GameStop Corp., the largest specialty retailer of video games, says its initial allocation of Sony PlayStation 4 consoles sold out and that 2.3 million customers are waiting for the devices.
The good news about demand came 24 hours before Microsoft’s new Xbox One goes in 13 countries. It also is expected to be in high demand after a seven-year drought on new home consoles from the two companies. Nintendo Co.’s Wii U is entering its second year of sales.
Initial sales of the PlayStation 4 player exceeded its predecessor, the PlayStation 3, by more than 80 percent in the first few days, executives of the Grapevine, Texas-based chain said today on a conference call with analysts. They also anticipate a large waiting list for Microsoft Corp.’s Xbox One, suggesting a prolonged industry sales slump is ending.
Sony said on Nov. 17 it sold more than 1 million PlayStation 4 consoles in the U.S. and Canada within 24 hours of the $399 machine going on sale. The figure included some of the 1 million units Tokyo-based Sony presold on a global basis, said Dan Race, a PlayStation spokesman.
GameStop is a bellwether for the industry since it accounts for more than half of Sony and Microsoft’s video-game software sales, will benefit from the console transition based on its ability to lure gamers who trade in older titles and hardware for discounts on new gear, said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco. He recommends buying the stock.
As Sony and Microsoft once again spar this holiday season over who has the brawnier machine and more enticing online features, hardcore gamers are already buying or lining up for shiny, powerful new consoles.
But what’s less clear is how the gadgets will compete for the attention of people who now look to their tablets, smartphones and other devices for entertainment.
“It’s turning out that these consoles, in fighting each other for the love of the hardcore gamer, run the risk of failing to capture people in their homes,” says James McQuivey, an analyst with Forrester Research.
Both Microsoft and Sony position their gaming systems as entertainment devices meant to take over the living room. The Xbox 360 started streaming movies from Netflix in 2008 and the PlayStation 3, which already served as a Blu-ray player, soon followed, along with a bevy of other entertainment options. Experts wondered whether gaming systems would soon replace cable set-top boxes.
Not so fast, was the reply from a host of other gadget makers. Along came Google’s Chromecast, the Roku player, Apple TV and, of course, a slew of tablets. There are many ways to stream movies, TV and music into the home now. In that sense, the Xbox One and the PlayStation 4 are no longer in a traditional, head-to-head battle.
“It’s really these consoles against everything else,” says Scott Stein, senior editor for the tech blog CNET.
While game console sales have been falling in the U.S., the worldwide video game market is growing, helped by mobile and online games and downloadable console games. Those sales are more than making up for a declining demand for game discs. Gartner expects the total video game market to hit $93.3 billion this year, up from $78.9 billion in 2012. The research firm sees the market rising to $111 billion by 2015.
Both new gaming systems are expected to be in brisk demand around the holidays. Sony expects to sell 5 million units of the PlayStation 4 by the end of its fiscal year in March. The PlayStation 3, in comparison, sold 3.5 million units in that time period seven years ago. Microsoft declined to offer a sales outlook for the Xbox One through the holidays, but demand should be comparable, says Wedbush analyst Michael Pachter. He expects 3 million Xbox Ones to be sold through December and 4.5 million through March.
The Xbox One, which includes an updated Kinect motion sensor, will cost $500, which is $100 more than the PlayStation 4. In contrast, the PlayStation 3 went on sale at $500 or $600 depending on the model in November 2006 while the Xbox 360 cost $400. Most new game software costs $60.
