If you ask older gamers, the golden era of the Xbox was between 2005 and around 2013. The Xbox 360 console, which had capitalized on the “upstart” success of the original Xbox, coupled with Sony fumbling the launch of the PlayStation 3, gave Microsoft a chance to position its gaming arm as the top dog of the gaming industry for several years. But, according to Phil Spencer, Xbox is posting much higher revenue these days than ever.
The iconic head of Xbox told press at a private presentation that the gaming revenue for Xbox is now double of what it was during the Xbox 360 era. Given the hefty impact of the 360 on the gaming industry, it’s a testament to the success of the brand’s current strategy, which includes the Xbox Series S and X as well as the Game Pass. Moreover, the company is poised to hit a staggering $1 billion in PC gaming revenue this year, which further demonstrates that the company’s strategic shift is working.
This statement isn’t without its critics. Some argue that while the revenue figure is impressive, they don’t necessarily signify a profitable scenario. They cite the rise of microtransactions and the introduction of the Game Pass subscription service as revenue boosters that don’t necessarily correlate with higher profits. Despite these arguments, Spencer maintains that Xbox is ahead in the game, with the number of Xbox players greater than ever.
At a behind-closed-doors presentation to press, Xbox boss Phil Spencer says gaming revenue for the company is double what it was in the 360 era, says Xbox has more players than ever, expecting more than $1 billion in PC gaming revenue this year
(All meant to show Xbox strength)
— Stephen Totilo (@stephentotilo) June 11, 2023
A significant part of this success can be attributed to the expansive approach Microsoft has adopted in recent years. Xbox’s decision to embrace the PC platform has been a game-changer, with Xbox expecting a revenue of over $1 billion from PC gaming alone in 2023. This commitment to PC gaming also bodes well for the future, as the PC platform accounts for approximately 6-7% of total annual revenue.
Adding fuel to this fire, Microsoft’s Game Pass service raked in an impressive $2.9 billion in 2021. The collaboration with Steam, which saw the migration of Bethesda-owned games from the defunct Bethesda.net Store, also positively influenced the current state of affairs.
Spencer’s optimism isn’t confined to past successes. He asserts that the gaming business is continually evolving, which is a sentiment echoed by Matt Booty, the head of Xbox Game Studios. Booty insists that the company has “turned the corner” and that Microsoft’s output was entering a new era, with a goal of releasing “four games a year.”
In the coming year, anticipated games such as Forza Motorsport and Starfield are expected to further the Xbox momentum. With the latter being available on Game Pass on day one, the subscription growth is likely to gain further traction. Spencer also revealed that Microsoft’s attempted $68.7bn Activision Blizzard buyout is moving forward, reflecting Xbox’s dedication to bolster its arsenal of gaming studios and franchises.
Despite the hiccups along the way, Spencer remains confident in the growth and prosperity of the Xbox brand. The Xbox Series X and Series S consoles are performing far better than their predecessors, and Xbox’s revenue is at an all-time high. As Spencer proudly states, Xbox’s future is brighter than ever before.
With upcoming hits led by Fable, Starfield, and Avowed, the days of Xbox playing second fiddle to PlayStation might come to an end sooner than expected.
