So which system showed the most improvement in its second year on store shelves? That depends on how you look at it. On a relative basis, Microsoft seemed to have the better year, with annual sales increasing over 25 percent compared to just a 17 percent increase for the PS4 (Fig. 5). But the PS4 was starting at a much higher base of 13.5 million sales in its first 11 months compared to about 7.2 million sales for the Xbox One in the same period.
The result (Fig. 6) is that the PlayStation 4 actually outsold the Xbox One by a slightly larger margin in its second year (6.8 million more console shipments than Xbox One) than it did in its first (6.33 million more console shipments than Xbox One). In other words, while the Xbox One is increasing its sales at a faster rate than the PS4, Microsoft still lost more ground to Sony this year than last on an absolute basis.
Of course, if current annual sales rate increases continue, the Xbox One would eventually overtake the PS4 in the annual sales race. However, that process would take quite a while. Fig. 7 above shows just how long, projecting out how annual sales would look if the PS4 continued to increase annual sales by about 17 percent a year and the Xbox One continued to improve at about 25.5 percent annually.
It's important to note that console sales patterns decidedly do not work in this way, and it's a bit ridiculous to expect annual sales to continue increasing in this kind of parabolic curve. Still, it's interesting to see that based on current trends, the Xbox One wouldn't start to outsell the PS4 on an annual basis until 2024. At that point, Sony would have continued building up a significant life-to-date lead of over 50 million consoles worldwide before Microsoft would be able to stop the bleeding (Fig. 8).
The takeaway from this hypothetical is clear: Xbox One sales need to improve at a faster rate (or PS4 sales need to start slowing down significantly) if Microsoft wants to have any hope of pulling even with Sony's sales in this console generation. Xbox Division Chief Phil Spencer might say that Microsoft isn't that concerned with the Xbox One's relative market share, but for anyone who is, the road ahead continues to look difficult.
