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PS4 game delays, lower pricing unlikely to impact console war, says analyst

Thursday, 14th November 2013 21:55 GMT By Brenna Hillier

PlayStation 4′s lower price won’t give it much of an advantage against the Xbox One, according to EEDAR’s Jesse Divnich, but nor will recent high profile software delays negatively impact its success.

In an email, Divnich said that the PS4′s $100 price advantage will be important in the early days, but won’t mean much in the long run.

“The initial pricing is crucial to building short-term momentum. Historically, the cheaper console has generally be able to gain an initial lead,” he said.

“Long-term (2016 and onwards), we expect pricing to carry less weight in the consumer decision process. By 2016, we will begin to see consumers weigh more on the value the consoles are actually offering, such as their software library, the quality of their exclusive games, and cost/value of their entertainment options, into the consumer decision process.”

Speaking of the software library, Divnich said Microsoft and Sony are on an equal footing as they’ve both experienced delays and have a similar launch line-up.

“We have to keep in mind that consumers do to take into account near term releases when purchasing a new consoles. Delays are expected and the early adopters understand that. The delays may push out potential software purchases, but it isn’t likely to impact hardware sales to a significant degree this holiday season,” he said.

“At the end of the day, delays can be obstacle, but the net-net is negligible in the long-term.”

Even Sony’s decision to introduce a feww for online play – PlayStation Plus – can’t hurt the console’s chances, Divnich added.

“Consumers have grown to accept the monthly fee required to enjoy a lot of the deeper digital services the consoles offer,” he said.

“It will be incredibly important that Sony drives value in the PlayStation Plus offerings and they will certainly have to offer more value at first at increased internal costs in order to win the battle against Xbox Live.”

Sony has an advantage in that many services it offers for free, like Netflix, are locked up in Xbox Gold, the analyst continued, but there’s a real chance for PlayStation Plus and Xbox Live to end up battling it out.

“If Microsoft begins to lose ground, we could begin to see a value war between the Xbox Live and PlayStation Plus subscription service that could drive down margins on this highly profitable offering. If the war gets too heated, it could even result in both offering so many services or free games that the subscription service turns into a loss lead for the platform,” he said. “Similar to how cable and cell phone companies offer a high amount of value for new customers (and often results in a loss to the company) in order to realize long-term profits and gains.”

The PS4 launches in North America on November 15, which is just a few hours away, and hits Europe and selected further territories on November 29. The Xbox One launches in North America and West Europe on November 22.

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11 Comments

  1. Panthro

    Parent with not much money and lack of knowledge of the consoles always choose the cheaper option, it will of course affect sales and when it comes down to it, sales affects nearly everything.

    #1 10 months ago
  2. Hcw87

    @1
    Don’t forget these prices are RRP, and in some countries the difference is trivial at best.

    XB1 comes with a game and Kinect, and in order to get the same with PS4 you have to shell out more than the cost of an XB1.

    EDIT: In my country, the PS4 goes for ~468 EUR, while the XB1 sits at 480.

    Xbox One have been delayed here though, but that’s the price for preorders currently.

    #2 10 months ago
  3. Zackslacky

    Plus xb1 has a ton of stock coming in up until xmas. Ps is sold out. Will be pretty even out there.

    #3 10 months ago
  4. Panthro

    The X1 is currently £100 more in the UK

    In GAME the PS4 is at £349 on its own or £395 with FIfa 14 and the X1 is currently £449 with FIfa 14.

    And with the couple of free2play games on PS4 it would get my vote as the first console to buy if I was buying one yet, but Im going to wait until next year and see the software line ups after everything has blown over.

    #4 10 months ago
  5. MadFlavour

    Random idiot, makes random idiotic prediction.

    #Nintendoaredoomed

    #5 10 months ago
  6. Dendroball

    I’m wondering if such a war happens on the PS+/XboxLive front and if both of the manufacturers think real value lies in the fact of offering free games, what kind of unexpected effect it could have on the market ?

    I mean if both are trying to outbid each other in the offering, customers would just have to pay the subscription fees and wait for the free games to be released and actually buy less games that are not an absolutely necessity for them.

    Sure they won’t know in advance which games will be released for free but still this service won’t exactly encourage them to take a chance on a few titles which don’t fall in their “Must Have” category, especially the indie titles and more modest titles.

    In other words indie/modest games (and in a lesser extent all of the other major titles) will also have to compete with those titles offered for free and I’m pretty sure some developers would not be exactly ecstatic about that possibility in an already pretty harshly competitive market.

    I know developers of the different free titles will be paid but if the war is really on the free game front, is it a sustainable model to pursue ?

    #6 10 months ago
  7. polygem

    399€ for the ps3
    140€ for bf4, killzone and need for speed (amazon 2+1 deal)
    “free”:
    blacklight
    warframe
    resogun
    contrast

    it’s not a bad deal for a brandnew, new gen console plus 7 games imo…that’s why i feel ok with buying at launch

    #7 10 months ago
  8. Pytox

    @7 you forget psn plus for a year which adds 50, same with xbl which is 59,99 btw :P

    #8 10 months ago
  9. Legendaryboss

    @7
    That sounds backwards and a little steep for a next gen console labelled “PS3″ ;)

    #9 10 months ago
  10. fearmonkey

    IS this guy ever right? I think his predictions are more off than Pachters

    #10 10 months ago
  11. polygem

    @8: sure, but i already have a sub. like you say, you’ll need xbox live gold as well if you want to take your battlefield or cod x1 online. if you want to play the ps+ games, you can do that for free actually. there’s a ps+ trial included with the ps4. a gold trial is included as well though.

    but to me ps4 really is a much better deal. i wouldn’t even use the kinect on my x1 so i would have to pay for something i would never take out of the box.

    @9: indeed…maybe they ripped me off!

    #11 10 months ago

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