Xbox One Or Playstation 4? Brand Loyalty Won't Save Microsoft's New Xbox


Gaming is set for a titanic showdown in the next couple of months, between console giants Xbox One and PlayStation 4. With billions of dollars at stake, each company has a lot to lose. And with each system sharing very similar specs, the effect of brand loyalty on system choice will be a huge question going into this holiday season.

While brand loyalty will play a part in the success of each console, the same as with any product launch, gamers have been known to be fickle between console cycles. Atari customers flocked to Nintendo's NES, Nintendo customers flocked to the Sega, whose customers flocked to the PlayStation and PlayStation 2, and in turn to the Xbox 360. So, while the Xbox had the advantage in loyal customers in the last generation, that success is no guarantee of continued loyalty.

First, how could brand loyalty help a console release, and how does Xbox have an advantage over PlayStation in that category?

People like continuity. Many less-than-good romantic relationships last far longer than they should, simply because having to break up with someone and getting to know someone else completely from scratch, building up new memories and preferences, is a lot of work.

That is the same reason Netflix customized movie ratings so that people wouldn't feel bad switching to Blockbuster, and why Amazon has recommendations so that people won't feel like they're in unfamiliar territory when shopping on other sites. And it is the same reason Xbox has spent the better part of a decade cultivating the mostly meaningless number known as the Gamerscore (which my spell-check informs me is, sadly, a real word now). If a gamer switches to Sony's PlayStation 4, they lose the record of all of the achievements they have had on the Xbox 360 over the past seven or eight years of their lives.

In marketing, it is called switching costs. And it isn't just Gamerscore; Microsoft is desperately trying to increase those switching costs on a corporate scale. They are going through a major reorganization called One Microsoft in order to align all of their products; the Windows Phone, Windows 8, Xbox, and Surface all have the same aesthetic, all have the capability to be tied to your Xbox profile and Gamerscore, and all have things called Xbox Music and Xbox Video. Why? So that people will, consciously or subconsciously, be more hesitant to switch to PlayStation and lose all of that connectivity. To increase their switching costs.

But, will it work?

Not so far. Like I said, gamers can be a fickle crowd. They often adapt, depending on which product better caters to them. And, if poll numbers and pre-sales are any indication (they are), Xbox is in deep trouble despite their efforts.

Of all respondents in the last week – almost 10,000 – on the running poll Xbox One vs. PS4, less than 35% favored the Xbox One over the new Playstation. More statistically sound, ConsumerMetrix found that less than 20% of the prized aged 20-35 demographic across the U.S. and Europe were planning on buying an Xbox One this June, compared to the 30% of the same respondents planning on buying a PS4. Pre-sale figures aren't vindicating the Xbox One yet, either.

See, switching costs don't exist in a vacuum. Inside the mind of each consumer, they are compared to a lot of other factors, including the costs of not switching. For Xbox gamers, the costs of switching include: losing a Gamerscore, the emotional cost of betraying that part of their identity that says they're an Xbox fan (higher for some than others), and the cost of losing integration with Windows, the music and video services, and Smartglass. The costs of not switching, on the other hand, include: the very real cost of a hundred more dollars, the uncertainty of not knowing whether Microsoft will try to screw them over again, the privacy concerns over Kinect, and the slightly more open nature of PlayStation's policies. For most gamers, those latter costs apparently carry much more weight.

Call me a fanboy sucker for brand loyalty, but I will probably still buy the Xbox One in the same way I owned a Zune and defend Windows 8. For most of the rest of us, loyalty simply won't be enough.