Came across a piece from Tom’s Hardware speculating that the holiday deals we’re seeing on the XBox Series X are a result of lackluster sales? We’ll get to that, shortly.
One thing our youngest grandson wanted for Christmas was an Xbox Series S. He was specific, “an S!” because the S is better than the Xbox One. Since we whispered in Santa’s ear and the North Pole elves made that gift a reality, we’ve been seeing some pretty significant discounts on the Xbox Series X.
But have sales been down on the current iteration of Xbox? Apparently, at least in Europe, the data indicate yes:
According to recent data published by GI.biz (thanks, IGN), sales of both Xbox Series X and Xbox Series X have dropped a staggering 52% over the past year in Europe. Compare that to PS5’s year-on-year figures in the same region, and sales for Sony’s console are up an astonishing 143%. A
Microsoft discounting Xbox Series X following disastrous sales — is the console war already over? | Tom’s Guide (tomsguide.com)
The author of this piece suggests one reason for the decreased sales while the PS5 has improved is due to a lack of Xbox console exclusives.
My take on this is a bit different and it might surprise some readers: Game Pass. There has been an intense, arguably obsessive, focus on increasing Game Pass paid subscribers over the past six months. XBox CEO Phil Spencer gave us the tea leaves, see: Microsoft CEO of Gaming Hints Closing Game Pass if Subscriber Numbers Don’t Meet Expectations by 2027.
Microsoft, that normally has some amount of bad press because it’s Microsoft, has been enjoying a steady stream of negative press due to frequently nerfing their Microsoft Rewards, some of those rewards targeting Rewards points for achievements on the Xbox like +50 for a daily achievement to +5. Have been updating the bottom of this post on these reductions/changes (some of which are embarrassingly lame): Is Microsoft Intentionally Reducing Ways To Gain Points, While Increasing The Rewards Costs of Items Like Game Pass?
Recently (12/12/2023), I told another PGM member in discord the following about Microsoft Rewards:
It’s so obvious what Microsoft is doing, pushing paid Game Pass, they even tried to remove comping most of their 238,000 Game Pass subscriptions. They quickly reversed on that decision, no doubt becaue the ire there was simply too much to bear and too close to home.
My Game Pass subscription is paid through February 14, 2024 and I’m probably going to treat it like some of the movie/TV streaming services. Subscribe when there is something specific I want to play, then cancel for months, return, subscribe again. Don’t think I’ll continue to subscribe every month, in part as a response, but moreso because I have so many other games to play and there are some other game subscription services I’d like to try out. Microsoft is helping me move toward the door.
That said, when I do take time to play on Game Pass, there is a lot to like there. Not having (as many) exclusives isn’t a huge deal to me personally, but I can see that might matter to others. I don’t really consider myself a hardcore console gamer, and haven’t been one probably since the Xbox 360, PS3 and Wii. I don’t really consider the Switch a console, more like a portable gaming system, but I’ve played the Switch way more than the Xbox Series X or the PS5.
The PS5 just pissed me off with how freaking difficult it was to buy (they were readily available by scalpers, but no way buying one through them). We scored one in 2022 through Sony directly, but it had already been out for over a year, which just stole momentum and interest. And then last year Christmas bought one for our older grandson. He didn’t play his much until just a few months ago, and now he plays it regularly. I don’t play mine nearly enough as it is worth playing, there are some great games on there. It’s a really, really good experience. Maybe in 2024 I’ll give it more love.
Anyway, Xbox, Xbox, Xbox, what is going on with Xbox? I don’t think Microsoft has cared that much about their hardware since the pinnacle of their line: the Xbox 360. That system was hampered by the RROD (Red Rings of Death), but it really was special. They are like Google sometimes, but not as bad, when it comes to shutting down and/or changing services. IMO, Game Pass isn’t going anywhere any time soon, but that 2027 refocus, that’s only 4 years away, it’s probably in Microsoft’s crosshairs if they don’t make more money on it.
Read recently that Microsoft was spending over $1 billion a year on Game Pass. How much are they making in subscribers? That brings back to Spencer’s point: increase the paid subscribers … or else.
As mentioned in a previous article linked herein above, I don’t think they shut down Game Pass in 2027 if they release another version of Xbox. I don’t think Microsoft wants to go the route of Sega and be just a publisher, leaving Sony and Nintendo duking out the console hardware space, but you never know with Microsoft. They could also make a bet on something different like, well, mobile. Don’t ever, ever count out mobile gaming – it’s the 800 pound gorilla that some (many?) gamers deride, but mobile gaming is freaking massive – and very profitable.
In fact, I read that one of the main reasons Microsoft was interested in Activision/Blizzard was their mobile presence (Candy Crush!). Imagine that, if true, not Diablo, World of Warcraft, Call of Duty, etc, but a mobile game being their main motivation for the acquisition?
Having covered Microsoft for 20+ years, having been a paid contractor for them (Zune team), having done game testing with them in Redmond, WA many times for the Xbox and Xbox 360 (but not the One or currently for Series S/X), I’ve seen enough to know they are always working on something else.
They also have the money to do pretty much whatever they want, including getting out of the hardware console business. A more likely scenario is they will try to get into the TV like Roku is doing, as they had a development unit, but the price was higher than they wanted to release. I think Microsoft would rather Xbox be some kind of cloud streaming service vs. hardware they have to continue to do R&D and support and if it’s inside the TV you buy, well, that makes it just all the more likely to be in your home for a longer time.
After the acquisition of Activision/Blizzard, Microsoft is now the third biggest games company in the world. Tencent is #2 and Sony is #1. What are your thoughts, friendly reader, on the future of Xbox? Will Microsoft make at least one more? Can/should we believe their hardware sales are down?
UPDATE 12/21/2023 @ 11:25pm PST: The following article claims the PS5 outsold the Xbox Series S/X 3 to 1 during Black Friday and the PS5 is on track to sell more units than the PS4.
Meanwhile, Lempel told the Financial Times the PS5 is now on-track to outsell PS4, which has sold 117 million units since going on sale in 2013. “I think we have the ability to get there,” Lempel said. “Demand for the [PS5] going into this year was huge… Momentum is strong now and it’s continuing.” The PS5 hit 50 million sold on December 9, 161 weeks after it launched in November 2020. The PS4 reached 50 million sold 160 weeks after launch.
PS5 Has Outsold Xbox Series X and S 3-to-1 in 2023, New Data Reveals – IGN