Xbox Predicts 'Hardware Decline' Despite Huge Revenue Boost From ActiBlizz

I would agree with the hardware decline as they don’t advertise nothing.
The thing is half of game pass subscriptions are on Xbox hardware so that won’t help be game pass subscription numbers up.

I’m even more convinced at some point Xbox will leave the hardware market.

Hardware decline - yes, same with Playstation. A sign of the times. But an increase in Game Pass subscriptions because it's 2024.

It seems natural for year over year to flatten and eventually drop a bit as we are into the 2nd half of the generation.

My prediction for future xbox consoles is shorter lifespans. They will get off the playstation gen cycle in 2026 and it won't really be "generations" for xbox anymore. Maybe a new updated console every 4 years or so.

"European sales" data didn't include all countries. The same source, The Verge, wrote the following: "PS5 and/or Xbox sales may have just peaked." In any case, it's a weird generation, with both Microsoft and Sony changing their strategies. Microsoft focusing on Game Pass and expanding the Xbox platform beyond consoles and Sony focusing more on PC and online games for the first time. Switch has been more successful than anyone could have predicted, considering it's last-gen and already dated back then. Back to Microsoft, it's obvious that their strategy is expanding Xbox Game Studios so they can feed Game Pass efficiently in the long term, not just on consoles but on the other gaming platforms. Consoles are part of Xbox, as Surface devices are part of their global business strategy. Consoles sales are not as important as they used to be, but still are profitable because of the successful services and software.

I can't remember the last time I saw and advert anywhere for Xbox.

@Romans12 nope, Playstation sales are up year on year

@themightyant yeah its a bit silly trying to blame a weaker than expected console market when the PS5 and Switch are both hugely successful and sadly Xbox just aren't at the races for several reasons

@BacklogBrad thing is we really aren't that far into this generation as most of it so far has been cross gen. Its only the last 6 months or so that have seen either side leave last gen behind and even then, many 3rd party games haven't yet. At this point sales should be going up, so for this to be happening is very bad news

I thought Microsoft might use ABK games on Gamepass to drive console sales, but nearly 4 months after the acquisition there’s still no sign of anything happening there. Meanwhile PS5s are selling like hotcakes, so it’s not like console sales overall are in decline.

The excuse of a weaker than expected console market is bad comedy. The only console that is weakening is the Xbox and let’s be honest, had it not been that the console was made by Microsoft with all their billions and now trillions, it would have been defunct years ago. Whether people like it or not, the Xbox business will soon be ‘Microsoft Gamepass’ and it won’t matter if Sony is the dominant console manufacture, Microsoft have the games behind them now that they will be the 3rd party powerhouse with the option of having all games on their books available to everyone. They wouldn’t be wasting billions on console R&D and if they were to do thinks right, the quality of games would be higher than they are now. Opening Gamepass up to rival consoles is where Microsoft’s business would explode. Although Gamepass would be entirely different than it is now, focusing on ‘just’ what Microsoft owns, and that is a huge amount, they would be able to follow on Phil Spencer’s promise of delivering more games to gamers, because if they stay as is, I can’t see another generation making too much difference as far as the sales are concerned. As long as COD, Fortnite, FIFA and Grand Theft Auto are available on PlayStation, the sales margins won’t change. If Gamepass was available on PlayStation, I wouldn’t be even slightly concerned about having an Xbox console at all and it wouldn’t matter about 10 year deals. I wouldn’t buy a different console just for Gamepass, but I wouldn’t hesitate subbing to Gamepass for Microsoft’s games on PlayStation. I don’t really like COD, but if I could play Forza on PlayStation I would be super pleased! This is just my opinion though, no need for other who feel different to flame me! 🙏🏻

Microsoft just doesn't market the xbox at all in the UK, I'm sure it's the same elsewhere. There are PS adverts on the purexbox website! This website is plastered with PS5 suicide squad ads.

Every major new game, releasing on PS5 and xbox, is advertised on bus stops up and down the UK in a blue PS advertisement. I doubt most members of the public even know that Xbox exists. Pathetic from MS... what do they expect, they just don't seem to care about marketing or selling consoles at all.

@themightyant it could be as simple as it is on PC... minimum specs Series X(v1) recommended specs Series X (v2) etc. They could implement a compatibility system to their storefront even if it was as simplistic as steam deck's uncompatible/playable/verified.

@carlos82 I disagree that it is very bad news. The gaming revenue is still growing at a healthy rate(even before the abk numbers were added). It is only bad news if you are in the singular mindset that console sales are the sole metric of success.

This generation console wise is absolutely no different to last generation.
Approximately
PS4 / PS5 110 million
Xbox one / series 50 million

That is because that’s is roughly the fan base for each console and the way things are and seem to run.
And if there are consoles next generation it will be exactly the same and no different.

Both companies have their regular buyers and fans and casual and new buyers that are about those figures I put above and that is that.

Nothing will change the above unless something crazy and wild happens.

@CharlieChooChoo
Totally agree with you.

Well, they’re right about hardware sales. I sold my consoles (PS5 and XSX) and game exclusively on my Steam Deck due to life circumstances (2 jobs and a family). I subbed to Game Pass as I’ve been using the Xcloud option and I don’t see myself buying a console again. It works really well, too. Just finished As Dusk Falls yesterday and I was blown away by it.

@Dimey
I never see ads on this or any website.
I use Brave Internet Browser on my tablet, phone and computer.

@BacklogBrad One of the biggest selling points of consoles is their simplicity to use over PC. Overcomplicating things with more frequent releases with different versions and minimum specs will just drive people elsewhere as they honestly sounds even more hassle than PC gaming is to me. PS and Xboxes are already close enough to bring glorified PCs, we don't need them going any further down that path.

It’s honestly disheartening to see how little Microsoft cares about the Xbox hardware, seriously how tf are they expecting a decline when both Nintendo and Sony sell consoles as hot cakes and the generation has not even peaked?
How can they say this when GTA 6 is going to drive consoles like crazy next year, or as they now own CoD they could do a big marketing push for people to now associate the franchise directly to Xbox as in the 360 days.

Even if it isn’t their top priority there’re many ways to save this generation and at the very least sell more consoles than last gen, but Microsoft legitimately don’t care and I’m increasingly worried about having invested so much in the Xbox ecosystem, making me wonder if I should have gone with the PS5 as my main console instead…

Honestly if we end up getting an xcloud app for the Apple TV I don’t think I’ll need a console at all.

@XboxistheBestBox Microsoft would do well to listen to the complaints about the PS5 from gamers and get more single player adventure titles and weird Japanese curio titles out the door asap.

Sony are spacing out the single player games but the PS4 existed on a diet of PSP ports for its weirdness. Sony have since closed their Japan Studio

I’m starting to wonder if this is the last Xbox I’ll own, MS really do seem determined to make their hardware irrelevant. Maybe they’ll offer just a streaming box with Gamepass in the future? I don’t know but it’s kind of grim thinking about it.

@Kaloudz You're absolutely right. Hardware sales isn't the only metric for success in this age of gaming. Now we have subscription metrics, digital sales metrics, monthly active user metrics, how many people accessing content across a multitude of platforms metrics, and the list gies on. The "my plastic box sold more than your plastic box" way of thinking is dead in the business world and only exists in the feeble minded. Business is complex nowadays.

@XboxistheBestBox Hardware is important, but I think capturing as many gamers as they can across PC, tablets, smart phones, AND console, is the real end game here. Get as many people into your ecosystem as possible and drive profits and revenue. The console has truly become "just another way to play" and Xbox as a brand is becoming the largest in the industry one tick of the clocks hand at a time. They're truly playing chess while everyone else is playing checkers.

@Kevw2006 i am assuming console gamers would be able to wrap their heads around it.
Gamepass PC already has a simple solution as it says things like "should play great on this pc" right on the game page.

As long as your xbox isn't like 8+ years old you really shouldn't have to worry about it in the model I am imagining. Games aren't that big of a leap over last gen as it is and that gap will only get smaller. Skipping one of the consoles in this model likely wouldn't lock you out of any games.

If you give people zero reason to own your console then zero people will own it.

Don’t get me wrong I’m not saying don’t do it but these days it’s super easy to purchase a “gaming pc” and play your Xbox titles there. In fact a lot of these PCs are hand held now….

Surprising that console sales will drop, as it’s not exactly like people are just running GPU without a console/pc.

The 6% service increase, is also relatively meh. Because there were price increases within the last year. So it’s not fully comparable.

However this is also after/around Xbox first party games dropped, and it still hasn’t translated into much of an increase in anything.

At the end of the day 3/3 doesn’t mean all is bad, there is clearly still a lot of money to be made.

The only thing I again question is what is it about Xbox that doesn’t resonate with many outside of a few countries?

@PsBoxSwitchOwner they don’t really market the console outside of the Americas well. That’s literally it.

And when they do they don’t really adapt to the marketing tactics that country.

@XboxistheBestBox That’s the thing, Xbox isn’t capitalizing in Sony’s mistakes, and with Jim Ryan they’ve made a lot, honestly I don’t see how they care about the consoles if they don’t have any type of marketing for the consoles (not even one single ad), if the OS and UI is still the same as Xbox One, if there’re broken things such as captures that they refuse to solve and so many other things that show how little Microsoft cares about the console itself.

They should focus way more on consoles as we are more than half the base of subscribers of Game Pass, which is the only metric they seem to care about, and tbh if they dropped their own hardware I wouldn’t subscribe to Game Pass or use another Microsoft product/service ever again.

If Microsoft wanted more console sales they would advertise more and get third party advertising rights like the other two do, they have the money to do so.
What is a little worrying just over half of Xbox subs are on Xbox consoles so you would think they would care about console sales but they don’t seem to.

Which indicates to me more they have a plan and nothing is stopping it and that is to leave the hardware market regardless that half of gamepass subs are on Xbox hardware, around 15 million. So without that Gamepass would only have 15 million subs on all the other billions of devices, hardly great numbers overall.

Xbox just doesn’t catch the minds and hearts of the mass general public, it has its dedicated fan base but that’s about it.

@themightyant I'm absolutely NOT A FAN of all the mid-gen upgrades. Honestly think is waste of consumers' money and waste of company's money and research/development time.

Much rather see console cycles 7-8 years in length (since the transition period 2-3 years anyway) and simply be done with it.

@Feffster There is no reason Diablo 4 isn't on game pass by now.

Well...except for greed.

@Bionic-Spencer Completely understand what you are saying. But the big issue with it is Sony isn't going to allow or support game pass on Playstation which would leave large portion of money off the table.

At this point in time, it is smart, and really a necessity, for Microsoft to continue having a serious console on the market. And by serious I mean Series X, not the weak, problematic Series S.

Microsoft needs ditch the two console model.

all xbox info say the same thing. xbox is going 3rd party sooner than we think.

It's a shame because I genuinely prefer Xbox consoles to the other 2 platforms, I hope they keep making consoles for the foreseeable future.

I think the problem is that the playstation brand is so strong that when people think gaming they think playstation but as someone that owned a PS5 at launch (and paid a lot, trust me) and that now owns an Xbox series X, I know which one I much prefer.

@Kevw2006 Absolutely!!!!! I quit PC gaming 25-30 years ago. Was complete pain. Anytime wanted play new game, had go get new graphics card for $1000, sound card $800, then spend hours trying configure drivers, then realized needed more RAM and spend another million dollars, then have call tech support, and this, and that, etc. It was all an excessive, unneeded headache.

Now, plop disc in Xbox and it runs! So I can sit back on big comfortable couch, kick my feet up, turn on 65 inch TV, turn on surround sound system, and never, regret ever being cramped up into a chair, leaning into a tiny monitor, clicking away into carpal tunnel syndrome.

@themightyant That be even worse than way "things" are now.

Bottom line, of course, is greed from console makers. And if people would simply just stop buying the mid-gen upgrade it would break this trend and business practice.

There is a reason why MS will not stop making Xbox’s, and they have basically said it. They see the future kids playing more and more games than watching Tv and movies. 2 of the biggest items in tech is a mobile phone and video games. MS regrets selling and quitting windows phones. There’s no open door to walk into that space now with Apple and Google controlling it. If they stop making Xbox consoles that would slam that door shut on them as well. It’s to important for the future and they are making money doing it. I have learned to never say never in the video game industry, so i won’t say 100% they will always have a console. But I would go with 80% or better they will until something replaces consoles and they will move to that if and when that day comes.

The hardware figures are only bad if you’re only looking at Xbox. MS isn’t just about Xbox anymore, they are about their overall gaming ecosystem. We saw signs of MS going in this direction a ways back. MS is about Xbox, PC and mobile now. They don’t care if sales from one cannibalize another. They are each pieces to the whole puzzle and MS won’t be abandoning any of them, including Xbox hardware.

And this strategy has been hugely successful thus far for them. Getting ABK across the line was HUGE as Xbox content and services revenue increased by a whopping 61% this quarter. MS’s gaming division is now the 3rd largest in revenue in the entire company, even surpassing Windows.

When it comes to MS and gaming these days, you can’t just look at one piece of the puzzle. It all needs to be looked at in unison because it’s that overall ecosystem that MS is focusing on. And while hardware sales may be weak for Xbox, the players on Xbox are spending more on average than both Sony and Nintendo gamers. That is a metric FAR more important that hardware sales.

@Bionic-Spencer @CharlieChooChoo What is with this idea that Microsoft will rebrand Xbox gamepass to Microsoft gamepass? Nothing is getting rebranded cause no one wants a Microsoft branded product. Plus what are they going to do? Rebrand Xbox games studios back to Microsoft Game Studio? The Xbox will likely continue to stay around even after the death of the console unless some new CEO comes in and mess everything up.

@carlos82 Console sales, but not PS Premium subscriptions, which is what's important in 2024. So nope to your nope. Educate yourself kid. Also, you're on the wrong website. You belong at Push Square. Bye.

@CharlieChooChoo Console sales, not PS Premium subscriptions. GP subscriptions is whats important in 2024. Not console sales. Everyone, but Microsoft, has an antiquated business mentality. Microsoft now has a three trillion dollar company, we do not. There is a reason for that.

@Romans12 what a childish response, I've been on here longer than you "kid" and will stay on this website should I wish. I play games on all platforms but at least I know to ignore your nonsense from now on, so thanks for that at least

@IOI I understand that you may be genuinely worried about Xbox, not trolling like others, so I decided to reply because honestly, there is no reason to worry like @XboxistheBestBox explained.

Even if Microsoft sells fewer consoles than Sony, their gaming business is now bigger than Sony's or Nintendo's and Game Pass is consistently popular and profitable on several platforms. Don't forget that Microsoft makes Surface devices. There is zero reason for Microsoft to drop Xbox. The people that say the opposite can't tell a single argument why, they just compare consoles sales as if that was the only thing that mattered. It's a reminiscence of the "SNES versus Mega Drive" 90s days that doesn't make any sense. There are 27.23m of Series S|X sold and 52.65m of PS5 sold, not even twice as much. It's not a problem at all. For generations, there are much more important aspects to consider like the games per console ratio and now, obviously, the subscription numbers and the software sales. Those two metrics are far more important than hardware sales. According to the analyses, Xbox players spend more and are more engaged.

EDIT: I agree that Microsoft could make more noise about Call of Duty, etc., but I think they will. PS is super popular so PSx (PS5 now) is, but software-wise its future isn't as bright right now, so they're closing studios and focusing more on PC and online games, hoping to achieve a Sony Fortnite hit or something. I don't know why would you feel safer owning a PS console, honestly.

@DKGXX85 "I think the problem is that the playstation brand is so strong"

Exactly. This is the main reason. We have to accept that that's not Microsoft's fault. PS brand is too strong in the consoles market, so many people buy it even to just play a single game; usually, a third-party game. That doesn't mean that Xbox or Nintendo will disappear from the console market.

@XboxistheBestBox "there’s not much they can do other than pump out great games."

Exactly. Microsoft is doing things right. They have expanded Xbox Game Studios and they have deals with third parties to bring their games to Xbox, including all the important Japanese publishers except Square Enix, that seems to be coming back, with some of the IPs coming to Xbox for the first time. What else can they do? Maybe restructure some of their studios. There's nothing else they can do: they already offer the best hardware, best value, best digital rights and best customer service in the consoles market. Games are coming. 2023 was great and the following years will be the same or better.

Thank you for posting, because 90% of the Pure Xbox user base is consistently negative about Xbox. Surprisingly.

@gollumb82 the steam deck is an absolute beast 👍

They did this to themselves its going to take time to rebuild. The fact that the xbox one was a disaster really hurt them. Then they closed studio after studio or mandated them to make things that didn't interest players. Look at the mismanagement of fable. Nobody wanted that ***** last game and they spent something like 70 million then never released it. If they would have let lionhead make the game they wanted it would still be an open studio and they would have had a great xbox one launch game. The kinect is the perfect example from start to finish when they started showcasing that I thought nobody wants that then they forced it down everyone's throat and it was just ***** and it made the one costs tons more than it should have.
Here is an idea make a good game and watch it roll in the cash I think indy being big will help fable being good will help and if they ever get someone to fix what the hell happened to halo that would help. Xbox has some good studios now I think a few need a little bit more of a strong hand and some guidance but not to the point of make this kind of game in this universe so we can chase a fad.
Also I have never seen an add for xbox on any site other than xbox or this one as other have pointed out.