E3 Showdown: Microsoft and Sony Engage in Heated Pre-Event Rivalry

Strategic Insights -

In the highly competitive video-game industry, companies are pulling out all the stops to gain an edge ahead of the Electronic Entertainment Expo (E3), the industry's premier showcase event. Microsoft's decision to preview its upcoming Xbox 360 on MTV, just a week before the event, has sparked a heated pre-E3 rivalry with Sony, which has traditionally held its press conference on the eve of the show. This year, Sony has broken tradition, scheduling its conference a day earlier, only to have Microsoft one-up it by announcing its MTV show. The competition between the two companies has reached a fever pitch, with each attempting to position itself as the leader in the console market.

Key Takeaways:

  • Microsoft's decision to preview the Xbox 360 on MTV has been seen as a tactical effort to gain an edge over Sony, according to Goldman Sachs analyst Rick Sherlund.
  • The MTV show has given Microsoft a massive worldwide audience, forcing Sony to respond, according to P.J. McNealy, a video-game industry analyst with American Technology Research.
  • Sony has sold 47.3 million PlayStation consoles in North America since October 2000, for 56 percent of the market, compared with 25 percent for the Xbox and 19 percent for Nintendo's GameCube.
  • Microsoft's Xbox 360 is expected to hit stores this holiday season, four years after the first Xbox, and perhaps a year before new systems from Sony and Nintendo.
  • Nintendo has scheduled its news conference for tomorrow, and will be showcasing its upcoming Revolution system, which will not be released this year.
  • The company's decision to hold its conference in June has allowed retailers and consumers to get a head start on the holiday season, with three to four months to polish off their preparations.

Statistics:

  • Sony has sold 47.3 million PlayStation consoles in North America since October 2000 (Bloomberg News)
  • Microsoft's Xbox has a 25 percent market share in North America, compared with 56 percent for the PlayStation (Bloomberg News)
  • Nintendo's GameCube has a 19 percent market share in North America (Bloomberg News)
  • Xbox 360 is expected to hit stores this holiday season (Microsoft)
  • Nintendo's Revolution system will not be released this year (Nintendo spokeswoman Beth Llewelyn)

Sources:

  • Bloomberg News: "PlayStation Sales Hit 20 million in North America" (April report by Piper Jaffray & Co. analyst Anthony Gikas)
  • Newsday: "Microsoft, Sony in Pre-E3 Battle of the wits" (May 15, 2005)