Sony's Missteps In North America

[Arkaign]

At this point I don't even think Sony is concerned about being tied with MS in the US/UK. Globally the gen is set in stone, and they will command a huge lead throughout the gen. More consoles are sold outside of the US in total than are sold in it, so they have already succeeded far more than they ever thought they could.

I also have a new theory that I am closer and closer to feeling is 100% accurate :

It's EXPENSIVE to launch a flagship console. I mean it's crazy huge investment to do one. The profits on console gens always come after the initial costs are covered for R&D, initial marketing, legal, yadda yadda, and as time goes on, costs lower considerably, until by the later years money is piling in from the large install base + subscriptions/accessories/etc. So it's in Sony's best interest for gen8 to last as long as they can make it.

Now what happens if Sony gets too focused on crushing Microsoft everywhere? Say they drop the PS4 to $299 with a game. PS4 would annihilate the X1 in the US and UK, and probably drive the X1 completely out of stores in the rest of the world. That would actually be a huge gamble based on Microsoft's response to completely losing gen8. Microsoft might exit the gaming market, which would be a huge victory for Sony, but a couple of other possibilities might threaten Sony more. Gaming PCs are more common outside of the US than in it, so one Microsoft response could be to move Xbox to PC. All the big IPs, maybe a partnership or buyout of Valve, if Microsoft wanted to, they could even sell Xbox-branded PCs, and it wouldn't cost much to do.

But the even more likely scenario is that Microsoft, who is never too hesitant to waste money, would fast-track a gen9 console, and sell it at a huge loss in order to try to get back in the game. With x86 arch, they could even make it backwards compatible with X1 games. If Microsoft was successful in forcing a quick end to Gen8 just to see the world burn, then Sony would have a huge problem on their hands.

The PS4 is pretty much aimed directly at 100M consoles or more by staying the course. Price cuts will come, but they're not out to be a loss leader or try to win purely for the sake of winning. If they do things right, they can make this the most profitable console gen of all time for themselves. PS2 gen wasn't that long, and they didn't have online fees. PS4 should get close to PS2 install base numbers while having a higher profitability along the way.

So that's how I see it. I think Sony actually does better by splitting the US/UK with Microsoft and owning the rest of the world than trying to bully their way into total global domination. If Microsoft can see a ~50m generation for the X1 over 5-7 years and easy profits, I think they stay the course. Sony will have 100-120m total, and everyone wins. But if Sony turns the screws and makes it more like a 35-40m generation for the X1, then that may convince Microsoft to hot-launch gen9 early, and that screws everyone. And in a 'screw-everyone' move, Sony has a lot more to lose.