Tuesday, March 18, 2008

Console Race: Another Lap For Sony


Console Race: Another Lap For Sony
Matt Vella on March 13

For the second month in a row, sales of Sony’s (SNE) Playstation 3 console system outpaced Microsoft’s (MSFT) Xbox 360 in the U.S., according to figures released late Mar. 13 by analysts at the NPD Group. Though both companies promptly issued press releases slicing the monthly results in their own favor, the results underscore the tightening race between the two tech giants.

After a 2007 of fits and starts, Sony’s game system seems to finally be on firm footing. The company crowed about the nearly 281,000 PS3 systems it sold, representing 120% sales growth from the year before and a volume 10% higher than Microsoft’s next-generation console for the month. “We believe that Blu-ray becoming the high-def format of choice was the tipping point for many consumers,” said Jack Tretton, president and CEO of Sony Computer Entertainment America, referring to the demise earlier this year of the rival HD-DVD format formerly backed by Microsoft.

For its part, Microsoft issued a release saying supply constraints had held up sales. In Feb., Microsoft sold 254,600 Xbox 360s, up from 230,000 consoles the month before. The company says the so-called Xbox ecosystem – combined sales of game systems, software, and accessories – was worth $332 million, or 39% of the market for next generation systems. Microsoft was also able to sell more games with each of its systems than Sony.

Still, Sony seems to have the wind at its back. In addition to its advanced PS3 console, the company last month sold 243,100 Playstation Portables and an eye-opening 351,800 Playstation 2 units, its previous generation game system. A raft of highly anticipated exclusive titles including sequels to the Metal Gear Solid and Gran Turismo series are due in the next couple of months, which the company hopes will further boost sales. Some analysts have predicted that Sony could pull ahead of Microsoft this year, despite Redmond’s year advance on the Japanese games titan.

As a whole, the games industry continues booming. Year-to-date sales of both hardware and software were up 34% to $1.3 billion from $992 million. “Even following a red-hot 2007, the video games industry shows no signs of letting up,” said Anita Frazier, an NPD analyst. She added that a slate of blockbuster titles yet to be released could push “the industry to achieve another year of record-breaking sales despite difficult economic conditions.”

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