Recently, Sony and Microsoft both released their newest gaming console, the Play Station 4 and the Xbox one. Before the release, there were several spec releases and features slowly being revealed throughout many conferences. Both companies used this opportunity to understand the competing model, and they decided whether to make changes to their product accordingly. Price had been a critical issue with the last generation consoles, the PS3 and Xbox 360. The PS3 debuted with a price that limited initial customer uptake, but subsequent prices drops led to increased consumer enthusiasm.
The Xbox one however was set to launch at a 100$ premium over the PS4, because they required an additional purchase of their Kinect motion sensor. The price was a huge factor in previous generations so the PS4 decided to make their motion sensor, the Playstation move, as an optional purchase, which is why the PS4 can aim for a cheaper price. Xbox has billed the Xbox one as a multimedia device and is positioning the machine as an entertainment system rather than a video game console, allowing the Xbox one to be basically a computer, video game console, blue ray player with sound commands and ability to recognize gestures.
Sony responded in the next conference by Playstation CMO Guy Longworth. He said, “We give [gamers] what they want. We don’t give them everything, because we don’t think they want everything. ” Sony focused on the gaming aspect of the console, when Microsoft focused the wider range of consumers. This competition between these rival companies is game theoric, because they are both releasing content that is similar with each other. It is by their strategy and features they decided to add or take out that allowed them to have an edge against their competitor.
This game is both simultaneous and sequential, because during development, both companies wouldn’t know what each other is building towards to, using which specifications for their model. However, around a year before launch, due to promotional issues, they started to slowly unveil features and pictures of their product. During that time, these two companies have time to tweak their machine. Xbox one originally was set to be only usable online and motion sensors would always be on.
Sony did not have this kind of feature and Microsoft’s choice to employ that feature caused them to lose consumer interest in their product, so they removed the feature before launch. Prices were changed as well, when Sony decided to make their motion sensor optional when Microsoft made theirs mandatory. The competition is more price sensitive. Quantities are not as big of a factor, since both machines used up their stock just to satisfy preorders. It is a repeated game, because these two companies have to continuously bring out new content for users, either a new software patch or a new system a few more years from now.
Each decision they make will in turn affect what the other will make. For example, since Sony was the powerhouse of the gaming console industry. Xbox entered the market by getting some very good exclusive rights to games from Playstation and that they targeted to be system fit to do anything, not just gaming. These two big corporate giants have battled against each other for over a decade, each adapting to each other’s decisions. Let us see what surprises these companies will show us next.
