Sony's Gaming Division Is Off to a Great Start in 2017

By John Ballard Markets Fool.com

Sony's(NYSE: SNE)gaming division has hit the ground running in the first three months of 2017. Since January, Sony's PS4 gaming console has had a steady stream of quality game releases, which has to make PS4 owners very happy.

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As of April 17, 37 games released for Sony's PlayStation 4 (PS4) console this year had a Metacritic score of 75 or better. This more than doubles Microsoft (NASDAQ: MSFT) Xbox One's 18 games with the same scores.

Sony is winning the current console war against Microsoft. IMAGE SOURCE: PIXABAY.

Since the 2013 launch of both consoles, Sony's PS4 has an even bigger lead with 367 games receiving a Metacritic score of at least 75 compared to only 230 for Microsoft's Xbox One.

Sony's superior game catalogue is an important advantage

Given the greater breadth of quality games available on PS4 relative to Xbox One, it's not surprising that estimates indicate Sony has outsold Microsoft in console unit sales two-to-one in the current console cycle.

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A better game catalogue could prove an extremely important advantage for Sony later in the year when Microsoft launches what some are calling a true next-generation gaming machine. The console code-named "Scorpio" will feature more graphics capability over Xbox One in order to play games in 4K resolution at a smooth frame rate of 60 frames per second. It will be the most powerful console ever made, bringing high-end PC gaming to console gamers.

In fall 2016, Sony launched its own console upgrade with the PS4 Pro, which provided more power to run games on 4K displays.But given Scorpio's 2017 launch date, Microsoft will be packing the new console with the latest technology, which will provide significantly more graphics power to gamers than the PS4 Pro.

On top of the added computing horsepower, Scorpio will also feature a 4K Blu-ray player, making it the first true 4K console.

The console war is about games

However, history has shown that the best technology doesn't always win. There have been consoles with great technology under the hood that have failed to gain traction on the market mainly because of a lack of great games available for them.

For example, the original Xbox in 2001 was technologically superior to Sony's PS2. Xbox featured a faster processor and was also the first console featuring broadband internet connectivity, whereas the PS2 used a dial-up connection.

But Microsoft failed to win that console war because of an inferior game catalogue.

Why does Sony keep winning?

There seems to be something different between the two companies' approaches that allows Sony to keep pumping out about twice as many quality games as Microsoft cycle after cycle.

First, Sony has been more focused on supporting independent developers. The company has a very consistent track record of delivering a wide breadth of high-quality titles mixed with independently developed games that also receive high praise from critics.

A second reason is Sony's expertise in consumer electronics. Sony is purely interested in delivering a great device to play games and it has outsold Microsoft in every console war.

On the other side of the console war, Microsoft seems to be more focused on marketing Xbox as another media device for your living room, especially a device to keep people connected to the Windows ecosystem.

E3 2017 is an opportunity, but will Microsoft capitalize?

Since the Xbox One was announced at E3 2013 (the Electronic Entertainment Expo), Microsoft has had to play defense. The Xbox One was $100 more expensive than PS4 at launch, and Microsoft made a huge PR blunder by initially announcing that used games would be blocked on its new console. Both announcements earned a cold shoulder from gamers who like buying used games to save money.

Yet again, at E3 2016, Sony upstaged Microsoft by remembering who its customers are -- gamers. While Microsoft sent executives out on the stage to talk to the audience about the business side of gaming, Sony focused on showing trailers and footage of game after game after game.

The annual E3 event in Los Angeles is the Woodstock of the video game industry. Video game enthusiasts attend E3 every June to see new games, and that's what Sony delivers. As a result, Sony gets high praise from the gamer community, while Microsoft receives criticism.

With a flashy new console arriving by the 2017 holiday season, Microsoft could dominate E3 2017 when it unveils Scorpio. To do so, Microsoft should leave the industry side of things to reporters and show gamers endless footage of games running on the new Scorpio machine.

Sony is winning because it has a better selection of games; it's that simple. Microsoft will not beat Sony with better graphics power. Technology is a commodity. At some point, Sony will unleash the PS5, which will likely have better graphics capability than Xbox Scorpio. Unless Microsoft closes the gap with Sony's lead in game development, Sony will continue to lead the console war.

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Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. John Ballard has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.