Talking Point: Do the December NPD Results Flag a Flaw in PS4's Strategy?
Posted by Sammy Barker
Chink in the armour
Isn’t it funny how your expectations can adapt in little to no time at all? This intrepid author has spent the past seven or so years scouring negative PlayStation 3 news, but within the span of a couple of months, the outlook of Sony’s home console market has significantly changed. Since its release late last year, the PlayStation 4 has been utterly obliterating sales records around the globe, and subsequently annihilating the competition in the process – but that wasn’t quite case in the latest December NPD report, where the Xbox One hurried away with the next-gen crown. The question is: should this temporary upset send alarm bells ringing in SCEA president Jack Tretton’s office, or is it just a minor bump in the road?
Well, it’s pivotal that we paint some context onto this page before worrying over one month’s statistics. For starters, the platform holder was eager to point out that it’s still leading the new console battle in the United States, irrespective of Microsoft’s momentary success. “[The] PS4 remains the cumulative leader for next-gen console sales in the U.S. since the launch on 15th November,” said a mathematically acute corporate communications director Dan Race in a press release published overnight. “We sold every PS4 available at retail in the U.S. and were out of stock in December due to overwhelming consumer demand.” The system also finds itself sitting on an install base of 4.2 million units globally to date, compared to its competitor’s three million.
It doesn’t take a Harvard business graduate to come to the conclusion that Sony’s worldwide approach is what harmed it over the busy shopping period in the United States, then. Assuming that you can actually find stock, the Japanese giant’s hot new hardware is currently available in a whopping 53 countries, with its competitor only reaching a meagre 13 nations. Furthermore, the firm is no doubt stockpiling inventory behind-the-scenes right now, as it readies for yet another major launch in Japan, where it’s invested significant effort into accruing an enormous software lineup tailored to the nation’s tastes. Even if the console tails off in the portable focused market, we suspect that the manufacturer is counting on a strong first week.
Of course, this strategy is pulling units off North American shelves. Unfortunately for the firm, it exists in an environment where it can only produce a finite number of formats, and despite speculation that it has actually opened a number of factories in Japan to construct the machines alongside China, it’s clearly still not getting enough devices into the channel to satisfy demand. This issue is especially evident in our native UK, where consoles sell out almost as quickly as they arrive; anecdotally we’re informed that the same problem is occurring around the globe. The real predicament for the PlayStation maker is that the device’s unavailability could push curious consumers in the wrong direction.
Microsoft may argue that it’s the strength of its software lineup and the quality of its hardware that prompted the Xbox One’s stellar sales in North America over the busy holiday shopping season – and it would probably be right. However, there’s no doubt that Sony’s inability to actually get stock on store shelves played right into the Redmond-based firm’s eager hands. With no viable alternative readily on offer, consumers looking to play third-party titles such as Battlefield 4 and Call of Duty: Ghosts on a new piece of hardware over the key Christmas period may not have had to choose which next-gen console to pick. And while it’s not exactly a catastrophe for the PS4, it’s something that the Japanese giant is going to have to address.
The real challenge that the PlayStation maker faces is that it will continue to get outshipped on its competitor’s home turf if Microsoft continues with its current strategy. And that leaves it with a real quandary: does it re-route the majority its inventory to the all-important North American market, or continue to establish itself in territories where its opponent hasn’t even arrived yet? While smaller European nations like Greece may not represent a particularly large proportion of the global audience, the Japanese giant may rightfully argue that by reaching the region it’s establishing the console in the territory – and that may make it difficult for Microsoft to compete in the country when the Xbox One eventually arrives.
Despite this, though, it’s hard to understate the North American market’s importance. Not only is it by far the biggest environment for video game sales, but it can also act as a tastemaker for other territories such as the UK. Sony’s been lucky that the price-sensitive nature of the nation has allowed the PS4 to establish a significant lead, but with the Xbox 360 still outrageously popular on these shores, it’s not hard to see how a swing in momentum – perhaps accelerated by PS4 stock shortages – could reverse the current scenario with ease. After all, nobody wants to back a losing horse, and the industry’s ongoing obsession with the United States certainly painted the PS3 as a bit of slowcoach, despite it actually selling at a faster pace than Microsoft’s machine in most parts of the world.
So, is Sony’s global approach with the PS4 a blessing or a curse? It’s honestly probably a little bit of both. We imagine that the executives at the company’s North American headquarters were cursing into their coffee this morning, as it’s almost certain stock limitations forced it to fall behind the Xbox One in December. However, its competitor has also gifted the company with an opportunity to establish a really strong lead in areas outside of the United States, and it would be incompetent of the organisation to not take advantage of that. In truth, it’s too early to assume anything – and it’s not like a single month’s NPD report is going to mean much in the long-term. One thing that it does tell us, though, is that the Japanese giant desperately needs to get new stock on store shelves.
Do you think that Sony should have focused more on North America with the PS4, or was it right to capitalise on Microsoft’s delays around the globe? Supply the site with a comment in the interactive space below.
Should Sony have sent more PS4 stock to North America? (80 votes)
Yes, it should have made smaller nations wait while it satisfies demand in the States
Hmm, I'm not really sure what to think
No, it’s made the right decision to establish the device in countries around the world
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