Console Wars
The PlayStation 4 has just been released, and amidst booming initial sales and hype, reviews
have been mixed. The PlayStation 4 has taken the first punch in what will surely develop into the new generation console wars. The PlayStation 4 hopes to ride its momentum in its hope to knock the Xbox One off of the market, but was Sony’s decision to release first the best option? Are there advantages to Microsoft waiting? Both of these questions can be analyzed from a networks perspective. By utilizing the concept of information cascades, we can take a more in depth look of how these two products compete and what it means for their future success and strategy.
As the author Erik Kain mentions, PS4 has not been getting the most favorable reviews both in terms of hardware–there are some hardware defects which people have been receiving–and its less than thrilling first-party launch titles. Kain also posits the question “But what happens if the Xbox One lands with generally more favorable reviews than the PlayStation 4? What happens if the Xbox One game lineup receives higher praise?” This type of question plays into the concept of information cascades. When people are trying to make decisions about what products to buy, they not only consult their own intuition, but also look to the internet and reviews as a source of information. Since the PS4 has been having technical difficulties and a lack of good software, people have been reviewing the PS4 negatively. This could be a potentially bad situation for Sony. When people have access to other people’s opinions on a product, then (as we learned) that information gets considered by those who read the reviews. Then based on a combination of their own opinion and the number of signals they get they will either purchase or abstain from purchasing the product. Since Sony has had a large number of initial customers, there is plenty of reviews and information available for the next wave of consumers. This information then will affect their decisions and may shift the balance of power to Microsoft.
Thus, PS4’s early release allows for more information to be collected by consumers before the launch of Xbox One. We will have to wait and see how this affects the sales of Xbox, but from a networks perspective, we can make the prediction that people might shift in long term towards Xbox due to the lackluster launch. Of course this is a simple prediction which does not take into account a lot of factors, but it is something that definitely might define how the console wars pan out.