Sony Corp. unveiled the PlayStation 4, its first new console in seven years, taking the battle to Microsoft Corp. with a lower-priced machine, original content and fresh titles as it targets a return to video-game dominance.
The PS4 will cost $399, 20 percent less than Microsoft’s Xbox One, Sony executives said Monday at the Electronic Entertainment Expo in Los Angeles. The machine, with sharp edges and blue highlights, allows unlimited used-game sales and doesn’t require an Internet connection, a contrast to two unpopular Microsoft features.
The console is crucial to Chief Executive Officer Kazuo Hirai’s plan to turn around Tokyo-based Sony’s electronics business. A successful PS4 would bolster Hirai’s financial resources as he focuses on making television manufacturing profitable after nine years of losses. Sony won the first round, according to Damian Thong, an analyst at Macquarie Securities Ltd. in Tokyo.
“We now think Sony and its PS4 have the edge over Microsoft’s Xbox One,” Thong wrote in a report Tuesday. “The PS4 offers gamers a more powerful machine at $100 cheaper than the Xbox One.”
To expand sales, Sony and Microsoft are looking to broaden their audiences beyond gamers by adding music, films and TV shows, with some of that content exclusive. The challenge for both companies is to capture mainstream consumers, who would otherwise play on smartphones or tablets, without alienating serious gamers.
Sony will bring original programming to the PlayStation Network and PlayStation 4, Sony’s U.S. CEO, Michael Lynton, said from the stage at E3. The device will feature movie services like Time Warner Inc.’s Flixster and Redbox Instant from Verizon Communications Inc. and Coinstar Inc. Sony also said it would tailor programming to gamers as the company squares off against Microsoft to re-establish hardware dominance.
The PS4 will go on sale in the U.S. and Europe before the year-end holidays, Sony said.
Sony has 30 titles in development, with 20 slated for sale the first year. The company demonstrated titles including The Order: 1886 from developer Ready at Dawn, Sony’s own Infamous: Second Son and Activision Blizzard Inc.’s Destiny.
U.S. retail spending on video games, including used games and rentals, fell 9 percent to $1.37 billion in the first quarter from a year earlier, according to industry researcher NPD Group. Digitally delivered content rose 8 percent to $1.59 billion.
Microsoft, which has led console sales in the past couple of years with the Xbox 360, on Monday introduced the $499 Xbox One, which goes on sale in November. Nintendo Co. debuted its Wii U console in November starting at about $300.
Microsoft is positioning its new console as the center of living-room entertainment. Exclusives, TV shows and features like Skype video calling, along with accessories such as the Kinect controller and SmartGlass mobile second-screen application, justify a premium price, said Don Mattrick, president of Microsoft’s interactive entertainment business.
“We’re overdelivering value against other choices,” Mattrick said. “Any modern product these days, when you look at it, $499 isn’t a ridiculous price point.”
Subsidies could become an important factor in competition between the Xbox and PS4, Michael Pachter, an analyst with Los Angeles-based Wedbush Securities, said in a Twitter posting. Internet service providers are expected to subsidize the Xbox, lowering the sticker price for consumers, he said.