Xbox 360 'Would Benefit Most' From Upgrade to Next-Gen, says AnalystXbox 720 could be unveiled in 2013, and Sony is also rumored to have started early development on PlayStation 4 games, but which company will be first to market with next-gen? Should Microsoft push to get the jump on Sony again as they did with Xbox 360, or is the launch timing not as important as we think?
IndustryGamers recently chatted with several analysts to get their takes on next-gen console launch strategies.
"Strategically I think the next Xbox launches first because the Xbox 360 is the older system and could most benefit from the upgrade," DFC Intelligence's David Cole told us. "But really the entire strategy of Microsoft and Sony is to extend the lifecycle and provide more OTT services to their current systems. Getting into an arms race doesn't play into their strategy. Thus launching a new system would be more of a defensive play."
Cole added that for now, neither company really needs to advance the hardware. "I think the way things are going for both companies there is no need to launch a new system in a hurry. The longer the current systems can last and be supported, the better. Really the need to launch a new system comes when you see a major downturn in the current business (as the case with the Wii) and/or competition from new products. Right now the systems still have strong sales and the only competition is the Wii U scheduled for next year. Unless there is a major downturn in the current business, I think that a launch prior to 2014 would be a mistake," he said.
"There could be a wild card scenario where SCEA could buck convention and launch next generation before or with Microsoft's next generation console to gain that edge."
M2 Research analyst Billy Pidgeon also sees Microsoft likely moving before Sony. "At this point, Nintendo Wii is most saturated, so it makes sense for Wii U to launch first. Xbox 360 has the largest active installed base, and will be next to reach saturation, so Microsoft would appear to be positioned for the next launch position, and PS3 has further to go so could hold back longer," he said.
Pidgeon continued, "In accord with Sony's stated ten year plan, PS3 will be last to reach saturation and could take position three. On the other hand, if competitors following the leader can't establish a uniquely superior technical advantage the leader can gain an edge that's difficult to contest. Alternatively there could be a wild card scenario where SCEA could buck convention and launch next generation before or with Microsoft's next generation console to gain that edge. Launch order is basically a game of chicken, and particularly in this relatively weak economy the first mover in a high end play could be most vulnerable. And beyond launch timing, there will be considerable pressure to reduce pricing more rapidly in contrast to the price reduction schedule in this generation."
Of course, launch timing isn't always a determining factor of success, as Sega would clearly tell you, looking back at its Dreamcast.
"There isn't much correlation between launch position (first or last) and ultimately commercial success," pointed out EEDAR's Jesse Divnich. "Timing is entirely relative to the technology you are introducing vs. what the current demands are in the market."
"The PlayStation 3, at launch, was a beautiful console with all the bells and whistles; unfortunately the technologies they were introducing were not mainstream quite yet, such as Blu-ray. While it is common to believe that consumers are forward looking, in general they are not, so it is difficult for a consumer to apply future value to technology. The Wii, on the other hand, delivered technologies that were relevant instantly, but as we know it wasn't able to sustain interest long-term--the technologies reached their limitations quicker."
"Launch timing comes down to the long-term goals of the console manufacturer. Do they want their platform to have a 10-year shelf life or 5 years? Those goals are then measured against the current availability of technology, cost pricing, and other factors. I couldn't say which console should launch first because I don't know what each platform's goals are nor what technologies they want to introduce."
What are your thoughts on next-gen? Should Microsoft try to launch first again?
