What Do Big Software Delays Mean for the PlayStation 4 and Xbox One?

As gamers have tired of the available consoles and mobile has continued to dominate the casual market, console gaming has seen a contraction over the last year. This should change with November's upcoming console launches. Early reports suggest that both Sony's PlayStation 4 and Microsoft's Xbox One will sell all of their available launch stock, indicating that there is enthusiasm behind the respective product launches. A successful debut has not historically guaranteed a thriving platform, but in the changing gaming industry there is shrinking room for error. Could major software delays impact the long-term success of next-gen consoles?

Sit back and watch
French publisher Ubisoft recently announced that its Watch Dogs would slip from a November release to an unspecified date in June 2014. The title was one of the earliest used to show off the potential of next-gen graphics performance and, as Ubisoft's most high-profile foray into new AAA IP since Assassin's Creed, was key to the company's health. Consumers who purchased a Watch Dogs PlayStation 4 or Xbox One bundle should still be able to get a system, but the game's absence hurts the overall quality of each system's launch lineup. It is also seriously problematic for Ubisoft's generational outlook.

News of software delays from the company sent its stock plummeting 26%. The company also pushed the debut of its online-oriented racer The Crew from a fourth-quarter release into its next fiscal year.  Making matters worse, Ubisoft expects Assassin's Creed 4: Black Flag to sell only 10 million units, two million less than Assassin's Creed 3 despite launching on additional platforms that are supposed to reinvigorate the industry. The company's behavior and statements indicate that its premier titles are suffering from franchise fatigue and that its new properties either are not ready or are not strong enough to compete.

Everyone gets a dog
While Watch Dogs will also be available on the Xbox 360, PlayStation 3, PC, and Wii U, it has long been touted and featured as software that would drive interest and adoption in Sony and Microsoft's new consoles. Moving the title will likely be beneficial for its sales as it was set to launch against Ubisoft's own Assassin's Creed 4, but suggests the game wasn't ready for a spotlight battle with the record-breaking Grand Theft Auto 5. The PlayStation 3 was the best selling console in September on the strength of a GTA5 bundle. Microsoft's Xbox 360 had previously outsold the PS3 in North America for 32 consecutive months. Strong lineups and low prices make current-gen systems more appealing amid delayed next-gen software.

Join the club
In what could be the first apparent major fault in Sony's next gen strategy, its social racer DRIVECLUB has been delayed from the console's launch to an early 2014 date. A slightly pared-down version of the game was slated to be included with a subscription to Sony's online service platform, PlayStation Plus, with a full version available at retail or through the PlayStation Store. Most reports indicate that DRIVECLUB's delay had nothing to do with strategy and everything to do with the game not being done. It is likely better that an incomplete product not be shipped and maintained through patches, but it's undeniable that the absence of a solid DRIVECLUB hurts PlayStation 4 and PlayStation Plus.

After watching Microsoft mine the Xbox Live revenue stream for two generations, Sony wants in on the paid online service game. As retail console revenue has deteriorated, Microsoft has seen excellent performance and growth from Xbox Live. Last quarter's transactional revenue saw a 20% increase that helped to propel the company's Entertainment and Devices division to 8% growth and $134 million in net revenue despite lagging console sales. The real "winner" of the next-generation console race will likely be evidenced by which device has the more successful online platform. A lot of that will come down to installed base, though quality of online experience is certain to be a synergistic factor in determining market share. 

Minus one for PlayStation PlusDRIVECLUB's delay is good news for Microsoft's Xbox One. It gives the system, which will launch with the exclusive Forza 5, a leg up in the racing genre and shows that Sony doesn't have everything as together as it may have appeared. In place of DRIVECLUB, Plus subscribers will now get free access to Contrast, a single-player film noir platformer from Compulsion Games. While it may be a fine game, the title is hardly ideal for pushing community and user integration on PlayStation Plus.

With looming hardware entrants and increased interest in the home gaming market from the likes of Valve, Apple, Google, and Amazon, the established platform holders need to be especially on point. If either the Xbox One or PlayStation 4 fails to find early success or loses steam quickly, it could be tough to make up ground. The Watch Dogs delay is more damaging for Ubisoft than either console, but DRIVECLUB's slip makes Sony's proposition a little weaker. 

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The article What Do Big Software Delays Mean for the PlayStation 4 and Xbox One? originally appeared on Fool.com.

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