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MSFT – Will Microsoft Xbox One Sales Flop This Christmas?

New data suggests PS4 is much more powerful

microsoft stock msft xbox oneRelease dates for the Sony (SNE) PlayStation 4 and Microsoft (MSFT) Xbox One are only about a month away, and things aren’t looking so good for the next-gen MSFT product.

When the PS4 was first announced, Sony frustrated gamers by announcing plenty of features yet never showing the actual console. However, MSFT outright angered its audience with a long list of restrictive features for the next-gen console. Since those announcements, it has been a long road to launch day for both Sony and Microsoft.

The companies have waged price battles ($399 for the PS4 vs. $499 for the Xbox One) and DRM bloodbaths while fans and analysts argue over which set of launch titles is superior. But as important as those things are, the real sales drivers will be hardware capabilities and user experience.

And that’s where MSFT could have a problem.

Xbox One Packs Less Punch

The PlayStation 4 is generally considered to have better specs than the Xbox One, but the important detail isn’t who’s on top — it’s the gap between first and second. And new data suggests that gap could be as much as 50%.

According to a report out of the U.K., the PS4 is 50% faster than the Xbox One in both its RAM and ALU speeds. Additionally, at high resolutions, the PS4’s graphics processor seems to outdo the Xbox One processor, too.

Some gamers care more about those numbers than others, but a 50% difference is difficult to ignore. If these reports are accurate, Microsoft’s machine will need a significantly superior user experience and strong system-exclusive titles to gain traction over the PS4.

The sales outlook doesn’t seem to favor MSFT, either. Microsoft recently lowered its shipment forecast for 2013 by about 12% because of assembly issues, though some suppliers have dismissed this report. Just two weeks later, Sony’s CEO of computer entertainment went on Fox Business to say that “production yields have been phenomenal.”

Analysts have fallen on both sides of the fence when it comes to which console will sell better in the coming months, with some financial analysts betting on the Xbox One and others giving the edge to the PS4’s lower price point. And it remains to be seen how much of an advantage Sony’s one-week head start will be. But none of these factors seem to fall in favor of MSFT.

Of course, we’re speculating about launch-quarter sales for these systems. Lifetime sales and ultimate success will be driven by a wider variety of factors, including online gaming and commerce, strength of franchise titles and plenty others.

But right now, it’s looking like a sad Christmas for MSFT and the Xbox One.

Adam Benjamin is an Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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