 360 in Japan by year's end, addressing a common complaint by video fans who said PlayStation offered more choices [4].
Sony also put some enormous amount of effort to widen the gap with Microsoft in the game console market. For example, even though Sony had to postpone the launch of the PlayStation 3 (initially planned for earlier 2006) twice, it had a built-in HD player when it was launched [5]. The fact that the PlayStation 3 had a high definition DVD capability was one of the most pronounced differentiating factors when compared to the Xbox 360.
The two companies continue to put new and unique features into their game consoles to differentiate their platforms and to ultimately win market share against each other. In addition to HD playing capabilities mentioned above for the PlayStation 3, it also features a browser with built-in Wi-Fi connectivity. In addition, Sony has permitted advanced computer and technology users to install additional operating systems such as Linux onto the PlayStation 3 [6]. This is a rather surprising move by Sony since game console manufacturers have been closely guarding their hardware traditionally. On the other hand, the Xbox 360 has a thriving online community and supplies a video download service unlike the PlayStation 3 [7]. The time magazine reports that “both the PS3 and Xbox 360 have talent beyond their ability to give gamers their fix. Where the PS3 has a remarkable aesthetic elegance, the Xbox 360 has a rugged connectedness [8].”
Who will win in the future?
I predict that there is a high probability that Microsoft will come out as the market leader in the video game industry in the future because I think that Microsoft’s response to the market trend is more appropriate than the one by Sony at this point. I believe that the seamless integration of various entertainment experiences such as watching movies, listening to music, and playing video games will become the most important factor for video game customers in the near future, and Microsoft has a lead in this area at the moment. For example, the Xbox 360 is all about the network. Xbox 360 knows about your music collection, and if the Xbox 360 is connected to your home network via Ethernet, you can quickly pull up tracks from PCs around the house [9]. In addition, according to the Time magazine, “you can also stream photos and videos, although not all formats are supported and the photo browsing, while thorough, lacked the sophistication of the PS3 [10].” Furthermore, I believe that Microsoft has the financial strength and software technology know-how relating to networking to ensure their victory over Sony in the future.
Reference
[1] Neowin.net. “Statistic of Video Game Market (2006)”
Internet: http://www.neowin.net/index.php?act=view&id=37093, Jan. 12, 2007 [Feb. 1, 2007]
[2] TMCnet. “Playstation3 Defeats XBox 360”
Internet: http://blog.tmcnet.com/blog/tom-keating/gadgets/playstation3-defeats-xbox-360.asp, [Feb. 1, 2007]
[3] International Herald Tribune. “Microsoft ups Xbox defenses vs. PlayStation and Nintendo with HD-DVD add-on”
Internet: http://www.iht.com/articles/ap/2006/09/20/business/AS_FIN_COM_Japan_Microsoft_Xbox.php, Sep. 20, 2006 [Feb. 1, 2007]
[4] International Herald Tribune. “Microsoft ups Xbox defenses vs. PlayStation and Nintendo with HD-DVD add-on”
Internet: http://www.iht.com/articles/ap/2006/09/20/business/AS_FIN_COM_Japan_Microsoft_Xbox.php, Sep. 20, 2006 [Feb. 1, 2007]
[5] International Herald Tribune. “Microsoft ups Xbox defenses vs. PlayStation and Nintendo with HD-DVD add-on”
Internet: http://www.iht.com/articles/ap/2006/09/20/business/AS_FIN_COM_Japan_Microsoft_Xbox.php, Sep. 20, 2006 [Feb. 1, 2007]
[6] TIME. “Sony PlayStation 3 vs. Microsoft Xbox 360 with HD DVD Player (Difference between Xbox and PS3)”
Internet: http://www.time.com/time/business/article/0,8599,1561414,00.html, Nov. 20, 2006 [Feb. 2, 2007]
[7] TIME. “Sony PlayStation 3 vs. Microsoft Xbox 360 with HD DVD Player (Difference between Xbox and PS3)”
Internet: http://www.time.com/time/business/article/0,8599,1561414,00.html, Nov. 20, 2006 [Feb. 2, 2007]
[8] TIME. “Sony PlayStation 3 vs. Microsoft Xbox 360 with HD DVD Player (Difference between Xbox and PS3)”
Internet: http://www.time.com/time/business/article/0,8599,1561414,00.html, Nov. 20, 2006 [Feb. 2, 2007]
[9] TIME. “Sony PlayStation 3 vs. Microsoft Xbox 360 with HD DVD Player Features of Xbox 360)”
Internet: http://www.time.com/time/business/article/0,8599,1561414,00.html, Nov. 20, 2006 [Feb. 2, 2007]
[10] TIME. “Sony PlayStation 3 vs. Microsoft Xbox 360 with HD DVD Player (Features of Xbox 360)”
Internet: http://www.time.com/time/business/article/0,8599,1561414,00.html, Nov. 20, 2006 [Feb. 2, 2007]
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