Is Microsoft’s strategy working?
It seems like early sales and feedback for the Xbox One X, the super powered iteration on the Xbox One that Microsoft released today, have been positive enough that analysis firm IHS Markit feels comfortable almost doubling its forecast for the console’s sales for 2017. Piers Harding-Rolls, Director of Research and Analysis Games at IHS Markit, told GamesIndustry that they now believe the console will sell 900,000 units in 2017, up from their previous forecast of 500,000.
“Feedback on pre-order volume for both the limited edition Project Scorpio Xbox One X and for the standard version of the X console has led us to increase our 2017 sell-through forecast for Xbox One X,” Haring-Rolls said. “The Project Scorpio limited edition pre-order strategy has been particularly effective in driving what is expected to be a robust launch week in key sales territories. IHS Markit has therefore increased its 2017 forecast from 500,000 to 900,000 units. At this level, Xbox One share of total Q4 2017 Xbox One console family sales will be close to 20 percent, similar to the performance of PS4 Pro at launch. If Microsoft outperforms and delivers sales in excess of this forecast it will be considered a major launch success.”
There has been little doubt that Microsoft’s strategy of hyping the system for over a year, and making it an event surrounding the return of the Xbox brand to its roots (the Xbox line has a heritage of always being powerful, something that was lost with the original Xbox One) has been successful- whether or not this success is sustainable is what remains to be seen. Harding-Rolls thinks that in spite of this success, the Xbox One X will not change the tide of the console war against Sony.
“Xbox One X is poised to give the company a boost in its ambition to compete more effectively with PS4 Pro in strategically important markets of the USA and UK,” he said. “Other select markets, such as Germany in Europe with its PC gaming heritage, are also forecast to deliver solid launch traction. Overall, however, IHS Markit does not expect Xbox One X to have a dramatic impact on market share between Sony and Microsoft in continental Europe as the market’s current momentum is well entrenched. IHS Markit currently forecasts the Western Europe installed base of PS4 family of consoles to reach 26 million by the end of 2017 compared to 8 million for the Xbox One family of consoles.
“Sales of the more expensive Xbox One X console will also help mitigate the fall in Xbox One S hardware average sales price which in recent fiscal quarters has undermined the positive impact felt by Microsoft of increased revenues from software and services. As such, Microsoft’s games business-related revenue is expected to increase year-on-year in Q4 2017.”
The Xbox One X is available now- hopefully the launch goes well for Microsoft, and we get to hear some concrete numbers about the system’s performance in the coming weeks and months.