Microsoft has released the Xbox One sales figures for its 3rd quarter putting the Xbox One at over 5 million units sold since the platform’s launch. 1.2 million of those sales were in the last quarter sold through to retail stores. While PlayStation 4 evangelists will be quick to jump on the triumph train with their 7 million units sold through to consumers, several factors come into this announcement from Microsoft that should be considered before making a final conclusion. The Xbox One may have less units out the door than Sony’s PlayStation 4, but when you compare the big picture the perspective changes for the next-gen black box.
Games Industry International reported Microsoft’s 3rd quarter of fiscal year 2014 ended with $20.40 billion in revenue with a net income of $5.66 billion. In that number is 2 million Xbox console units with 1.2 of those being Xbox One.
“Xbox One has sold in over 5 million units since launch, and engagement has been high with users spending nearly five hours per day on their console,” said Amy Hood, executive CP and CFO, during Microsoft’s earning call.
The Xbox One and PlayStation 4 launched within a week of each other in November of 2013. Unlike the previous generation where the Xbox 360 had almost a year head start on the PlayStation 3, the companies were out of the gate at the same time, but with two very different messages.
The Xbox One was to be an all-in-one entertainment solution built around the Kinect while the PlayStation 4 was far more gamer centric in its marketing approach. And while both consoles have their strengths and weaknesses when it came to the hardware, Sony has had an indisputable advantage with hardware so far in this generation when it comes to performance of key 3rd party titles. But even with all this the Xbox One sales have been riding a wave of good will momentum from the majority of the gaming press in the wake of Titanfall.
But even with the strength of Titanfall, the UK sales of the PlayStation 4 rose almost 72% in the same period and would receive yet another boost the following week when Infamous: Second Son launched more than doubling the units sold of Sony’s console. But sales figures alone are not the only issue that Microsoft has to overcome.
The Xbox One is available in only 13 countries while the PlayStation 4 is available in 53. Microsoft also announced that by the end of the second phase of its hardware roll out, the Xbox One would be available in another 26 countries by September 2014. Even though the Xbox has done very well with only 13 countries available to date, the gap is still widening month to month. The US and Europe, two markets which enjoyed a commanding Xbox 360 lead in the previous generation is slipping to the PlayStation 4.
Even with Phil Spencer’s ascension to the head of all things Xbox, the Xbox One has a giant millstone around its neck which it either needs to drop or embrace quickly: the Kinect. Posted as a joke a few hours after the initial Xbox One reveal, this video that condensed the marketing message of the Xbox One is indicative of the image the Xbox One has to overcome:
Because of the Xbox One’s push to be an all-in-one entertainment device with a Kinect in each box, the core functionality of the console is built around being able to understand its markets.
“I’ll just say it: I wish we were in every country on day one,” Phil Spencer told EdgeMagazine. “Accelerating our country rollout is really, really important to us. We built a box that natively understands the country it’s in – the language and television and other things – [so] let’s make sure we do a complete job in bringing the console into those markets. When we do, I think it will have an impact, but I want to do it in the right way. I don’t want to get there early if the box isn’t ready for the market it’s being launched in.”
To be ready, the Xbox One must be able to recognize and respond to commands in the language of the country which has been a troubled feature in the US, not to mention regional accents and other language barrier issues. When you add in the complexities of deal with content providers, cable companies and other app providers in those countries, the idea of launching the Xbox One in any country is a daunting task. And the longer it takes, the longer Sony has to solidify their position with hardware that is pointed at gamers first.
The Xbox One has the potential to be an exciting console, but Phil Spencer has a long road ahead of him to salvage the mess that his predecessor made. The Kinect still has no game that validates its existence or expense, the console still puts apps like Netflix and Amazon Instant Video behind its paywall, and the Games for Gold program in its current form is a laughable offering when compared to the content from Sony’s PS Plus service.