DFC: Microsoft has Given Sony and the PS5 a Major Next-Gen Hardware Sales Advantage With its Xbox Series S Maneuver

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Microsoft finally officially announced its entry-level next-gen Xbox console, the Xbox Series S, yesterday, but by doing so, the company has now created a rather confusing mess for consumers looking to pick up their next next-generation Xbox console.

At least, that’s what videogame research firm DFC Intelligence writes following yesterday’s Xbox Series S announcement.  According to the firm, Microsoft’s main problem is that core game consumers will not settle for the second-best console. Even if this console is being offered at quite a stunning price point. “The price performance ratio is difficult to predict”, DFC Intelligence writes. “Microsoft was pitching the Xbox Series X as the most powerful system ever and all of the sudden there is what appears to be a neutered option at a lower price.”

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With the Xbox Series S entering the next-gen fray this November alongside the Xbox Series X, consumers looking for their next Xbox console will be presented with two options - $299 for a less-powerful, “second-class system or however much more for the full product” in the form of the Series X.

The research firm adds, “the announcement around Xbox Series S really confirms how Microsoft, in its focus on a long-term digital strategy, has really given Sony and the PlayStation 5 a big advantage when it comes to hardware sales for the upcoming generation.”

Due to the reported increased component prices, the next-gen consoles of both Sony and Microsoft are expected to be initially available at limited quantities. As such, hardware from both parties are expected to be sell out this year, and while Microsoft could potentially expand its installed user base from additional Series S sales this year, it seems that Microsoft has lost control of its Xbox sales pitch.

Whatever hardware can be delivered in 2020 will sellout. The console systems are likely to be in short supply and Microsoft may be able to manufacture more Xbox Series S units. In theory this could give Xbox a larger initial installed base.

Unfortunately, everything else is clearly in favor of the PlayStation 5. Microsoft lost control of the media message and it is looking like PS5 will be the system for those that want to play exciting new games.

The Xbox brand seems focused on a digital future for classic franchises delivered via Game Pass and cloud streaming. As we have discussed this could be a solid long-term strategy. However, for selling a high-end new game system it is less than ideal. The current Xbox One platform(s) work fine for Microsoft’s digital strategy.

While Sony has yet to reveal the price of the PS5, DFC already shared an updated console sales forecast last month, which predicts that PS5 sales will significantly outperform Xbox Series X sales.

What are your thoughts about the Microsoft’s messaging? What do you think about the Xbox Series S? Hit the comments down below.

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