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The Console War is our new monthly look at the commercial performance and marketing activity of the big three: Sony, Microsoft and Nintendo. Here’s the 2017 story so far…

The current console generation is entering a fascinating new phase. Microsoft is soon to launch the new 4K Xbox One X console, Nintendo is resurgent with the Switch a hit plus a renewed vigour for the 3DS, and Sony continues to nurture its impressive lead in console sales.

In this article we’ll look at the fortunes of each console over the last few months.

X hits the spot for Microsoft

As we approach the fourth anniversary of the current generation, all eyes are on Microsoft. On paper, the Xbox One, and its ecosystem, have an awful lot to recommend it. The Games with Gold subscription service is arguably superior to PlayStation Plus, Backward Compatibility has been an unqualified success, Xbox Game Pass is a noble attempt to be the Netflix of games, and the Game Preview programme gives games in development a chance to find an audience on console. However, the memory of the Xbox One’s botched launch – and the original model’s technical shortcomings – are long-lasting.

The narrative is that Microsoft has finally got its house in order in terms of technology, but has forgotten about first party games. To some extent this is true. The delay to Crackdown 3 is a blow, Forza Motorsport 7, for all its qualities, is never going to set the world alight, and Cuphead is as niche as it is beautiful.

However, the prospect of PlayUnknown’s Battlegrounds as a console launch exclusive – via Game Preview – is a big win and one that shouldn’t be underestimated. This, coupled with the arrival of the Xbox One X, gives Microsoft the opportunity to perform a soft reboot on the Xbox brand.

Microsoft started September on a high. The initial ‘Project Scorpio’ edition of the Xbox One X sold through its entire pre-order shipment within a few days. It was not unexpected – the X seems specifically designed for the early adopter audience – but was a promising start nonetheless. No one – Microsoft included – believes that the Xbox One X will see a complete turnaround in the perception of the Xbox One brand, but a successful launch will certainly help.

It’s also important that Xbox One X compatible software proves its worth – it’s here that the slender first party lineup once again comes into play. Normally we’d expect to see first party games act as a proof point for a new console’s capabilities, but Forza 7 aside, it will be down to other publishers to really fly the flag for the X.

Promoting 4K content is fraught with difficulties. To help sell the Xbox One X, Microsoft has partnered with Samsung for a cross-promotion with their range of QLED 4K televisions. TV spots showcasing the Xbox One X and QLED line will run later this year, with retail activations held across the US giving consumers the chance to see the console first hand.

Much of Microsoft’s activity remains focused on the more mainstream Xbox One S line. According to iSpot,tv, Microsoft spent $1.3 million on the Madden NFL 18: This Is the Year spot alone. It amassed 46.3 million impressions, many of which on the ESPN and NFL networks.

It should be said that some of Microsoft’s other Xbox marketing activities are feeling a little long in the tooth. If I told you about an Xbox collaboration with Doritos and Mountain Dew, you could be forgiven for thinking it was 2008, but no, the Every 60 Seconds campaign running in the US is an online promotion giving customers to the chance win an Xbox One X. And rot their stomachs in the process, presumably.

Many recent Xbox community comms have focused on dashboard updates and quality of life improvements. These are all nice to have, but tend to be fixes for long-standing problems, rather than features that will entice new customers. The recent addition of the Spotify app to the Xbox One has broad appeal however, and paved the way for the closure of Microsoft’s own Groove music service.

Where it counts, there’s a lot to like. In addition to the release of the Xbox One X, there are a multitude of Xbox One S promotions to choose from. Aggressively priced hardware bundles include the Forza Horizon 3 bundle, the NFL Madden 18 bundle, the Assassin’s Creed Origins pack, and the glorious – if hard to find – Minecraft special edition. There are also frequent weekly promotions running that offer an additional game for free. For customers looking for a value-packed entry into this console generation, the current Xbox One proposition is a tempting one.

Microsoft are evidently happy with the direction that the Xbox One has taken since Phil Spencer took over the reins, and last month he was promoted to Microsoft’s senior leadership group, taking the position of executive vice president of gaming.

Nintendo’s future looking bright with the help of its past

2017 has seen Nintendo release a well-planned drip feed of exclusives for their new console, the Switch. As a result, a repeat of the Wii U’s first year software drought has been successfully avoided.

Despite expectations, Nintendo hasn’t given up on the 3DS either, with the arrival of the 2DS XL supported by the release of Metroid Samus Returns, and a steady stream of titles continuing into 2018. Pokemon UltraSun and UltraMoon are among a number of 3DS titles rated above 90% on Nielsen’s recent Game Rank Survey which measures consumer anticipation.

Add the Classic SNES Mini to the mix, and we’re seeing demand for Nintendo’s products that recalls the heady days of the DS and Wii. What a difference a year makes.

In addition to the solid software lineup, Nintendo has also benefited from the Switch becoming something of a press darling. This gives them an advantage over their competition in terms of generating headlines. Here at Thumbsticks, our inbox receives a steady flow of Nintendo-issued press releases week in, week out. By having their fingers in so many pies – home consoles, portables, mobile, toys, and micro-consoles – there is something for the media to cover on a continual basis.

Interestingly, much of Nintendo’s press coverage is not always positive. Problems with SNES Classic Edition pre-orders, and the failings of the Switch’s voice chat capabilities have all generated negative stories in recent weeks. But Nintendo has been quick to combat these with app updates, and NOA president Reggie Fils-Aimee promising plentiful stocks of the Classic SNES Mini until the end of the year. It’s an impressive exercise in plate spinning.

Nintendo - Yoshiaki Koizumi

Nintendo are also leading the way with video content. Nintendo Direct broadcasts are always newsworthy, with their recent September edition, for example, generating 10 individual stories on Kotaku, and another 10 on Polygon, to name just two websites. Not bad work for a 45 minute YouTube advertisement.

One of the biggest announcements from that Direct was the news that Tencent’s massively popular MOBA, Honor of Kings, is coming to the Switch under the name of Arena of Valor. At first glance, the news isn’t that interesting, until you realise that Honor of Kings has over 200 million monthly active players, and generates over half of Tencent’s mobile gaming revenue.

The deal caused Nintendo’s share price to jump 7% to ¥40,950, its highest value since 2008. It rose a further 2.66% last week when an increase in Nintendo Switch production was confirmed. Industry publication Digitimes predict sales of around 20 million units by the end of the fiscal year.

Credit Suisse also released a report in late September suggesting that Nintendo could sell over 130 million Switch consoles through to 2022. Although such an achievement seems unlikely, the outlook for the Switch does appear positive. It was the best-selling console in the most recent NPD report, and there were three exclusive titles in the August’s software chart. Confidence in the Switch was further underlined by Bethesda committing to release Switch versions of Doom and Wolfenstein II, and Rockstar tailoring their LA Noire re-release.

But it’s not all about the Switch. Nintendo also spent over $4.5 million on TV advertising in August, with nearly a million on the promotion the New 2DS XL system.

Data from iSpot.tv via VentureBeat

Of course, Nintendo being Nintendo, the news is not always positive. In a month in which fans could enjoy the third Nintendo World Championships, the company also imposed controversial new restrictions on its YouTube content creator programme.

Sony relies on exclusives

The narrative that says the Xbox One has a bare cupboard of first party games, also says that the PlayStation 4 has all of the best exclusives. And yes, it probably does, but not this autumn. Sony’s exclusive lineup for the remainder of 2017 is just as light as the Xbox One’s, consisting of GT Sport and the Horizon Zero Dawn: The Frozen Wilds DLC.

However, what Sony does have is an impressive lineup of existing exclusives – Horizon Zero Dawn, Uncharted: The Lost Legacy, Yakuza Kiwami, Nier Automata, Persona 5, and Everybody’s Golf to name just six – and the promise of many more first party titles next year, including God of War, Days Gone, and Spider-Man.

For much of September, Sony were unusually quiet. There was little news from Gamescom, and their Tokyo Games Show press conference also failed to generate much excitement. Highlights included the surprise announcement of a Final Fantasy IX remaster on PS4, a new trailer for Shadow of the Colossus, and the unveiling of Square Enix’s Left Alive, but there was little else to tempt Western audiences.

For Sony, the approach appears to be one of consolidation. The PlayStation 4 is the undisputed generation leader, and with two competitively priced consoles – and PS VR – on the market, their focus is firmly on software.

The PS4’s large catalogue of software also means Sony can run regular PlayStation Store sales that have the competition beat in terms of scale and variety.

Only on Playstation sale

In terms of speaking to existing customers, Sony continues to cultivate a rather fantastic blog. In addition to regular updates on PlayStation Sales and game previews, the blog has also started to include developer interviews for both AAA and indie releases. The result is much more interesting and personable than many other corporate content outlets.

PS VR is also approaching its first anniversary, and although it hasn’t become the phenomenon many hoped for, Sony appears content with its performance. The device has sold over 1 million units worldwide, and 100 titles are now available through the PlayStation Store. A new hardware revision is also due soon that addresses some complaints by introducing HDR pass through, and streamlining various cables and inputs.

Sony is not going to watch the Xbox One X arrive unchallenged, however. The company’s PR machine is likely to shift gear in the run up to Paris Games Week. The PlayStation Media Showcase will be held on Monday October 30th, 2017, and rumours suggest news on a number of first party titles, plus a potential price cut for both PlayStation 4 models.

We could also see a change in the Sony’s direction over the longer term. Last week it was announced that Andrew House, president and chief executive of Sony Interactive Entertainment, was departing after six years in the role. It will be fascinating to see if and how the company’s approach will change under new president, John Kodera.

The Console Wars – State of Play

Xbox One range – 25–30 million (estimate)
PlayStation 4 range – 63.3 million
PlayStation VR – 1 million+
Nintendo 3DS range – 67.1 million
Nintendo Switch – 4.7 million
Nintendo Wii U – 13.6 million

Sources: NPD | AListVenturebeat | Xbox Wire | Wall Street Journal | Market Watch | PlayStation Blog | Barrons | Wikipedia | GamesIndustryNielsen

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