Connect with top gaming leaders in Los Angeles at GamesBeat Summit 2023 this May 22-23. Register here.
PlayStation 4 is a dominant sales force, but that doesn’t mean that Microsoft’s console is withering and dying.
For every $1 that the average PlayStation 4 owner spent on Ubisoft games in the French publisher’s fiscal third quarter, the average Xbox One gamer spent $1.25 on the same products. This means Ubisoft is seeing a much higher average revenue per player (ARPU) on Microsoft’s console — and this suggests that the Xbox One could have a higher software attach rate (which measures how many pieces of software sold versus the number of consoles sold) than the PlayStation 4. Xbox One will likely never catch up to the PlayStation 4 in terms of market share, but Microsoft can use figures like attach rate and ARPU to help reassure third parties — at least those that make blockbuster games — that the Xbox One is a viable platform. In a console space worth tens of billions of dollars, having a second-place system with an audience that spends a lot of money makes for a healthy software ecosystem. This is especially true considering Xbox One gamers widened that ARPU gap for Ubisoft games when compared to the average for the company’s first nine months of fiscal 2016.
We’ve ask Ubisoft for a comment about this. We’ve also asked Microsoft and Sony for more information about how they plan to keep their gamers spending. We’ll update the story once we get fresh input from any of the company’s involved.
That $1-vs.-$1.25 figure comes from Ubisoft’s financial report that it released earlier this morning. In that earnings statement, the publisher revealed that it made 41 percent of its third quarter sales from PlayStation 4 compared to 27 percent from the Xbox One. PC (12 percent), Wii (6 percent), Xbox 360 (4 percent) made up the bulk of the rest of the sales with Wii U, PlayStation 3, and “other” (mostly mobile) picking up 10 percent combined.
GamesBeat Summit 2023
Join the GamesBeat community in Los Angeles this May 22-23. You’ll hear from the brightest minds within the gaming industry to share their updates on the latest developments.
When we look at just the Xbox One and PlayStation 4, however, we see that Sony’s hardware made 51.8 percent more in sales for Ubisoft than the Xbox One. That’s a big margin — but it isn’t as large as the worldwide hardware gap. Earlier this month, publisher Electronic Arts let it slip that it is selling software on 55 million total Xbox Ones and PlayStation 4s. We know that Sony has sold 36 million PS4s, which leaves 19 million for the Xbox One. That means we have a global market with 89 percent more PS4s than Xbox Ones. If Sony players spent as much as Microsoft’s consumers, we’d expect to see a revenue gap for Ubisoft between the two systems that was closer to 89 percent.
Instead, we can clearly see that Xbox One has the higher ARPU.
This makes sense from the standpoint that the PS4 is more popular overall, which means more frugal gamers have picked up the Sony system since that’s the one most people are going with when they can only afford a single system. But these are also the consumers who spend less, and that will — in turn — drag down the PS4’s attach rate.
But this is still something positive for Xbox One and Microsoft because it is growing its ARPU lead over Sony. When you look at Ubisoft’s results through the first nine months of its fiscal 2016, we see that it made 37 percent of its sales from PS4 and 23 percent of its sales from Xbox One. If we assume that market-share gap through this entire time was the 89 percent (in favor of PS4) that it is today, then Xbox One gamers spent around $1.18 for every $1 a PS4 gamer spent through that those first 9 months. Seeing a jump to $1.25 from the year-to-date average of $1.18 — especially on third-party games — is a flashing sign to all publishers that Xbox One is a place to make money.
GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.