PS4 vs Xbox One: Sony Drops Price as Xbox One Dominates Latin America
On Thursday, Sony announced it was cutting the price of the PlayStation 4 by $50 to a new base price of about $350, bringing the cost of buying a PS4 down to the exact same level as Microsoft's Xbox One.
The move comes before the holiday shopping season approaches. But it coincides with a new report on 2014 console sales in Latin America from GearNuke highlights PS4's pricing problem. A year after Microsoft significantly dropped the price of Xbox One consoles, Sony is losing the battle for sales in the region's quickly growing markets.
It's a big problem for the future of Sony's side of the PS4 versus Xbox One battle, as the report found Latin America to now be the second-fastest growing region for gaming in the world, just behind Asia but faster-growing than the U.S. or Europe.
Latin America is currently the third largest market for consoles, just behind the U.S. and Europe, even though, as Bloomberg previously reported, it's also the region where buying a current-generation console is the most expensive.
That goes especially for the PlayStation 4, where local currency exchange rates and hefty import fees on consumer electronics has made the huge Brazilian market the most expensive country in which to buy Sony's console. In U.S. dollar equivalence, it costs about $1,700 to buy a PS4 in Brazil.
Meanwhile, Microsoft has had production facilities within Brazil since the Xbox 360, allowing Microsoft's consoles to duck those import taxes. The company dominated nearly 85 percent of sales in the last generation of consoles, and it looks to be similar for this current generation, since avoiding that tax has cut the locally manufactured Xbox One price to nearly half of the price of Sony's foreign-import PS4.
Microsoft's presence in Latin America goes beyond strategically avoiding import taxes, and it has been building its cultural footprint in huge gaming markets like Mexico for years. Since the Xbox 360's launch, Microsoft has led the Mexican gaming market over the PS3, with the country eventually becoming one of Microsoft's top five markets for its last-generation console.
With that strategic long term strategy to undercut Sony's prices, no wonder the report on 2014 Latin American console sales found that the Xbox One was the best selling next generation console in 2014, through official sales channels.
That year, it's estimated that about 600,000 Xbox One and PS4 consoles were sold, mostly in Mexico, Brazil and Argentina. And while the PS4 led sales in Argentina, due to a 12 months-late start for the Xbox One in the country, overall about 75 percent of next-gen consoles in Latin America were attributed to the Xbox One.
However, Sony still leads the overall world market, and Microsoft has a lot of ground to make up in the top developed markets where the PS4 still dominates, including Europe, the U.S., and Asia. As of this summer, Sony's PlayStation 4 has posted total units sold worldwide at about 25 million, which is nearly double that of the Xbox One. The console war continues, and Latin America may be the hottest new front.
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