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PlayStation, Xbox Tout Successes Entering 2017

10 Jan, 2017 By: Erik Gruenwedel

Netflix bows experimental video game in India and Spain

The video game industry approaches 2017 facing digital issues not uncommon with packaged media in home entertainment and the music industry. Those challenges are affecting hardware as next-generation consoles Sony PlayStation 4 and Microsoft Xbox One reportedly saw software sales eclipsed in 2016 for the first time by mobile gaming.

Sony at CES said 6.2 million PS4 units were sold during the holiday season, bringing its base to 53.4 million consoles sold since launch in 2013. Rival Xbox One has reportedly sold about 20 million units, a largely speculative data point due to Microsoft’s refusal to disclose actual sales data.

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, said November hardware unit sales were below expectations, with 1.1 million PS4 units sold (including PS4 Pros) compared to his 1.2 million projection. Microsoft sold slightly more than 1 million Xbox One units compared with a 1.1 million estimate.

“The PS4 was the most popular console for the first time in five months, driven by discounting and the Nov. 10 release of the PS4 Pro, which sold well above our expectations,” Pachter wrote in a Jan. 4 note.

Microsoft said November and December saw Xbox Live engagement reach an all-time high of 3.9 billion hours, up 23% compared to the prior year.

The software giant launched Xbox One S in November, the only console with an internal Ultra HD 4K Blu-ray Disc drive for 4K video with high dynamic range (HDR). New game titles with HDR include: Gears of War 4, Forza Horizon 3, NBA 2K17, Deus Ex: Mankind Divided, Final Fantasy XV, The Elder Scrolls Online and World of Tanks.

“Xbox One S was among the top-selling consumer products this holiday in many markets, and its launch helped set the engagement records we experienced,” Mike Nichols, Microsoft VP of marketing, wrote in a Jan. 5 blog.

Consumers bought 1.8 million UHD Blu-ray discs in the United States last year, along with 300,000 UHD Blu-ray players, according to data cited by the Blu-ray Disc Association.

Regardless, analyst Pachter said inclusion of a 4K UHD BD drive in Xbox One S is not a competitive advantage.

“Demand for 4K Blu-ray is a rounding error. Not enough 4K physical content is available to make a Xbox One S purchase worthwhile. I do not think it's an impediment for Sony,” he said.

GameStop, the nation’s largest game retailer, continues to aggressively seek out mobile gaming, in addition to trend merchandise, in an effort to offset declines in physical gaming.

“We needed to invest into the digital side of gaming and new retail categories that would drive continued growth and leverage our specialty retail competencies to make sure we did not get left behind,” CFO Rob Lloyd told Forbes.com.

GameStop reports nine-week winter holiday sales Jan. 13.

The industry continues to push a reboot of virtual reality (VR) gaming, with Sony’s PlayStationVR aimed at enriching the PS4 experience through VR games such as Gran Turismo Sport and Farpoint — the latter using the PlayStationVR Aim Controller. 

Indeed, sales of PSVR have exceeded expectations, leading to product shortages. The headgear was projected to sell about 1.4 million units through the end of the year — ahead of Oculus Rift and HTC Vive. Sony reportedly expects new PSVR shipments to arrive by early February.

Pachter said actual PSVR sales data, which launched Oct. 13, was not included in the industry sales numbers for the second consecutive month.

“Sony previously disclosed that PSVR pre-order sales were in the ‘many hundreds of thousands,’” he wrote.

Finally, Netflix quietly test-released a side-scrolling video game in India and Spain, dubbed “Netflix Infinite Runner” and featuring characters from original series “Narcos,” “Marco Polo,” “Orange Is the New Black” and “Stranger Things.”


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