Xbox One vs. PS4: Who’s Really Over-Delivering Value?

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In an interview on Bloomberg TV last week, Microsoft President of Interactive Entertainment, Don Mattrick, said that the Xbox One was over-delivering on value. In fact, the Xbox boss went so far as to say, “We’re delivering thousands of dollars of value to people.”

The problem is that no one apart from Mattrick, Microsoft employees and the staunchest of Xbox loyalists believe this to be the case. When you look at the dollars and cents of the next generation of consoles, it’s pretty obvious that the Xbox isn’t actually over-delivering and definitely not thousands of dollars worth of over-delivery.

First, let’s look at Mattrick’s claim of thousands of dollars of value delivered by the Xbox One. To do so, I designed a PC to match the specs of the Xbone. Since the AMD Jaguar processor isn’t available yet, I’ve done my best to approximate the performance of the Xbox One.

When I put together the necessary parts to make the system actually functional, I come out to an approximate price of $465. When you tack on $60 for the controller and $100 for the Kinect, the value of a computer built to Xbox One specs is actually closer to $625 before you tack on $90 for Windows 8. I left that off the estimate since the XB1’s games aren’t running on Windows 8 so I felt it wouldn’t make for an accurate comparison.

xbox-one-motherboard-wiredSo the Xbox One over-delivers on value compared to a PC but what actually constitutes thousands of dollars of value when it comes to a PC. If I wanted a PC with thousands of dollars of value, I can build an AMD-based system for $2,100 with all the necessary parts, including operating system. For me, thousands of dollars of value includes AMD’s top of the line FX-8350 CPU and Radeon HD 7990 GPU, 32 GB of RAM, a 2 TB of hard drive, a Blu-Ray burner and a functional operating system in Windows 7. On paper, this system blows the Xbox One out of the water and truly represents thousands of dollars of value. Unless Mattrick meant more than $2,000 of value in which case I’ll have to go back to the drawing board.

On a straight-up comparative basis, the PlayStation Four has a better value than the Xbox One. Even if you through in the PlayStation Eye motion controller, the price of the PS4 goes up to $459 against the XB1’s $499. That doesn’t include the value of the PlayStation 4 having, on paper, 50% greater graphics processing power than the Xbox One.

The comparison between the PS4 and the PC just doesn’t work at the moment because using DDR5 as RAM hasn’t been done on PC yet. The only thing that the PC Gaming Master Race has DDR5 memory for is as part of GPUs. A quick proxy of two GTX 680s to get you to 8 GB of DDR5 memory would run you close to $1,000. That would be over-delivering on value far more than the XB1.

But let’s look at the comparative values of the next-generation consoles but looking at the cost of running these the next-gen consoles over an estimated seven-year console life cycle.

We know that the Xbox One will be $499 for the console, a Kinect and one controller. If you throw in a second controller, that will be another $60 based on an Amazon placeholder price. If Xbox Live Gold’s price stays the same, it will be $60 per year which comes to $420 in our example. Before games and discounts, that brings the seven-year operating cost of an Xbox One to about $979.

playstation-4-console-and-controllerSony has announced that the PlayStation Four will be $399 for the console and one controller with extra controllers costing $60. PlayStation Plus currently costs $50 per year so let’s assume that the price will carryover to the PS4 just like your accounts and call it $350 for seven years. Since the PS Move has hardly been mentioned by Sony when talking about the PS4, let’s omit that from this example. That makes the seven-year cost of a PlayStation 4 around $809.

Just for fun, let’s throw Nintendo’ Wii U into the mix to see how it stacks up to the competition in terms of cost. The Wii U Deluxe model costs $349. The controller price comparison is a little odd because you can’t buy a Wii U Gamepad separately from the console yet. Nintendo has said that the replacement price for the Gamepad is $140. However, I’m going to use the Wii Remote and Nunchuk prices totalling $60. And that’s the  sum of the Wii U’s cost. There’s no online gaming costs so seven years on the Wii U will run you around $409. If you’d rather compare with two Gamepads instead of the Remote, it’s $489.

So what does a head-to-head-to-head comparison tell us? It tells us that just because a console is cheap doesn’t mean that people will buy it. If straight dollars spent is what drives buying decisions, the Wii U would have won this console generation based on the fact that the Wii U would only cost you half as much as a PS4 over a seven-year console life cycle.

wii-u-gamepad-vs-ps-vitaBetween comparing the costs of the systems and the value of their hardware, we haven’t valued some of the other features and apps that are part of the system. That’s because they don’t really have a hard dollar value associated with them. For example, how much is streaming a game to the Wii U’s Gamepad or PS Vita worth compared to each other and the Xbox One’s ability to only play on the TV? What about the value of the free games and discounts on PlayStation Plus? Does the Kinect increase the value of the system or decrease it?

Really, at the end of the day, a games console’s value should come down to the value of the games. That’s where I think that the PlayStation 4 trumps the other two consoles in terms of value. If you get PlayStation Plus, and most people are likely to get it because you need it to play online multiplayer, the Instant Game Collection provides a value that neither Microsoft or Nintendo currently match. Sure, PS Plus and the Instant Game Collection won’t be good straight away is you don’t have a PlayStation 3 but it should pay off as the console’s life cycle goes on. If Microsoft’s Xbox Live Gold game giveaways carry beyond the launch of the Xbox One, that will certainly give Gold and their consoles more value.

So it would seem that both the Xbox One and PlayStation 4 over-deliver on value when compared to similarly powered PCs. When you’re looking for the most bang for your gaming buck, right now, the best value comes from the PlayStation 4 if you don’t include the Nintendo Wii U. Still, we’ve seen Microsoft make a snap change to DRM to get back into the battle for this console generation. Who knows what the next move for any of the three manufacturers is. I think the relative value of each console is only going up from here.

Sources:
Anand Tech – The Xbox One: Hardware Analysis & Comparison to PlayStation 4
Digital Foundry – Spec Analysis: Xbox One
GameSpot – Microsoft defends Xbox One $500 price point
Prices via Amazon and Gamestop

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