Sony Corp (NYSE: SNE) and Microsoft Corporation (NASDAQ: MSFT) have both had a series of challenges that have caused experts to question how bright their futures may be. Sony has gotten the worst of it, as the Japanese consumer electronics company has lost money year after year. One bright spot for each company has been game console sales. Sony presented more evidence of the success of its PS4 as sales crossed the 10 million mark.
Sony pointed out that PlayStation4 sales “were the fastest and strongest growth in PlayStation hardware history.” The PlayStation was introduced in 1994 and has been one of the few ongoing growth areas in Sony’s recent history.
The PlayStation has had to fend off two rivals. The first is Nintendo, which had a period of success when its Wii sold better than the PlayStation and Microsoft’s Xbox. The Wii was easier to use for most consumers, and Nintendo’s market cap became the second largest company of any traded in Japan at the time. But the lead over competitors was short lived. Nintendo never introduced follow-on products that would drive new adoption.
Unlike the PlayStation, Microsoft’s Xbox has always been a sideshow for the massive software maker. Microsoft has not had much interest in hardware until recently, when it launched a series of PCs and bought Nokia for $7.2 billion last year. While its PC products can help sales of Windows, and Nokia can aid it in the mobile OS business, the Xbox has the more modest goal of taking Microsoft into consumer living rooms. Most data released by Microsoft show that its Xbox One trails the PS4 in worldwide sales. The growth in sales will be even less important as Microsoft reinvents itself as a cloud computing company.
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Sony has to have significant success with the PS4 because its other businesses have struggled so badly. This has been particularly true of its smartphone, television screen, and camera operations. The PlayStation and Sony’s studio unit has not been able to entirely offset the losses from those other units.
Sony still has to prove that the PS4 can be the engine of strong enough profits to bring investors, skeptical of management’s turnaround plans, back to the company. At this point, sales of the gaming console favor a success.
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