By Dan Gallagher, MarketWatch
Visitors crowd the booths of Microsoft and Sony at the E3 videogame conference in Los Angeles in order to try the Xbox One and PlayStation 4 ? both of which due to hit the market this fall.SAN FRANCISCO (MarketWatch) ? More than 48,000 people crowded into a Downtown Los Angeles venue this week to get an early peek at the Xbox One and PlayStation 4, as well as the high-profile videogames that will be available for the consoles over the next several months.
Attendance at the Electronic Entertainment Expo, or E3, was up about 5.5% this year, according to figures released Thursday by the Electronic Software Association, which sponsors the conference. That reversed last year?s 2% slip in attendance, and was likely driven by interest in the two new high-definition gaming consoles due to hit the market this fall.
Game consoles vs. mobile gaming
Sony releases long-awaited details about its coming PlayStation 4 at the Electronic Entertainment Expo, as it seeks to differentiate itself from mobile-gaming competitors.
As far as drawing buzz, the conference did not disappoint. Sony Corp. /quotes/zigman/197524/quotes/nls/sne SNE -5.47% ? /quotes/zigman/197500 JP:6758 -0.36% ?in particular sprung a surprise by announcing a $399 price tag for the PlayStation 4, which was $200 below the introductory price for its predecessor console and $100 below the launch price Microsoft /quotes/zigman/20493/quotes/nls/msft MSFT -0.91% announced for the Xbox One.
Investors and analysts largely cheered Sony for the move, sending the U.S.-listed shares of the Japanese electronics giant up more than 7% this week, while Microsoft?s shares have slipped more than 2% since the start of the conference. Still, the Xbox business still makes up only a small portion of Microsoft?s overall revenue compared to its Windows and Office businesses, while Sony too is large conglomerate with wide electronics and entertainment interests.
Sony was also commended for taking a ?pro-gamer? stance on the issues of playing used games on the new console and always-on Internet connectivity ? stating clearly that used games would not be limited, and gamers would not have to keep the console connected to the Internet if they didn?t want to.
Microsoft has said it will leave the question of fees for used games up to the publishers, but that the Xbox One will need frequent connections to the Web to work.
?Microsoft has officially stubbed its toe,? Evan Wilson of Pacific Crest wrote in a note to clients on Thursday, adding that ?the Xbox One now has a problem on its hands as far as initial sales are concerned, although there is still much to be decided.?
In a note Friday morning, Michael Pachter of Wedbush Securities wrote that ?Xbox One?s higher price point and Microsoft?s approaches to used gaming and ?always on? will likely cost Xbox One some market share in the first year or so of the cycle,? adding that Sony was ?the clear winner of this year?s E3.?
Investors have bid up the stocks of game publishers such as Electronic Arts /quotes/zigman/71356/quotes/nls/ea EA +1.49% ?, Activision Blizzard /quotes/zigman/110164/quotes/nls/atvi ATVI +0.34% ?, Take-Two Interactive /quotes/zigman/62747/quotes/nls/ttwo TTWO -0.26% and Ubisioft /quotes/zigman/163953 FR:UBI -0.58% ? ? as well as retailer GameStop /quotes/zigman/389699/quotes/nls/gme GME +3.94% ? since the first of the year, in the hopes that the new consoles will spark game sales.
Xbox One will boast extensive entertainment options
As the looming console war between Sony and Microsoft begins to heat up, the Xbox One teams stress the added value of their product being an "all-in-one entertainment solution."
But questions remain as to whether or not this will actually happen. Despite a surprisingly lower price for the PS4, each console represents an investment of several hundred dollars ? as well as $60 per game ? in an era when smartphones, tablets and social networks are offering thousands of game for free.
?I?m skeptical. I don?t think either platform has definitely convinced many as to why they need to spend so much money on a new gaming platform,? Colin Sebastian of Robert W. Baird told MarketWatch.
Wilson of Pacific Crest was even more bearish, predicting on Thursday that ?we now think this cycle may be the first down cycle for hardware.?
Others are more positive. Arvind Bhatia of Sterne Agee wrote Wednesday that ?we think there is a good chance of double-digit next-gen console unit growth in the initial years,? when compared to the same point in the previous console cycle.
Both new consoles are expected to launch this fall, but no specific dates have yet been given.
/quotes/zigman/197524/quotes/nls/sne
US : U.S.: NYSE
Volume: 5.96M
June 14, 2013 4:00p
/quotes/zigman/197500 JP : Japan: Tokyo
Volume: 22.13M
June 14, 2013 3:00p
Market Cap?1945.98 billion
/quotes/zigman/20493/quotes/nls/msft US : U.S.: Nasdaq
Volume: 46.29M
June 14, 2013 4:00p
Market Cap$287.28 billion
Rev. per Employee$806,245
/quotes/zigman/71356/quotes/nls/ea US : U.S.: Nasdaq
Volume: 3.56M
June 14, 2013 4:00p
Rev. per Employee$408,280
/quotes/zigman/110164/quotes/nls/atvi US : U.S.: Nasdaq
Volume: 3.98M
June 14, 2013 4:00p
Rev. per Employee$747,463
/quotes/zigman/62747/quotes/nls/ttwo US : U.S.: Nasdaq
Volume: 1.83M
June 14, 2013 4:00p
Rev. per Employee$497,739
/quotes/zigman/163953 FR : France: Paris
Volume: 185,843
June 14, 2013 3:37p
Market Cap?983.60 million
Rev. per Employee?187,824
/quotes/zigman/389699/quotes/nls/gme US : U.S.: NYSE
Volume: 6.05M
June 14, 2013 4:01p
Rev. per Employee$514,694
Dan Gallagher is MarketWatch's technology editor, based in San Francisco. Follow him on Twitter @MWDanGallagher.
Source: http://www.marketwatch.com/story/game-on-console-war-heats-up-this-fall-2013-06-14
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