Microsoft Corporation's Xbox One Looks Like a Total Failure
Microsoft may have a problem on its hands. Not Windows 8, but its latest video-game console, the Xbox One. Based on recent sales data, rival Sony's PlayStation 4 is significantly outselling Microsoft's offering -- in the U.S., at a rate of 2-to-1.
While a poorly selling Xbox One isn't great for Microsoft, investors in Electronic Arts could ultimately be the ones most exposed.
NPD data shows Sony dominating Microsoft
According to research firm NPD, Sony's PlayStation 4 was the top selling video game console in the US during the month of January, edging out Microsoft's Xbox One. VentureBeat puts the figures at around 280,000 for the PlayStation 4 and 145,000 for Microsoft's Xbox One. On a cumulative, global basis, Sony has sold about 5.1 million PlayStation 4s, while Microsoft has sold 3.4 million Xbox Ones, according to data compiled by VGChartz.
The discrepancy is even more notable in light of the fact that Sony still hasn't released the PlayStation 4 in its home market of Japan. At the same time, Sony seems to be struggling with supply constraints, as many retailers in the U.S. have completely sold out of their allotted shipments.
Moreover, the PlayStation 4 doesn't even really have any video games worth playing. As new consoles, neither the PlayStation 4 nor the Xbox One has a robust catalog of offerings, but with exclusives like Dead Rising and Killer Instinct, Microsoft's Xbox One seems to have the better lineup.
Why is the Xbox One struggling?
There are myriad of reasons to explain why Microsoft's console isn't selling as well as Sony's. But the most significant by far is the price difference -- at $500, Microsoft's console is a full $100 more expensive than Sony's machine.
That $100 difference is likely due to the inclusion of Microsoft's Kinect, an accessory most core gamers (the sorts of people likely to purchase a console early in its life) don't seem to want. At the same time, Microsoft's console is a bit less powerful than Sony's, giving the PlayStation 4 a slight edge in graphics.
Electronic Arts could be the one most exposed
The Xbox isn't really part of Microsoft's core business, so in that respect, the lack of sales shouldn't really have too much of an effect on Microsoft's bottom line. But one company that could see an impact is Electronic Arts.
Titanfall, arguably Electronic Arts' most anticipated game of the year, will be exclusive to Microsoft's Xbox One platform (it will also be available for the PC and the Xbox 360, but the Xbox One version has received most of the focus) There's also Plants vs Zombies: Garden Warfare, a game that, like Titanfall, will be exclusive to the Xbox One in terms of next-generation consoles.
With a lesser install base, it's possible that both of these games could be a retail disappointment, failing to generate the sales Electronic Arts had been anticipating.
Still early in the console war
That said, it's still early in the console war. Sony's last console, the PlayStation 3, was a retail disappointment early in its life, as consumers struggled with its high asking price. Ultimately, however, the PlayStation 3 was able to close the gap with Microsoft's Xbox 360, as Sony gradually cut the price and delivered a slate of quality exclusives. Maybe Microsoft will be able to pull off something similar.
Nevertheless, at least for now, Microsoft appears to be far behind.
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The article Microsoft Corporation's Xbox One Looks Like a Total Failure originally appeared on Fool.com.Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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