Xbox One vs PS4 -- the truth behind the numbers

Yesterday, I reported that the PlayStation 4 is massively outselling the Xbox One. Inevitably, this sparked a debate in the comments. Is the PS4 really outselling the Xbox One? Yes, unquestionably -- the numbers speak for themselves. But at the same time there are lots of factors that should be taken into account which I didn’t cover in my original post.

Price (which I did mention) is a big factor in these uncertain financial times, and the PS4 is $100 cheaper than its rival. But the number of markets and supply chain issues all also have a huge part to play.

Firstly, the main thing to note is sales derive from supply. Any product -- be it a games console, a smartphone, or a pair of shoes -- can only be sold if it’s made available to buy in the first place. If one store has a thousand PlayStation 4s in stock and it sells five, and another store has three Xbox Ones and it sells them all -- there are two angles that can be reported. The PS4 has sold more than the Xbox One, but the Xbox One has sold better than the PS4.

Take away the knowledge of stock -- there are two stores, one selling the Xbox One and one selling the PlayStation 4 -- and the story appears black and white. Sony’s console has sold more than its rival.

Without knowing how many items were made available to buy in the first place, the truth is it’s impossible to say at this juncture that one console is selling better than the other, only that one console has sold more.

We know (because Microsoft has said so) that the Xbox One is on sale in 13 countries. The PS4 is on sale in 48 countries. So from that we can determine that there are more places where people can buy Sony’s console, and therefore you would expect it to sell a lot more. That the PS4 has only shifted a million extra consoles than the Xbox One, despite being in nearly four times as many countries, suddenly makes Sony’s "victory" seem rather hollow.

But switching things around again, those 48 countries include lesser territories, such as Nicaragua, Uruguay and Kuwait, and we don’t know how many consoles there are in each country. Sony could have two consoles in the whole of Oman and still include it in the list.

Similarly, while Xbox One might be in significantly fewer countries, they are places where you’d expect more consoles to be sold, and Microsoft might have more consoles there than Sony has. If there are more Xbox Ones than PlayStation 4s for sale in the US, you would expect Microsoft’s console to rack up better numbers in that territory. Yusuf Mehdi, Corporate Vice President of Marketing, Strategy and Business, Xbox said the Xbox One had "become the fastest-selling console in the US during our launch month in November". (I've asked NPD for some independent US Xbox One and PS4 sales data and will update this post when I get it).

The PS4 is likely to sell phenomenally well in Japan when it finally comes out there in February and that home advantage will allow Sony to extend its lead in the number of consoles sold so far.

Sony or Microsoft could "win" the battle by flooding the market with their consoles, but that would be bad business of course. There’s no point in reporting massive sales if you’re also going to report huge financial losses and left over stock (or worse still poor sales and huge financial losses due to surplus stock -- as was the case with the original Surface RT).

And then there’s the issue of supply being able to keep up with demand. If neither company can produce enough consoles to match demand, then the early winner will be the firm which manages to get more units into the supply chain.

Summing Up

So what does this all mean? Essentially that the PlayStation 4 has sold a million more consoles than the Xbox One, but until both Microsoft and Sony provide a breakdown of stock and sales by territory (which isn’t going to happen), there’s no way of saying who is "winning" at this point. And ultimately, if past history is anything to go by, sales will likely balance out in the end anyway, with the Xbox One selling better in the US, the PS4 selling much, much better in Japan, and both consoles doing about the same numbers in total.

You can view an interesting breakdown of past console sales at VGChartz.

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