Current-Gen holds the Key in the Xbox vs PlayStation Battle

AMSTERDAM, 11 October 2013 - As all heads turn to the (pre-)sales of the upcoming nextgen consoles, Xbox One and PS4, the broader strategy of both PlayStation and Microsoft is easily overlooked. Continued use and sales of the current gen consoles Xbox360 and PS3 and their games could determine who comes out the overall winner. There are several reasons why Microsoft, deliberate or not, could well outperform Sony in the holiday season and the quarters to follow, despite lagging behind in the next-gen pre-sales charts.

What does the past tell us?

A look into the past provides hints of what may happen in the bigger picture…. Back in 2005 and 2006, Microsoft and Sony both took a very different approach in transitioning from one generation to another. Sony continued to publish games for the PS2 and produced the consoles up until the end of 2012. Microsoft more or less killed the Xbox within a year of launching the Xbox360 in 2005, forcing people to upgrade. The Xbox ended in 2006 with 24 million units sold. The PS2 continued to sell, pushing unit sales over 150 million. To refresh peoples memory, the PS2 outsold the PS3 for a period of more than three years following the PS3 launch….

Why could Microsoft come out on top?

Considering these historical facts, it’s no surprise that Microsoft have a completely different approach this time around. Not only that, it seems like they are purposely positioning the Xbox360 to do even more for the Xbox franchise as a whole than the PS2 did for PlayStation. This is illustrated by a number of facts including a price level that they could drop slightly below the current $199 or even to $99 in a (Xbox Live) bundle for the Xbox360. All major new game titles will also be launched on the 360. The current gen Microsoft console will even have its own exclusive launches, including triple A free-to-play titles World of Tanks and Cryteks’ Warface. Not to mention the fact that Xbox live and its proven monetization of Indie games, in-game business models, additional content and non-game media will run across both the Xbox One and the Xbox360. Second-hand trade will be less of a problem than it was for Sony’s PS2 because of the accelerated shift to digital… Considering this, it is bad news for Microsoft that their best-seller, Minecraft, will soon come to PS3 and PS4. Of course, Sony could also perform well with its PS3 but the company seems less focused in making it an integral part of their nextgen strategy…

Peter Warman, CEO at Newzoo adds: “Considering all the moves that Microsoft is making to back up the Xbox360, I have no doubt in my mind that in terms of unit sales it will be the top-selling console this season, killing the Wii and Wii U on its path. The current focus in press on pre-sales figures of nextgen consoles provides a very limited picture of the business. We should all make sure that investors and other decision makers outside our industry see the bigger picture….”

Will “core” gamers or the mass determine success?

No doubt, the most dedicated gamers will be buying a nextgen console. Newzoo recently stated that the US counts just over 24 million “core” console gamers that typically want to be among the first to own a new device. A large share of this group will actually buy both nextgen consoles, illustrated by the fact that around 30% of American Xbox360 owners also owns a PS3 and vice versa. The huge upside for Microsoft lies with the other “non-core” 64 million American consumers and a comparable number in Europe that currently play on Xbox, PS2, PS3, Wii or Wii U but not on the 360. These gamers are in no hurry to transition towards nextgen, but the Xbox360 could charm anyone who still wants something new to play with. The “core” gamers also have slightly less incentive to buy a nextgen console this time as the leap in game experience is smaller than last time.

Consumers, not devices, drive change. Who plays what?

The image below shows the number of gamers playing on a certain console in the US. At this moment almost 60 million Americans play on Xbox360 versus 46 million on PS3. The graph shows the impact of the early exit of the Xbox with a mere 10 million Americans still using the first generation Microsoft device now and again. PlayStation shows a completely different picture with the number of PS3 gamers surpassing the number of PS2 users just one year ago.

There is overlap between the categories as a lot of gamers play on multiple devices. Please note that the number of gamers is always significantly higher than the installed base as multiple friends or family members share a single console. Depending on country and device the number of players per single console varies between 1.5 and 3.5.

Who cares about nextgen?

PlayStation3 and Xbox360 are now level in unit sales at 80 million. Until the nextgen consoles reach comparable numbers, it are the current gen consoles that make the difference. And it seems that Microsoft has made the moves to put them on top, flying under the radar of most analysts who are so excited about new tech and retail sales, they forget the bigger picture… The future will tell and the future is near. It will be happy holidays…


About Newzoo

Newzoo ( is the leading global market research firm focused purely on the games market. The company provides its clients with a mix of primary consumer research, transactional data and financial analysis across all continents, screens and business models. Newzoo’s clients include Valve, SEGA, Plantronics, Wizards of the Coast, Incomm, Nvidia, GlobalCollect, Microsoft, EA, Coca-Cola and Visa/PlaySpan. 


Games PressGames Press is the leading online resource for games journalists. Used daily by magazines, newspapers, TV, radio, online media and retailers worldwide, it offers a vast, constantly updated archive of press releases and assets, and is the simplest and most cost-effective way for PR professionals to reach the widest possible audience. Registration for the site and the Games Press email digest is available, to the trade only, at