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Microsoft (NASDAQ: MSFT) is in mortal competition with Sony (NYSE: SNE). The Xbox 360 wants to destroy the PlayStation 3. Of course, both would like to take out the Nintendo (OTC: NTDOY) Wii, but that's a pipe dream at this point. Microsoft mainly wants to claim victory over Sony because the systems of those two companies are more comparable to each other than they are to the Wii. And it looks like the most recent Black Friday may have been a win for Microsoft.
According to this source, the Xbox 360 outsold the PlayStation 3 by a margin of three-to-one. Also, Microsoft increased its console sales on Black Friday by 25% on a year-over-year basis. This data comes from Microsoft itself. Assuming it is close to accurate, Sony continues to find itself in a terrible position. Really, this current console cycle has been difficult for the PlayStation franchise. But while Microsoft won bragging rights, I can't help but wonder if the real winner from this increase in Xbox 360's installed user base is actually Activision Blizzard (NASDAQ: ATVI). It's currently my favorite publisher, and I own it in my portfolio. And given that the article I cited mentions the fact that the Xbox 360 enjoys a healthy game attach rate (the game attach rate is an indicator of how many software titles are purchased per console for a particular system), I figure that a lot of the new Xbox 360 owners will be attaching titles such as Call of Duty and Guitar Hero to their systems. These two brands play very well on the powerful console, and they are must-own games for a lot of users.
Admittedly, I'm sure other publishers will benefit from all the new Xbox 360 owners. Electronic Arts (NASDAQ: ERTS), THQ (NASDAQ: THQI), and Take-Two Interactive (NASDAQ: TTWO) are all obviously happy over Microsoft's Black Friday performance. But I believe Activision Blizzard to be the best positioned of the group. Its portfolio should rock over the holidays, and I think the company will take full advantage of all the console sales from now until the new year.
Disclosure: I own Activision Blizzard; positions can change at any time.
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Reader Comments (Page 1 of 1)
12-03-2008 @ 12:44PM
Angel said...
I am shocked that Xbox is doing so well. The console is a piece of crap. We purchased the Xbox Elite, spent $650.00 on console and accessories and a few games, only to get the red ring of death. Then after researching the problem, we find that it is very common, yet the only thing they have done is to allow you to send your Xbox in and wait for over a month and a half to even get it back(that was with good timing). I am VERY disappointed with Microsoft and I fill that since the problem is so widespread, they should have set up tech sites in major cities as a sign of goodwill. This is ridiculous. DON'T BUY THIS SYSTEM.
12-03-2008 @ 2:01PM
Mike O said...
This is interesting, considering that a number of friends bought a PlayStation 3 recently. Not one of them considered the Wii and only one pondered the 360.
My guess is that, purely for gaming, more folks opted for the 360 because of the lower price point. They didn't consider Blu-ray in the equation.
12-03-2008 @ 6:25PM
Peter V said...
Mike O "blu-ray" is your sales pitch!?
blu-ray month-to-month sales are on a steady decline, with a small bump for the month on Nov.(maybe). One of the biggest cases for owning a ps3 is now a liability
12-05-2008 @ 4:28PM
badmojo42 said...
Angel - so it's MS fault you didn't read up on a device before you purchased it. Red circle of death has been around for quite some time.
I've had my Xbox 360 ever since halo 3 came out, not a single problem (knock on wood) though that might be because I don't leave the console inside a closed box with no ventilation....