Technology of the week-Group 36 Microsoft Xbox VS Sony PlayStation

This report talks about the two major players in the video game industry and how these act as a platform for the consumers and the video game producers. The revenue sources for these players in the console industry have been discussed. Also how these console developers are vying for more of the customer attention by offering new launches has been mentioned.

Platform Networks: The Video Game Industry

In the video game industry, the intermediary or platform is represented by the console producer – in this case Microsoft with Xbox and Sony with Playstation. The two sides of the market, which connect through this platform, are the consumers and the video game developers. In the video game industry, consumers are seen as the ‘subsidy’, while game developers are viewed as the ‘money side’ . Value grows as the platform matches the demand from both sides, so video game developers prefer platforms that have a critical mass of players while players favor platforms with a greater variety of games.


PlayStation is a series of video game consoles created and developed by Sony Computer Entertainment. This brand was first introduced on December 3, 1994 in Japan with the launch of the original PlayStation console system. It now consists of four home consoles, a media center, an online service, a line of controllers, as well as multiple magazines.


Xbox One vision is “taking over the living room” but the business model has not really changed from the Microsoft`s first console in 2001 – gamers pay on average €60 for a game before they are able to play the game they wanted. Developers took major cut from games they sell and platform providers (Microsoft) need to find more ways to make profit. The business model isn´t any more that you only try to sell as many games and consoles as you can with high profit margins.

PlayStation VS Xbox

The main sources of two consoles’ revenue are the same, video game developers and console players. For Xbox, they put more focus on increasing its install base. On the other hand, PlayStation TV has launched to compete with Apple TV or Amazon’s Fire TV while still focus video gaming.


In Xbox, mixed bundling is always the common strategy, which ensures all the important feature can be seen from this bundling. However, the major cost of PlayStation has till be the manufacture cost of consoles. Moreover, after launch the PlayStation TV, the maintenance of cloud network service can be increasing important as well.

Distribution channel
Due to its wide electronic business network, PlayStation is available in major online and offline retail store in more than countries while Xbox mainly use third party platform like Amazon and GameStop to sell its devices.

Xbox has partnership with Netflix to enable player to watch TV or movie on their devices as well. For PlayStation, they put effort on many sports event and tried to partner with popular plays to attract the attention of buyers.




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