How Microsoft Beat Sony This Black Friday

Summary 53% of console purchases this Black Friday were for MSFT Xbox One. Major demographic for Xbox One customers: families with kids. May not beat SNE this generation, but might not actually need to.

Hard to believe it's already been a year since people were lining up in the November chill to get their hands on the next generation of consoles. While last year's Black Friday served as the first test of the strength of each platform's marketing campaigns and game diversity (as well as the lingering strength of the previous generation), this was about seeing who can put up the best sales figures and end 2014 on a high note. While Sony's (NYSE: SNE) PS4 has had a vice grip on the top spot since last year, Microsoft's (NASDAQ: MSFT) Xbox One convincingly won the weekend for the second straight year, and may be in a stronger than expected position headed into 2015 thanks to existing console trends possibly working in the company's favor.

A more competitive price point

The Xbox One's rollout last year was about a bad as could be for a console. From the initial lack of reverse compatibility, to outright hostility at gamers' complaints at being unable to share games, to a price that was over $100 higher than the PS4, Microsoft had essentially burned bridges while they were still being built. Eventually, Microsoft backed off the $500 price point by releasing the console without Kinect at $400, and gamers became more willing to buy the console. Yet for hardcore gamers, it still made PS4 a more worthwhile console to own due to greater processing power as well as a slate of releases that are traditionally more suited for the hardcore gaming audience.

This Black Friday, Microsoft went further with a reduced $329 price tag for the console, as well as releasing several bundle packages of popular titles to win over customers. This was far more aggressive than Sony, which opted to go conservative this holiday season and let its console and exclusives do most of the talking.

Possibly thanks to this lower price point, and the bundle deals, the Xbox One came out as the big winner, capturing 53% of the console market compared to just 31% for PS4 and 6% for Nintendo's WiiU. For both consoles, this was nearly double the sales from last Black Friday for the new consoles, as shoppers still went for the old 360 and PS3 to play the last batch of games for that generation, arguably making this the first real holiday season for the new generation, which in total made up 90% of console sales.

Yet for Microsoft, these numbers are exactly what the company needed to show that they can still be competitive with Sony. After a long losing streak, having a good Black Friday can give the company some bragging rights this earnings, even though Microsoft is less dependent on video games than Sony.

Focus on the family?

Sony still leads the 8th generation console battle nearly 2-to-1 in sales (15 million sales vs. 8 million sales), but thanks to a lower price point this season, Microsoft was able to re-establish its typically strong relationship with casual gamers, a staple of the preceding two generations. According to Nielsen reports, 66% of Xbox One shoppers bought the console for their kids, compared to only 45% for the PS4. In consumer studies, 37% of kids aged 6-12 want an Xbox One, while 37% want a PS4. This is the only area where Microsoft is drawing level with Sony, which beats Microsoft in the teen (36% vs. 35%) and adult demographics (21% vs. 16%). This would seem like the Xbox One over-performed this season, but it may have been helped by 42% of shoppers saying they may own multiple platforms, an increasingly common trend. While these metrics may favor Sony in the long-run due to its popularity among larger groups of people, as well as with hardcore gamers, it still keeps alive the possibility that the Xbox One can stay with the PS4 if it offers a good casual gaming experience with broad appeal. The price reduction will give it a competitive advantage in this arena as well as it appeals to families with possibly tighter budgets for entertainment than hardcore gamers without families might have (55% of those who bought a PS4 this season bought it for themselves).

By itself, the Xbox One may not beat the PS4 this generation, but if the demographics of people buying Xbox Ones holds up, it does show a way for Microsoft to stay right on Sony in sales by tapping into its typical market. Hardcore gamers may still prefer the PS4, but there is definitely a demand for a cheaper, more casual alternative, and Microsoft appears to have figured that out.

Lokasi:

Share :