Xbox Platform Up 45% Microsoft Reports

Posted: Apr 25 2014, 4:05pm CDT | by , Updated: Apr 25 2014, 5:09pm CDT, in Gaming


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Xbox Platform Up 45% Microsoft Reports

Often, when we read about the Xbox One and its primary competitor, the PlayStation 4, we read comparisons.

The Xbox One is not selling as many units as the PS4, ergo Sony is “winning.”

Or, the Xbox One is selling faster than the Xbox 360 during its launch year—something Paul Tassi noted earlier isn’t entirely the case now.

Writing about the competition, about the race, is certainly one way to do it, but I think it misses important details.

For instance, Microsoft's Q3 earnings show that revenue for the Xbox platform is up 45% over 2013, with a 17% increase in Xbox Live transactions. You can paint this as good news for Microsoft and its Xbox division.

Or you could point out that gross margin is down by 34% due to the launch of the Xbox One and the slim profit margin attached to new console sales.

More to the point, there are very big reasons why comparing console sales this early on is problematic.

The Xbox 360 outpaced the PS3 for years, but they’re virtually tied now. Many of the deciding factors, like exclusive games and the eventual price of both consoles (at some point Microsoft will almost certainly lower the cost of its system) will narrow the gap.

But the “gap” isn’t even the most important factor to consider.

A console’s success isn’t determined merely by the success of its competition. That can be the case, of course. If Sony dominated the console market so completely that Microsoft could no longer compete (or vice versa) we’d see a drastically changed playing field. But this isn’t what’s going on in this context.

Microsoft may not be selling as many systems as Sony right now, but other factors like Live subscriptions, the higher cost of each unit sold, and so forth also play a factor. We all like to watch a good fight or a good race, but it’s important to remember that a “race” in this context is little more than narrative framework.

Ultimately, Microsoft doesn’t need to beat Sony to justify the continued existence of the Xbox brand; the Xbox One can be a success without being the “winner.”

Microsoft has the cash and the commitment to Xbox to continue supporting both the 360 and the X1 for years to come. More and better games will certainly help in this regard, and for the first time Microsoft’s Xbox division really does appear to be committed to a wide variety of Xbox exclusives that go beyond the shooter genre (though the big ones, like Halo and Gears of War, certainly are.)

Luckily enough, Sony is also more than likely in this for the long haul, and despite the recent struggles over the Wii U, so is Nintendo. Lots of healthy competition is a win for consumers, and that’s the only part of the race that really matters.

(Via Dual Shockers)

Follow me on Twitter or Facebook. Read my Forbes blog here.

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