Sony Won the Battle, but Microsoft Can Still Win the War

Sony is ripping a page out of the Apple playbook, attacking Microsoft to make a point.

It may not have hired Justin Long and John Hodgman to roll out "I'm a Mac" ads, but it's doing something even more sneaky by hitting Mr. Softy below the belt.

Sony has been the unexpected star of this week's E3 expo. It not only moved to price its upcoming PS4 for $100 less than Microsoft's Xbox One, but it's laying into Microsoft's requirements that gamers perform periodic online check-ins to validate game ownership. It's also making it easier for gamers to trade in used games.


"PlayStation 4 won't impose any new restrictions on used PS4 games," Sony Computer Entertainment of America head Jack Tretton said to thunderous gamer applause.

"When a gamer buys a PS4 disc, they have the rights to use that copy of the game," he continued. "They can trade in the game at retail, sell it to another person, lend it to a friend, or keep it forever."

More thunderous applause.

GameStop shares rallied -- sending the shares 8% higher on Tuesday -- before giving back nearly half of those gains on Wednesday. GameStop is the biggest beneficiary of a vibrant used-game market, and Sony's news was sweet.

At the moment, it seems as if Microsoft's Xbox One is toast. Sony just delivered what gamers want to hear. However, isn't Microsoft delivering what developers want to hear?

Requiring online connections will make it easier to sell games directly to players. The same Web-tethering requirement will make it easier to sell virtual items and additional levels. The ability for publishers to dictate whether or not they want their games to be resold will result in no lost revenue to secondhand transactions.

Gamers will want Sony to succeed this Christmas. Publishers and developers will want Microsoft to be the victor.

The normal inclination is to hand the crown for the next generation from Microsoft to Sony. Gamers are the ones who buy the systems, and they are cheering Sony on this week. However, we really haven't let publishers cast their votes.

What if publishers price Xbox One games at lower price points than PS4 titles? It can happen. In fact, it should happen. If Xbox One discs are less valuable to gamers because they lack trade-in value, then the perceived value will be lower. Why can't software companies pass on those savings to the gamers in a move that will shift the value proposition of the Xbox One console itself?

What if they decide to only put out Xbox One versions of some titles? Each platform has its exclusives, but what if publishers begin holding back on one platform to favor the one where the margins will be higher?

This week was a battle in a war that won't be decided until the holidays. Sony won the battle, but Microsoft has too big of a lead in the current console generation to assume that it will lose the war.

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The article Sony Won the Battle, but Microsoft Can Still Win the War originally appeared on Fool.com.

Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple, GameStop, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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