Microsoft has released its latest earnings report, and included in the document is an update on how the Xbox division is doing. Overall, Xbox revenue is way up thanks to contributions from Activision Blizzard, but hardware sales are down massively. And that’s not exclusive to Xbox, either, as PlayStation recently missed sales targets and Switch sales are trending down.
Microsoft said in its quarterly filing that Xbox hardware revenue decreased 31%, due to “lower volume of consoles sold.” According to GI.biz, this past quarter was the worst ever since the Xbox Series X|S launched in November 2020 in terms of a quarterly percent decline.
Again, this downturn is not specific to Xbox. Circana, formerly known as NPD, reported recently that all three platforms–Xbox Series X|S, PS5, and Switch–are experiencing year-over-year declines in the US. All three platforms were down at a minimum of 19% year-over-year based on the latest publicly available data.
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People buy less luxury goods when they cannot afford them anymore
And also when the competition is offering an arguably better product.
The PS5 hardware isn’t necessarily better.
But Sony has put out banger game after banger game.
What does Microsoft have? Underwhelming game after underwhelming game. So it makes sense they’d have fewer console sales, because why would you buy an Xbox console at this point?
The crazy part too is how they bought up all these studios over the past couple years, and most of them still have yet to actually bring a product to market under Xbox.
Of all the Zenimax studios Microsoft acquired in 2020 (Bethesda, id, Arkane, MachineGames, Tango Gameworks, Zenimax Online), the list of Xbox titles they’ve published is:
- Redfall
- Hi-Fi Rush (which went multiplatform a few weeks ago)
- Starfield
In this time, Arkane also developed Deathloop as a PlayStation exclusive title.
I get that games take a long time to develop, but I feel like “Microsoft money” has not been a reliable indicator for either the quality or volume of their published games so far.
Thing is, Sony aren’t even putting out that many bangers. Certainly not by the standards of last generation.
But that’s the problem. Last generation was pivotal for the switch from physical media to digital, which means that anyone buying a new system is going to buy an updated version of their last gen system. Which was a PS4, because Microsoft completely fucked it last generation. Even with this gen’s disappointing games, baffling lack of focus, poor messaging, and bizarre management decisions, they’d probably be in a much stronger position if they’d made a product that people actually wanted to buy last generation, because more folks would already be invested in the ecosystem.
Of course year-on-year console sales have dropped.
Series/PS5 are mid gen:
- most people who want a console already have one
- new enhanced SKUs are expected soon, anyone on the fence will be waiting
Switch is late gen:
- a replacement console is expected next year, anyone who can wait will be waiting
I would expect most current console sales to be replacing failed units.
