The new PlayStation and Xbox will start selling this week. $ 150 billion at stake

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The new PlayStation and Xbox will start selling this week. $ 150 billion at stake

This week kicks off the epic battle between Sony and Microsoft with the launch of new game consoles. The PlayStation 5 (PS5), Xbox Series X, and Series S maker are well positioned due to the surge in demand for video games driven by the COVID-19 quarantine measures. Today the gaming industry is valued at $ 150 billion.

Playstation 5
Playstation 5

According to industry experts, a large arsenal of games and a wider fan base of the Japanese company (after all, Sony sold more than 100 million PS4s, winning the battle in the previous generation) will maintain the advantage over its main rival, the American Microsoft. “People who have the Xbox, tend to buy new the Xbox, and the people who own the PlayStation, tend to buy new the PlayStation », – he stressed analyst at Wedbush Securities Michael Pachter (Michael Pachter).

However, the industry is changing: for example, there is an increase in streaming games, which with the presence of a high-quality Internet allows you to do without powerful client hardware: all processing takes place on the server-side. According to analysts, this could reduce sales of consoles in the coming years and benefit Microsoft.

The pre-order race for the new consoles actually started a few weeks ago. Sony PS5 stocks were sold out in minutes on many retail sites, disappointing fans.

Sony has the edge right now, but the stakes are high for the Japanese company. The gaming business for her is a key source of money. In fiscal 2019, the division, which includes gaming equipment, software, and services, accounted for nearly a quarter of Sony’s $ 77 billion in sales and generated nearly 30% of Sony’s $ 7.9 billion in operating profit.

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Microsoft has not disclosed the results of its gaming division, although this is a less significant part of the business for it than for Sony. The company does not disclose information about the sales of its systems, but, according to analysts, the Xbox One family was sold with a circulation of about 50 million units.

The PS5 will retail for $ 499 or $ 399 for versions with and without an optical drive, respectively. The Xbox Series X will retail for $ 499, while the simplified Series S will retail for $ 299. Analyst firm Ampere predicts about 5 million PS5s will be sold this year versus 3.9 million Xbox Series S and X, bringing combined sales of both systems higher than the previous generation in the same period.

Demand for Sony systems is supported by in-house studios with exclusives such as Marvel’s Spider-Man: Miles Morales. The new Xbox will not have too attractive exclusives: even the new part of the flagship Halo series has been postponed to next year due to the development of the pandemic.

But Microsoft has its own ace up its sleeve: Xbox Game Pass subscribers are growing rapidly. Today, the subscription offers over 100 games, including brand new ones, and has over 15 million users. Sony has been reluctant to make its most popular games available through the likes of PlayStation Now, fearing it could hurt sales of high-budget games.

Industry experts say the pandemic while fueling demand, is also limiting production at Sony and Microsoft. “Demand will outstrip supply, so there are people who won’t be able to get the console at first,” said analyst Piers Harding-Rolls at Ampere.

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Sony announced that retailers like Walmart, Best Buy, and Target will sell the PS5 exclusively online when it releases on November 12.