Xbox One could outship PS4 3-to-1 this year

Colin Sebastian says supply chain checks show Microsoft's new system gaining momentum, fate of Wii U rests on holiday software lineup

Microsoft's reversal on controversial Xbox One user restrictions may be paying off. According to an investors note from Baird analyst Colin Sebastian today, the Xbox One appears to have recovered from its early stumbles.

"Despite losing the headline battle at E3, Microsoft's Xbox One appears to be regaining some momentum, in part due to the used and online policy tweaks. Importantly, our supply chain checks suggest Microsoft may have the benefit of a 2-3x unit advantage at launch compared to Sony's PS4."

Sebastian expects both systems to run into supply shortages at launch. He added that the $100 price gap between the Xbox One and PS4 won't matter as much in the launch window as the core audience of early adopters are less likely to balk at paying a premium for the system they want. Even so, Microsoft is "working with channel partners to lessen the gap," Sebastian noted.

As for the Wii U, Sebastian said Nintendo's console continues to struggle. He said it needs a price cut, adding that "the fate of the platform will likely rest on the popularity of Nintendo's holiday software lineup."

[CORRECTION]: This article originally misstated the price gap between the Xbox One and PS4. The mistake was ours, not Sebastian's. We regret the error.

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Latest comments (34)

Slade Wilson Financial Analyst 8 years ago
Wii u will be just fine. Not that this particular analyst has much history correctly predicting things.
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Brendan Sinclair Managing Editor, GamesIndustry.biz8 years ago
@ryan Thanks for pointing that out. The article's been corrected.
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Hakki Sahinkaya8 years ago
I can't ever remember reading an analyst prediction and thinking back to it with positive thoughts. So yeah.

I mean, can it do it? Sure, of course. But I am not going to take this guy's opinion as that basis. And I know locally at least my shops are saying they are getting more PS4s than Xbox Ones.
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Russ Cogman Senior Game Artist, Serious Games International8 years ago
So, there's going to be Xbox One's sitting on shelves whilst the PS4 is on back order for Christmas? That's what he means, right?
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Adam Campbell Product Manager, Azoomee8 years ago
Xbox One is a dangerous opponent and it does have big gamer and publisher support. Factors like these could make a big difference.
Its quite exciting to see this level of competition in the market for 2013.

I do have my own questions surrounding Nintendo's end of year strategies but that remains to be seen, I can't 'save' the WiiU, only say what types of games I would play or that I think would help with the platform's success.

Nintendo have expressed that they lacked the necessary resource for HD development and I guess this is one of the reasons the market will have to wait longer for games like Mario Kart and Zelda. In terms of marketing, it will be also quite interesting to see how Nintendo attempts to clear up confusion about the product, which again they have admitted is a problem.
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Robert Ilott Build & CM Engineer, Criterion Games8 years ago
Nintendo have expressed that they lacked the necessary resource for HD development
The things is.... Why?? It's not like HD crept up on them during the night is it?
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Kevin Patterson musician 8 years ago
my local stores had more PS4's for Launch than Xbox One's and they sold out of PS4's first, plus Amazon stopped offering Launch editions of PS4 much earlier than Xbox One's, so his statements don't match what I have seen. Unless MS had alot more stock than they originally allocated....
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Adam Campbell Product Manager, Azoomee8 years ago
The things is.... Why?? It's not like HD crept up on them during the night is it?
I don't think I've ever been part of a company that hasn't been caught off guard for one reason or another. It seems silly but they did underestimate the resource required.

I'm not too surprised, partly because their development has been focused on productions that probably don't have nearly the same demands as their previous two generations. In fact, we're looking at Gamecube style development for over a decade...

Nintendo also aren't known for licensing lots of external technology and engines to complete their games, so I can imagine a lot of time could have been put into shader based engines as well as matching design ambitions to fit the capabilities of the hardware. In contrast, Sony and Microsoft developers can already work with technology platforms and middlewares from PS3/Xbox 360 days and take lessons learnt into new engine architecture.

I guess the ambition at least may be a good point we can take out of this and it will clearly take longer to make those Zeldas and Marios and Metroids that we're looking for.
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Joseph Ganetakos Creative Lead, Ganz8 years ago
barring the Xbox one being packaged into new cable packages I don't see how it can compete strongly. $100 is a significant price gap.

A typical (lightly informed at best) consumers perspective will likely be:
- both systems are power equivalent
- for the same cost I can get one with a game or one and no game

Not good. MS overvalued the customers opinion of the Kinect.
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Pete Thompson Editor 8 years ago
I'm intrigued to find out what the sales will be like once PS4 gamer's realise they'll need the PS Move camera to be able to utilise the battery draining light bar on the back of the dualshock controller for motion control enabled titles.. At least MS have been upfront and included the Kinect in the initial cost of the XO..

As for the WII-U, I think the line up of games is mainly to blame for its poor sales, I've been gaming since the 80's, and there's not one "must have" Nintendo title that stands out or that I feel that I need to play over anything published for consoles (PS4/XO) or PC.. Maybe if they stopped aiming their range of titles at kids it would be taken more seriously by gamers.. Just my own opinion of course..
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Jeff Kleist Writer, Marketing, Licensing 8 years ago
Initial allocations are based on "what are we 100% sure we can deliver on launch day?" My GameStop had ten Xbox Ones available, they sold them all in about two hours. Sony is making a huge p,ay based on what they think they can deliver, because they have very specific goals for this launch that aren't just about gaming. Microsoft will likely release at leat one more block f consoles before launch as their supply picture becomes more stale, and to Capitalize in what they have going for TGS and Gamescom

PS4 preorders were rising a wave of anger, so this pattern is to be expected,but the anger this piece is talking about is when Mom can't find a system for Jimmy come December
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Rick Manager, GSC8 years ago
Your Following Statement is unsubstantiated:
Colin Sebastian says supply chain checks show Microsoft's new system gaining momentum
What supply chain and what numbers? Please provide links or source from which you made this statement...
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Jeff Kleist Writer, Marketing, Licensing 8 years ago
I would say that is precisely why MS is comfortable with their price. These boots were made for bundles
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Donald Dalley Freelance writer 8 years ago
If MS is basing their parts /supply orders on imaginary console orders, they could have a few bad quarters until they figure that one out.
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Ruud Van De Moosdijk VP of Development, Engine Software8 years ago
I love how the article reads "policy tweaks" instead of "complete reversal on idiotic policies that pissed off the entire world and their mother". Unfortunately I think it is clearly underestimated by this writer how much good will MS has lost during E3 and it will take much longer than launch to win that back. I hope they do bounce back, and possibly make their console look less like my old VHS recorder. Anyway, a good competetion between the two platforms will keep both of the platformholders on their toes, which usually benefits the consumer.
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Your Following Statement is unsubstantiated:
Colin Sebastian says supply chain checks show Microsoft's new system gaining momentum
What supply chain and what numbers? Please provide links or source from which you made this statement...
^ This,

This whole thing is 100% nonsense. Its a fluff marketing piece

Edited 2 times. Last edit by Todd Weidner on 23rd July 2013 9:40pm

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Greg Wilcox Creator, Destroy All Fanboys! 8 years ago
Oh,Good Grief. OUTSHIP never means OUTSELL, Mr. analyst person. Can I haz your job and do it much better?
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Juliet Bathory Writer 8 years ago
In Australia the price gap between the two systems is only $50 (PS4 $549/XBone $599). Given that the PS4 is facing a $150 increase compared to the US release price and XBone is only going up by $100, price won't effect the Aussie console market too much on launch. The other thing that savvy console gamers will take into account is how much the extras will cost (controllers, headsets etc) and the fact that PS4 isn't releasing their camera device with the console. The price point on that item alone may eat away any price comparison between the two systems for those looking to get the most out of their consoles from day one (which most early adopters would).
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Saehoon Lee Founder & CEO, Pixellore8 years ago
Isnt it simply stating that ms will be able to manufacture more xbox than ps4? Maybe demand is other way around but that doesnt mean hardware numbers available is the same.
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Robert Barrow Information Security Analyst 8 years ago
I guess it all depends on how readily Sony can source GDDR5, that could be the biggest block they have to building up inventory ready for launch. If they can launch earlier than XB180 and then keep trickling supply through, throttling enough to support christmas sales, then they could possibly keep up momentum. Sony always seems to have at least one hardware component that is in short supply for launch. It seems to be tradition now!

Besides even if MS have a 3:1 ratio in the supply chain, it doesn't mean that those consoles are sold. Especially if earlier numbers like the 7:1 pre-orders in Sony's favour are to be believed. I fully expect both to sell as many as can be supplied during launch, the only telling factor will be whether one lurks on shelves when the other is hard to get.
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Saehoon Lee Founder & CEO, Pixellore8 years ago
it would be cool to see if MS has 3:1 ratio supply chain and Sony has 7:1 demand ratio and then MS gets sold out.
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Bruce Everiss Marketing Consultant 8 years ago
A lesson of history.
When PS3 was launched in 2006 Sony used it as a trojan horse to introduce two new technologies to the market. Blu Ray and Cell. Neither of which was necessary for the console to do its job.
This action made the PS3 very expensive to manufacture and to sell. So it fell flat in the market.
It was rescued by two things. Firstly the 360 had RROD which moved consumer sentiment from Microsoft back to Sony. Secondly Sony did a quick redesign stripping out many features including backward compatibility.

Now we are seeing exactly the same thing happen again, but the other way round.
Microsoft are using XBOne as a trojan horse to get large numbers of Kinect units into our living rooms. Which is not necessary for the console to do its job. But which adds enormously to the consumer's cost.
Conversely Sony have learned their lesson this time and have created a console that does the job and nothing more.

We will see how this pans out, but history is not on the side of Microsoft. You would wonder what thought processes are going on there to have bet the whole project on Kinect.

For Microsoft the real product is Live. They could have built a stripped down Live machine for under $200 and created far more demand. Maybe they will.
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Shane Sweeney Academic 8 years ago
In the US maybe, but world wide the PS3 dominated against the Xbox 360 in every territory besides the US.

I see no reason to suspect the 8th generation will be any different.
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Bruce Everiss Marketing Consultant 8 years ago
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Dan Howdle Head of Content, Existent8 years ago
Why are so many people talking as if price difference is the only issue? Not trying to troll Microsoft, but its console still has more issues that, in my opinion simply have to be fixed. Indies? Enforced Kinect? No headset? Advertising focus? Slow memory/rumoured general on-paper power inferiority?

Have we forgotten about all of these already?
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I haven't met a single person who wants a XBone yet. Everyone wants a PS4. 30-40% more powerful, $100 cheaper, and NO Kinect. It all comes down to whether Sony can actually execute at this stage, the launch dates, and how many units.

If Sony can match or beat MS in the US, then its all over.
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Daniel Hughes Studying PhD Literary Modernism, Bangor University8 years ago
@ Dan

I think too much importance is attached to price, and too little importance to the perceived value of the product. The issues you've outlined will all factor into the perceived value of Xbox One, and alongside that price tag, they don't create an impression of good value for money. If those issues were resolved, and if the software is compelling, then the same price tag can represent much greater value for money.

For me the Wii proved this. It had a low price point to start, but remained at that price point for two and a half years, at points even going up in price in Japan and the UK, which is unprecedented in videogame history. It didn't perform well solely because of a low price, it performed well because of a combination of marketing, software, and interface which meant that initial price point represented good value for money to many consumers over a surprisingly lengthy period of time.

Right now PS4 isn't doing an awful lot that represents a huge leap or paradigm shift from what current consoles do, but it is doing enough to justify the price point and represent good value for money to early adopters, judging by ongoing commentary. Microsoft can combat this problem, but they don't seem to realise that they need to work to justify exactly why an Xbox One at 430 is good value for money across the board. Addressing the issues you highlight would really shift consumer perceptions around the products, which is what ultimately dictates sales. Pricing is only one part of the puzzle.
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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development8 years ago
Maybe Microsoft care more about the mass market who would be more than happy to invest in a box that has immediate access to new films and tv shows. I rarely ever watch things on TV live unless it's something I feel the need to watch live, like a football game or f1 race. Everything else is watched On Demand or from a recording.

I guess this is just going to be a case of, let's wait and see how the consumers respond.
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Jesse Penning Content manager, Ganz8 years ago
I object, sir!
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Craig Page El Presidente, Awesome Enterprises8 years ago
Ya and the Wii U could outship the Xbox One by 7 to 1. But it won't, because no one wants that console either. PS4 is the only option for this generation.

Edited 1 times. Last edit by Craig Page on 24th July 2013 5:52pm

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Paul Jace Merchandiser 8 years ago
The Wii U has already outshipped both systems this year. Of course neither of those systems have launched yet but logical reasoning has nothing to do with speculation, especially on the internet.
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Rick Lopez Illustrator, Graphic Designer 8 years ago
All the gamestops in my area are selling more PS4's than Xboxes. I have met very few people who want an Xb1 over a PS4. Microsoft has the financial muscle to ship Xboxes... but I seriously dont think they will sell more than PS4. If anything i think there will be many Xbox1's sitting in store shelves or selling at a slower rate.
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Northernlitez IT / QA Technician, Rogers8 years ago
While anything is possible 3-1 this year is a ridiculous statement. could it sell on par with PS4...maybe. However, 4 ebgames (GameStop) in our area have the PS4 outselling the XBOX One 5-1 or 6-1. The one that I normally buy games from had PS4 at 126 and XBOX at 27. This may not show the whole pictures but I'm pretty confident that the PS4 will come out of the gates well ahead of XBOX One. I don't know if there is still fallout from E3 but everyone that I talk to will be buying the PS4..maybe it's just something in the Canadian water. I personally like both systems but the first $500 from me will be going to Sony. Microsoft will have to wait 6-12 months. Sorry, I don't normally respond to these forums but the article was too far in left field.
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Sensationalist nonsense, its equally possible the ps4 could outship the xbox one 3 to 1 this year, allot of things are possible but they sure as hell aren't likely, can we please have some editorial oversight to prevent stories like this running, wild speculation based on peoples personal wishes are not suitable story's for this site.

Sure you might like it, you might have faith in it, but remember this, Faith is a device of self-delusion, a sleight of hand done with words and emotions founded on any irrational notion that can be dreamed up. Faith is the attempt to coerce truth to surrender to whim. In simple terms, it is trying to breathe life into a lie by trying to outshine reality with the beauty of wishes, it is not an aspect that should be embraced by thinking rational men/women, however much good press the word may have received.
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