There will be lines around the block as Americans wait with fevered anticipation to cast their vote in the most-anticipated ballot in years.
The two polarized camps are adamant their choice is better. But which platform will win? Xbox or PlayStation?
Yes, consumers will shortly be deciding the race in something that really matters: videogames. Microsoft (MSFT) will launch the Xbox Series X on November 10, as well as the cheaper Xbox Series S, followed in quick step by Sony (SNE) with the PlayStation 5, out on November 12. Apere Analysis anticipates the two will sell close to nine million units between now and the end of the year.
Console launches are feverish at the best of times. But with much of the world facing continued coronavirus-related stay-at-home orders, these new machines present an unprecedented opportunity for the companies to push their hardware and the games that they support. Videogames are also increasingly cross-pollinating industries such as music and movies, voiced and acted out by sensor-suit greenscreen stars from both industries.
The British grime rapper Stormzy is, for instance, both a character and a source of the soundtrack for the new London-set political-resistance action-adventure game Watch Dogs: Legion. The game from the Toronto studio of French videogame maker Ubisoft (UBSFF) came out on October 29 for both the PS4 and Xbox One. Players take on the role of hackers trying to clear their good name in a dystopian society run by an oppressive surveillance state.
The game will also be a launch title for the PS5 and Xbox X. Both consoles, with solid-state drives, are focusing on speed rather than flashy new functions, as well as supporting ultra-high-res displays. Loading times should largely be a thing of the past with the new hardware, which will generally be "backward compatible" to support games playable on the previous-gen consoles. The Xbox X says it will be "8K ready," while the PS5 will have loading times that are 100 times faster than the PS4.
Videogames are the perfect product for the pandemic era. Live music, live sports and movie theaters are all functioning in drastically scaled-down versions, if at all. But gaming, just like streaming of TV shows and movies, is one of the few winners as we stay within our four walls.
Consoles themselves are a bit of a throwback. There are plenty of games available straight to your phone, where 5G will also enable superfast streaming. The console makers already support digital downloads for most games, although they may also come on game cards. A company like Sony is perfectly poised to benefit from its multiple entertainment earnings streams.
It may need to. Given the problems all supply chains and retailers are having, Sony may lose US$170 per PS5 it sells, according to the Financial Times, and may take three years to break even on the machines.
Microsoft also warns that its Xbox launches will likely provide a temporary lag in profits. What the console makers give up in short-term income, they gain in long-term loyalty to gamers locked into their systems.
The videogame industry is now worth an estimated US$145 billion per year. The PS5 will sell for US$499, or US$100 more than the PS4. It will also have a disk-free version at US$399. The Xbox Series X will also run you US$499, with the disk-free, all-digital Xbox Series S selling at US$299.
Sony last week posted better-than-expected numbers for the September quarter. With operating profits up 14% to ¥317.8 billion (US$2.9 billion), the company outdid analyst forecasts, and raised its own guidance for the full fiscal year through March 2021 (this is its mid-year reporting) to ¥700 billion (US$6.4 billion), up 12.9% from its previous prediction.
The profits are flowing from entertainment. Besides videogames, Sony has a huge hit on its hands with the anime movie Demon Slayer: Mugen Train. The movie instalment of a hit manga comic and TV show has broken box-office records in Japan, becoming the fastest film to hit ¥10 billion in sales within 10 days of its October 16 release. The convenience-store chain Lawson (LWWLY) says it has sold more than 10 million Demon Slayer products featuring graphics of the characters.
Sony recently lost Huawei Technologies as a customer for its image-sensor sales, writing down its inventories as a result, and is not expecting to sell any sensors to Huawei for the rest of its fiscal year. That will force it to push back capex spending in that sector.
But gaming software, music streaming and online TV are going gangbusters. Stay-at-home demand is propelling profits. The videogame industry has not been spared the effects of Covid-19 on the business side, however. Game releases such as Xbox's flagship followup Halo Infinite have been pushed back because the software developers have had to work from home, which has resulted in slower teamwork and development time.
The PS5 launch will cause a temporary dip in Sony's gaming-division profits from ¥229 billion (US$2.1 billion) in the first half of this fiscal year (through September) to just ¥71 billion (US$653 million) in the six months through March.
Ubisoft as well as Square Enix, the company behind the Final Fantasy series of best-selling games, have both also warned recently that their release times for new games have been delayed due to disruption to work schedules stemming from the pandemic.
Sony's launch of the PlayStation 4 in November 2013 caused frenzied pre-Christmas shopping scenes. Microsoft's Xbox One came out a few days later, creating much the same consumer froth. This time around, the companies have been taking advanced orders online, and may look to avoid public scenes of large groups of crowds gathering to snap up their new purchases.
Sony is going to great expense to ensure a big splash of a launch, though. It is air freighting consoles made in China into the United States to ensure they're there in time for Christmas shopping. It will launch in the United States, Canada, Japan, South Korea, Mexico, Australia and New Zealand on November 12, and the rest of the world on November 19. The Xbox will go out to some 40 markets at once on November 10.
Apparently, I'm sitting in the cheapest market in which to buy an Xbox Series X. The unit will sell for HK$3,380 (US$430) here in Hong Kong. I'm just getting my hands and head around the Nintendo (NTDOF) Switch that my kids bought... and to which I'm now addicted. But maybe this time I should put a PS5 or Xbox on my stocking wish list.