In a bid to sell more units, both Sony and Microsoft have slashed prices of their PlayStation and Xbox consoles for Black Friday. This trend is apparently set to continue as the companies face hardware sales dips.
New reports from Circana analyst Mat Piscatella give valuable insight on the current US video games market. According to Piscatella's data, consumer spending on video games hardware dropped 24% year-over-year for the period from October 29 - November 25.
It's very important to note that this is one day after 2023's Black Friday sales started to kick off. This year's discounts saw significant savings on PlayStation 5 consoles as well as Xbox Series X and Series S systems. Circana's report likely includes Black Friday sales data, albeit not Cyber Monday.
US video game spending, November 2023 - Circana
- "November video game hardware spending fell 24% when compared to a year ago, to $964 million.
- "All current generation consoles experienced a double-digit percentage decline in dollar sales when compared to a year ago, with Nintendo Switch showing the sharpest drop year-on-year.
- "PlayStation 5 remained the best-selling hardware platform in both unit and dollar sales during November 2023. Xbox Series ranked 2nd across both measures.
- "Year-to-date hardware spending fell 1% when compared to the same period in 2022, at $5 billion.
- "PlayStation 5 remains the best-selling hardware platform in both units and dollars 2023 year-to-date, with Nintendo Switch placing 2nd across both measures."
Some of these savings are still going today. The official Xbox Twitter account even made a special advertisement that tells everyone the Xbox Series X is on sale for $399, which is a sizable 20% price cut and a reduction of $100 from the system's original MSRP.
Sony wants to sell as many PlayStation 5 consoles as possible so it can achieve its lofty 25 million PS5 shipment target for this fiscal year. It also helps that Sony sells each PS5 at a profit.
Microsoft, on the other hand, does not make a profit from Xbox consoles when sold at MSRP, and takes a bigger loss with holiday discounts. Microsoft's motivation is to fill out the Xbox Series installed base and cast a wider net for its real profit-generating businesses: Content and services.
