A little over two years into its lifecycle, audiences are already losing interest in the Xbox Series S and X.
According to the tech giant, console hardware sales are down by 30% from the same period last year. To make matters a lot worse, the Game Pass didn’t seem to have made a difference. But, you won’t see Microsoft worrying about this. Despite the drop in console sales, total revenue and net income for the entire company were up year-over-year by 7% and 9%, respectively.
Still, it’s not a good sign for the Xbox arm of Microsoft to lose money, especially if the Xbox content and services revenue, including the Game Pass, only went up by 3%.
Competition in the gaming industry is as fierce as ever, with both the Nintendo Switch and the PlayStation 5 topping sales charts and setting new records in spite of the supply chain disruptions caused by the COVID-19 pandemic.
Of course, Microsoft has since pivoted from the console arms race. The tech giant isn’t focused on outselling Nintendo or Sony anymore. Instead, it plans on doubling down on the mobile market and cloud gaming, which its ongoing acquisition of Activision Blizzard for $70 billion will help with. If successful, Microsoft will gain access to a massive library of popular titles for the Game Pass. The purchase is currently undergoing review from regulators in the UK, EU, and FTC, but the CMA is expected to greenlight the buyout later this week albeit with concessions.
It isn’t clear just how few Xbox Series S/X units Microsoft sold this quarter and in previous quarters. Unlike Nintendo and Sony, Microsoft doesn’t announce console sales figures as part of its quarterly results.
In any case, you can’t blame fans for believing the earlier reports that Microsoft is thinking about selling the Xbox division because of its low sales figures.
Then again, the best has yet to come for Microsoft. After a relatively quiet period of close to zero exclusives coming out on the Xbox Series S/X, Microsoft will welcome a handful later this year, starting with Arkane Studios’ Redfall on May 2, after which is Bethesda Game Studio’s Starfield on September 6. Not to mention, Activision Blizzard will be a part of Microsoft whether Sony likes it or not. The infusion of games will have a massive impact on the Game Pass, cannibalized game sales be damned.
We’re curious to find out if Microsoft will try to address the declining interest in the Xbox Series S/X or if it has accepted that it can never compete with Sony and Nintendo.
