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New Sony, Microsoft game consoles in changed world

Pursuing hardcore players, companies face off again — but lesser rivals may hurt them both

Fans played video games on Xbox One consoles during a midnight launch event in New York City last week.LUCAS JACKSON/Reuters

The last time Microsoft Corp. and Sony Corp. introduced video game consoles, Netflix movies arrived by mail, cellphones were for making calls, and game machines were for playing games.

Much has changed in those eight years. The new Sony PlayStation 4 and Microsoft Xbox One are engineered for a world in which phones are pocket-size gaming devices, movies are streamed over the Internet, and a successful video game console needs to do more than play “Call of Duty.”

Sony and Microsoft are adapting to the new order in different ways. Their new consoles offer entertainment choices that go well beyond the latest fast-twitch action games. But the PS4, priced at $399, is being proudly marketed to enthusiasts for whom the play’s the thing.


Microsoft wants that audience, too, but the $499 Xbox One is designed to fulfill the company’s longstanding ambition to be a home entertainment hub, controlling access to gaming, TV viewing, and Internet streaming in millions of living rooms.

With sales of more than one million PS4s in North America alone during its debut weekend, John Koller, vice president of marketing at Sony Computer Entertainment America, is confident his company is on the right track.

“We’ve always stated that we stand with gamers,” Koller said. “Our focus, first and foremost, was to create the best gaming destination for all types of gamers.”

The PS4 has the streaming multimedia features such as Netflix, Hulu Plus, and NBA GameTime. But Koller said such services are offered only if they have proven appeal.

“We have really no desire to splatter apps and media features across our platform and hope that gamers notice and actually care,” Koller said.

The PS4’s notable upgrades are mostly game-centric.

For instance, a new “share” feature lets a user broadcast a live video stream of the game being played. Friends or rivals can watch the video, offer suggestions on how to win, or hurl insults. Another feature will connect Sony’s PlayStation Vita hand-held game device to the PS4, allowing a player to play a PS4 game on the Vita.


Meanwhile, Ben Smith, head of television for the Xbox One team, said Microsoft has been thinking beyond the game controller for years.

“While gaming was our core competency, really what we were doing was bringing entertainment to the living room,” Smith said.

In 2008, Microsoft’s Xbox 360 became the first game console to offer video streaming with Netflix. The new Xbox One goes much further, by acting as a surrogate set-top box for delivering live cable TV programs, as well as Internet entertainment and games.

With the older Xbox 360, or any Sony PlayStation, a user must switch from game console to the cable company’s box to watch a TV show. But the Xbox One connects to the cable company box and feeds shows to the television, as well as games and Internet streams.

The console’s “snap” feature lets a user enjoy two entertainment options at once. He or she can display a live football game in one corner of the screen while continuing to play “Battlefield 4” on the rest of the screen.

In addition, the Xbox One continues the integration of speech controls that began in 2010, when Microsoft added the Kinect controller device as an optional feature.

Visitors checked out Sony Computer Entertainment’s PlayStation 4 at the Tokyo Game Show in Chiba, near Tokyo, in September.YOSHIKAZU TSUNO/AFP/GETTY IMAGES/FILE 2013

Kinect is a key component of the Xbox One. Its cameras allow the user to play games and control video options using hand gestures or body motions. In addition, a user can turn the TV on or off, or tune in a favorite show, entirely by issuing spoken commands.


But the Xbox One is up against a host of less sophisticated but less expensive options. Internet streaming devices such as Apple TV, Roku, and Google Inc.’s Chromecast deliver sharp online video for less than $100.

According to the research firm Parks Associates, about 14 percent of US homes with broadband access already have one of these video players. And that doesn’t count the millions of homes with other devices that can stream Internet videos, such as Blu-ray video disk players. Parks Associates estimates that TV watchers worldwide will buy 330 million such devices by 2017.

Another rival technology, the smart TV, can tap into online entertainment by plugging directly into the Internet. Smart TVs are often criticized for being confusing and difficult to use, compared to streaming boxes like Roku.

“To me, a smart TV doesn’t have any reason to exist,” said consumer electronics analyst Michael Pachter, of Wedbush Securities in Los Angeles.

But a 2012 survey by NPD Group found that about 60 percent of smart TV owners use them to watch Internet videos. And smart TV features are becoming standard on many new sets. Already, there are smart sets in 25 percent of US households, according to a May report from TDG Research in Plano, Texas.


And just as there are many ways to access Internet videos, there are many new ways to play games, including smartphones and tablet computers.

Lewis Ward, a game industry analyst at IDC Corp. in Framingham, said that competition from casual games badly hurt Nintendo Co.’s slow-selling game console, the Wii U, which has sold less than four million units worldwide over the past year. But Ward said Nintendo customers tend to be less passionate about gaming, and more likely to take up casual games.

“Looking at the PS4 and Xbox One, those do have a hard-core audience, a large one,” said Ward, who predicted strong sales for both new consoles.

James McQuivey, a media analyst at Forrester Research in Cambridge, isn’t as confident. He noted that the previous Microsoft and Sony consoles, the Xbox 360 and PlayStation 3, have each sold about 80 million units worldwide. But because of rivalry from casual gaming devices, “there is a very significant possibility that the consoles will fail to reach the size they achieved in the last generation,” McQuivey said.

Analyst Michael Pachter of Wedbush Securities in Los Angeles is down on Microsoft’s Xbox One, because it costs $100 more than the PS4.

“I think you’ll see Sony outsell Microsoft by 25 percent, and that’s a function of price,” he predicted. Still, he expected both consoles to do well in the long run and added that Microsoft’s sales could catch up in coming years, “once they convince consumers that that extra $100 is money well spent.”


Hiawatha Bray can be reached at