Sony is in the lead on console sales. Microsoft is lagging well behind, and Xbox Gaming’s CEO has admitted as much. Nintendo does its own thing, so is arguably not even involved. But as we transition from consoles to streaming services, all this could change.
If you’ve paid even the slightest bit of attention to gaming over the past few decades, you’re probably aware of the “Console Wars.” These wars essentially center on the biggest gaming companies at the time going all out to get the edge over one another and secure the biggest market share. But who is winning the 21st century console wars?
Since the early 2000s, everything has been centered on Microsoft and Sony. Both companies tend to offer high-end hardware, online services, and the same collection of AAA games interspersed with some unique exclusives. Then there’s Nintendo, which was one of the big two back in the 90s but has been doing its own thing—and doing it well—for a while now.
Over the past few console generations, things have followed a familiar pattern. Nintendo sells a mind-bending amount of consoles, and isn’t even seriously competing. Meanwhile, Microsoft and Sony both target the high-end, serious side of the market. They cram their consoles with the best hardware they can without making the price spike ridiculously, then do their best to get as many AAA titles onto their platforms as possible.
We’re currently living through the ninth console generation, which contains the PlayStation 5, the Xbox Series X, and the Xbox Series S. Each generation is marked by the release of new hardware, and companies tend to release their new stuff around the same time.
Microsoft’s attempted acquisition of Activision Blizzard has led to a lot of focus on competition within the industry. Critics, including the Federal Trade Commission (FTC), are worried the merger of both companies would give Microsoft an unfair advantage. Microsoft has countered this by claiming Sony already has an advantage and the merger would simply level the playing field. But is that accurate? Let’s take a look.
Anyone who has seen fanboys argue will accept that Microsoft and Sony both have loyal, rabid fanbases. Diehard fans already have their preferred platform, their minds will not be changed. While they do account for a fair number of console sales, what makes the difference is the gaming equivalent of swing voters. These people will choose a particular console for practical reasons, not just because they’ve been playing on a PlayStation or Xbox their whole lives.
Swing buyers might pick a console because a lot of their friends are on that platform. Or they may be swayed by exclusives: you’re not getting Metal Gear on the Xbox, while Halo has been tied to the Xbox since its debut. Then there’s the hardware itself. Some people are looking for the best gaming experience possible, so a beefier processor, GPU, or even features like ray tracing might make the difference.
Looking at the sales figures, it seems that Microsoft didn’t do well with swing buyers in the last console generation. Looking at Xbox One versus PlayStation 4 sales, reports suggest that Microsoft sold close to half of what Sony managed.
One of the standout moments of Microsoft’s Activision Blizzard takeover involved CEO of Xbox Gaming, Phil Spencer, freely admitting that Microsoft has already lost the console wars to Sony and Nintendo—or at least this generation of it. While this claim may seem wild at first, the sales figures do back up Spencer’s statement.
As mentioned, in the last generation, Sony sold significantly more consoles than Microsoft. Nintendo also had a clear lead over Xbox, pushing Spencer’s company down into third place. Nintendo’s Switch platform figures were pretty close to Sony’s, making the console around twice as popular as the Xbox One.
The figures from the current generation suggest that the same trend is continuing. If we ignore Nintendo (which has yet to release a console this generation) and compare Microsoft and Sony’s latest sales figures, Microsoft’s Xbox consoles account for around 40% of the market, while 60% of buyers opted for a PlayStation 5.
This lead isn’t definitive, but it is significant. The gap is mainly down to the PlayStation’s popularity in the Asian market. If you purely focus on sales within the United States, Sony still has a lead but the race is far tighter.
Looking like a losing player in the current console wars is in Microsoft’s interests at this moment in time. It is still trying to acquire Activision Blizzard—a huge gaming company that owns games like the Warcraft series, the Call of Duty franchise, and popular shooter Overwatch. Numerous governments, and Sony, are worried that this merger, and the ownership it gives Microsoft of several major titles, will give the Xbox a major advantage over the competition.
Microsoft obviously wants the deal to go through, and there’s no better way to play down an advantage than to claim you’re actually leveling the playing field.
While Microsoft may be taking a bit of a hammering in the console department, times are changing. Looking at subscription services, Microsoft’s Xbox Game Pass has a significant lead over Sony’s PlayStation Plus. There’s an argument that Game Pass offers a better product than its Japanese rival, too.
Despite this early success, streaming is still in its infancy. But it is likely to play an even more significant role as time goes on, and Microsoft’s early lead may be a major advantage in the future.
If streaming continues to advance as expected, consoles may become a thing of the past. You’ll be able to play the latest games, at full graphics, on a busted old Chromebook if your Wi-Fi connection is up to scratch. There are also dedicated streaming devices on the market, So Sony outselling Microsoft on the mainline hardware front may make less of a difference.
However, even in that reality, hardware will still play a part, and Sony seems to be banking on this. The highly anticipated “Project Q” was unveiled at the Sony’s 2023 PlayStation showcase. It turns out that the new handheld device is set to focus on streaming. While some fans were hoping for a portable, standalone, successor to the PSP—a further move towards the streaming market may be a shrewd move for Sony.
We’re around halfway through the current console generations, with the next major hardware release likely not happening until 2028 at the earliest, and mass adoption probably not becoming a thing until the 2030s. So while Sony currently has a significant lead on the hardware front, that doesn’t mean this war will be as one-sided as last time around. Plenty could still happen before the curtain falls on the ninth console generation.
If streaming really takes off, we may not even see a tenth generation of consoles. We may instead have a wide array of cheaper streaming devices to choose from, as companies shift from pricey hardware to accessibility. If that is the case, gaming catalogs, price, and other perks will play a large role in a company’s success—and an Xbox/Activision Blizzard merger may well give Microsoft an edge.
The wars may continue, but they wouldn’t be the console wars anymore. Instead, we’d be talking about an ever-evolving series of streaming skirmishes as both companies push updates, corner exclusives, and open up their back catalogs.