New statements from Electronic Arts suggest that Sony’s PlayStation 4 has sold 2.5 times as many consoles as Microsoft’s Xbox One through the end of 2017, with Sony now controlling over 70 percent of the “two-console” market worldwide.
As Variety noticed this morning, the numbers can be derived from a recent EA investor conference call, where CEO Andrew Wilson mentions “sales of current-generation consoles from Microsoft and Sony” totaling 103 million at the end of 2017. Combine that with Sony’s own reports of 73.6 million consoles sold through the end of 2017, and you get a rough estimate of 29.4 million Xbox One consoles on the market. That amounts to just under 40 percent of the PS4’s reported sales.
Even with a bit of wiggle room to account for EA’s market-size estimation methods, that’s an extremely tepid result for Microsoft’s console. The last time public estimates of the Xbox One’s installed base leaked out at the beginning of 2017, they fell in the 25 million to 30 million unit range, suggesting Microsoft sold less than five million systems in the 2017 calendar year. The PlayStation 4, meanwhile sold roughly 20 million consoles in 2017, expanding its already sizable lead in overall installed base.
“Key metrics for success”
Despite the grim comparison for Microsoft, there are signs that the Xbox One’s relative sales problems are not distributed evenly worldwide. The system has performed historically badly in the Japanese market, while the Xbox One outsold the PS4 in the United States as recently as December, according to NPD. There are other reports that suggest the Xbox One is relatively stronger in North America than other regions, which can be obscured by worldwide statistics.
Microsoft stopped directly reporting on Xbox One unit sales years ago and these days says that “engagement,” rather than raw console unit sales, are the company’s “key metric for success.” The company points to 59 million active Xbox Live users as a sign of the health of its gaming business, though much of that number likely represents users of the Windows 10 Xbox app and not the console side of the business.
Microsoft has been downplaying relative console sales since at least 2015, when Executive President of Gaming Phil Spencer said the company wasn’t overly concerned about underperforming compared to Sony. “[Market] share is important, but more important than share is are we gaining new customers, are they buying games, are they engaged in the service,” he said at the time. “[Sony and Nintendo] can have success and it doesn’t necessarily come at the expense of what Microsoft’s main ambitions are.”
Microsoft reported gaming revenues were up 18 percent in the latest reporting quarter, with revenue for “Xbox software and services” up 24 percent. But the company no longer fully separates out console revenues from overall gaming revenues, making it hard to say if the console side of Microsoft’s gaming business is profitable on its own. Microsoft insider Paul Thurrot said last July that the Xbox business “has never actually turned a profit,” for what it’s worth.
Game makers are paying attention
All that said, Sony’s relative dominance in console sales can’t help but make the Xbox One less appealing for developers and publishers, especially those looking to target just one console. While an audience of close to 30 million Xbox One owners isn’t exactly easy for big game makers to ignore, the fact that Sony has a potential audience well over twice as big is equally hard to ignore.
Microsoft has had long-identified problems attracting as many big-budget exclusive games as the PlayStation 4, a problem exacerbated by the high-profile cancellations of exclusives like Fable Legends, and Scalebound. These relative sales numbers could go a long way to helping explain why that is. Even when it comes to Microsoft’s internal, first-party game development, the Xbox One’s smaller installed base likely makes it harder to justify bigger budgets to develop exclusive software.
Despite the Xbox One’s current market struggles, it’s important to remember that Microsoft endured even worse relative performance with the original Xbox, which sold less than 25 million units worldwide to the PlayStation 2’s dominant 150 million. Microsoft stuck it out through that console generation, then saw the Xbox 360 reach relative sales parity with the PlayStation 3 in the following generation. Given that, Microsoft could easily regroup for the seemingly inevitable successor to the Xbox One in the coming years, which wouldn’t necessarily be plagued by the same kinds of problems that hurt the Xbox One’s launch.
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