Sony's PS3 Outsells Microsoft's Xbox 360--But Will That Last?

Sony Playstation 3
Source: Sony
Sony Playstation 3

For Sony, it's about time. For Microsoft, "worry time" might be upon it. What's stunning, however, is how long it took for Sony to re-assert itself in the video game console market and shift the tide that swallowed up its industry lead.

The market research group NPD reports that Sony, for the first time, watched its PlayStation 3 outsell Microsoft's Xbox 360 in January, selling 269,000 units to Xbox's 230,000. Never has a 17 percent spread looked so sweet, or so nerve-racking, depending on what part of the console market you're rooting for.

Sony has had huge problems convincing consumers that such a pricey game console is worth it. Never mind the whizz-bang technology inside; the mini-supercomputer as some have called it; the cornerstone of a new kind of digital living room. Shoppers weren't buying it. They looked at the console, they compared the number of titles available for PS3 and Xbox 360, they may even have looked at Nintendo's Wii, though it's obviously a far different player experience. And those shoppers did one of two things: They either bought Xbox; or they went with PS2. And if they already had a PS2, they weren't trading up. It has become a major PR problem for Sony.

Until now.

There are forces outside the gaming world that are gaining momentum for Sony. Not the least of which is the strength of Blu-ray. I detailed this in my previous post, but now that Blu-ray has won the next-generation DVD format war against the Microsoft and Toshiba backed HD-DVD format, the flood gates might open for PlayStation 3. I remember telling Robbie Bach at Microsoft how smart the company looked for NOT including an HD-DVD player inside Xbox 360s. He smiled and said absolutely! But as smart as that was, it seems Sony's move now to include the Blu-ray DVD player inside those PlayStation 3s was a stroke of genius. Call it delayed genius, since the move may only now be beginning to pay off.

But this war is far from over, and counting out Microsoft at this early stage ignores some other very key data points from NPD: Microsoft sold $297 million worth of Xbox-related platform products (hardware, software and accessories combined) compared to $244 million on Nintendo's Wii and $219 million on PS3. Further, $159 million was spent on Xbox 360 games alone in January compared to $131 million on Wii and only $80 million for PS3. Oh, and just for good measure, 127,000 more additional "Halo 3" units sold during January.

The Sony news is significant, rest assured. New titles will also generate more momentum, including "Resistance 2" and "Metal Gear." So much so that Citigroup released a note to clients earlier today saying, "We believe momentum is just beginning to build for the PS3." It's been quite a while since we've seen that kind of optimism.

Sure, Microsoft still has the vast majority of exclusive, hot titles, but Sony is staging a comeback. Microsoft will say there was a shortfall to Sony in January because the company failed to properly estimate sales for January and therefore suffered a shortage of units. That's a little hard to believe following the strong sales the company enjoyed during the holiday shopping season, and the fact that it's been on the market for a year longer than PS3. You'd think it would have its forecasting model down.

Still, one month does not a trend make. Let's see what Sony does this month and next. A few more months like January and Sony can replace its "Underdog" moniker with "Comeback Kid" instead.

Questions? Comments?