This news comes right in advance of the month's NPD numbers which show that once again, the Xbox One was second best in the US. Another cause for concern is the 2 million unit sales gap: the PS4 has sold 7 million consoles to consumers, while the One has sold only 5 million units to retailers, so the actual sell-through is less than that. Unfortunately, the Kinect most likely costs the full $100 premium it charges, so suggestions of cutting the existing SKU $100 would be extremely costly and unsustainable. People are also quick to mention that the Xbox One is available in far fewer markets. I believe that argument holds very little weight and is entirely self-inflicted by Microsoft, which chose to believe that everyone who would be loyal to the 360 would stay loyal.
One thing is for certain at Microsoft: the promotion of Phil Spencer has clearly lit a fire under Microsoft's collective asses. Since the Microsoft lifer replaced Don Mattrick as Xbox's head Microsoft has done more things right than wrong, which is not something that can be said for the last six months of the former EA Canada head's time in charge of Xbox. Giving the Xbox One price parity with the PlayStation 4, along with removing the need for Xbox Live Gold to use non-gaming services like Netflix and Skype, is a very important step in trying to catch up to Sony's console. However, I can't help but feel like sacrificing the Kinect is an unfortunate price to have to pay. It is a fantastic tool for providing further UI options and really helps to provide something different between the very similar (in terms of hardware) consoles. I just hope this doesn't mean Kinect will be relegated entirely, but luckily (at least for me) I don’t think its done just yet.
I'm glad that Microsoft is making the move to remove the Kinect from the console to lower the price, but I think it's all too late right now. By the time this price cut comes out, I bet that Sony will one-up them and make the PS4 cheaper than what it is already. But I do wonder if this will be a good thing in the long run, as they've been pushing Kinect since it was called Project Natal. Much like the PlayStation Eye, the Kinect is now relegated to the "optional" accessories for the console, meaning that most people will pass it up when buying the Xbox One. In addition, their changing the interface for this change in direction for the Kinect. It seems like Microsoft is marking the end of the Kinect's ambitious technical goal, which was to create a universal remote for not only the console, but also your TV as well.
Max hits the point on the head here: the PS4 doesn't require you to be subscribed to play games that independently require subscriptions or are free to play. This could go one of two ways. The first path is that this policy doesn't change. After all, free to play and MMOs are still a very small demographic within the Xbox community, and will matter little to Microsoft's bottom line. They probably are also playing other games anyways, and will need Gold regardless. The other possibility is that Microsoft continues to relentlessly stick to their policy of changing the platform to best comply with user feedback, which is what has led to the monumental changes detailed above, and this is the next follow.
I'm not sure this is as big a deal as Max has made it out to be. As Simon mentioned, MMO players are certainly a small demographic of console gamers, as just about any gamer whose main focus is an MMO will be using their PC. Far more important to increasing fan goodwill and making the choice between consoles harder is the freeing up of services like Netflix and Skype, as I mentioned earlier. As Simon says, if someone is choosing to play an MMO on a console, they are probably already a console gamer and will have Gold/ PS+ so this distinction is not going to matter, at least as I see it, for the foreseeable future.
Big blow to Microsoft there. While services like Netflix will not require you to be subscribed to XBL Gold, F2P and MMOs still require you to be subscribed to the service in order to play them. Not only are you paying monthly for the MMO, you're also paying for XBL Gold just to get access to the game you want to play. Once again, another point to Sony, as you don't need to be subscribed to PS+ to play any MMOs, like A Realm Reborn and ESO, or F2P games, like Warframe and Blacklight.
The winter of our discontent may be coming to an end, but it is not quite over yet. While $65 million seems tremendous for an individual, it's a relative pittance for such a large company. Make no mistake, these results are barely scratching positive territory. These gains can be extremely fragile; MMOs generally peak in the first several quarters as gamers with a passing interest give them a try, but then slowly taper off. Just think, if a gamer community as fervent as that of Star Wars, with a greater fanbase as big as Star Wars can see troubling declines, the relatively more niche (but more fervent still) Final Fantasy audience might be in more trouble.
While this bodes well for them, they're still not in the clear just yet. The obvious reason why they're in this position right now is all in part to A Realm Reborn, which has been a massive success. And now that they've put out the PS4 version of the title, I'm betting that they're set for the long run. I know quite a few people that are playing it on the PS4 right now (PS4, PS3, and PC players all share the same servers), that have said they've subscribed. This is just a small step to recovery, but the journey continues onward.
Despite the cries of victory by many Sony fans, things aren't pretty on the other side of the fence either. Sony expended a tremendous amount of resources to give the PS4 the hot start it desperately needed. Of course, as they put the costs of the launch behind them and starting moving into the primary phase of this console's lifecycle, those costs should continue to decline. The Vita and handhelds continue to be a drag on the division as a whole, with sales projected to fall further still. More worryingly, the division's projected profit is 20 million Japanese yen. While that may sound reasonable, when converted to US dollars, that comes out to just under $200,000. So next quarter, the whole of Sony's global gaming division will not be able to afford a single house at the US average price level.
The PS4 has been doing so well, yet it's not nearly enough to recuperate from their aggressive push to make it the success it currently is. I don't think we have to say this once again, but in today's market, consoles are going to be loss leaders. They won't make their money back on the hardware alone, so they have to rely on software and accessories, with the former being few in quantity. Obviously, the big games are coming soon, like Watch Dogs, Destiny, Dragon Age: Inquisition, etc., but that's it. Sony's going to be in a long, miserable haul as they lose money every day from the lack of software coming out.