Microsoft and Sony are giving consumers something new to play with: two consoles, dubbed the Xbox One and Playstation 4, which are due this fall. The industry was worth nearly $80 billion last year, according to research firm DFC Intelligence. Both devices are sleek black boxes with similar technical specifications — they’re essentially super-PCs. But the companies have chosen different tactics to launch the devices. Here’s a closer look.
Microsoft is coming off a winning streak, having consistently outsold Sony in the U.S. The Xbox One can connect to a cable box, piping in live television and running apps alongside shows. For instance, viewers can watch a basketball game while browsing their fantasy team or Skyping with a friend. Users can switch between TV and games on the fly. Gamers were upset by some of the company’s draconian privacy and copyright policies. Microsoft says the issue will be resolved by launch.
Sony is trying not to repeat past blunders. The Playstation 3 came out a year later than its rival and cost hundreds more. “We’re in a much better position now,” says Jack Tretton, president and CEO of Sony Computer Entertainment America. At $399, the PS4 will cost $100 less than Microsoft’s console. Sony is concentrating on hardcore gamers, having courted developers to create titles for the platform. The firm also announced a liberal set of policies allowing players to sell games or trade with one another.
This story is from the August 12, 2013 issue of Fortune.