CNBC: Xbox is losing the console race by miles. It’s part of Microsoft’s big gaming pivot

IbizaPocholo

NeoGAFs Kent Brockman

Summary
Xbox has been losing ground in console sales to Nintendo and Sony for years, with a particularly sharp decline projected for 2025.
Sales of the Xbox Series S and Series X fell 70% year-over-year in November, the worst performance among major consoles.

In 2025, Xbox Series S/X sold around 1.7 million units, far behind:

Nintendo Switch 2: 10.36 million since its June launch.

PlayStation 5: 9.2 million units in the year.

Even the original Nintendo Switch (released in 2017) outsold Xbox in 2025. Microsoft stopped officially reporting console sales in 2015 due to the widening gap with PlayStation.

The console hardware sector is experiencing a severe downturn, with its worst November in two decades according to Circana data, but Xbox is the hardest hit.

Microsoft's gaming division has experienced a turbulent year:
Massive layoffs (more than 2,500 employees).
Closure of studios like Arkane Austin and Alpha Dog Games.
Cancellation of major projects such as "Perfect Dark" and "Everwild".
Price increases for consoles and services.
Former executives like Laura Fryer and Mike Ybarra have harshly criticized Xbox's hardware strategy, calling it confusing and unsustainable.
Despite all this, Microsoft doesn't consider "winning" the console war a priority:
Phil Spencer has stated that they aren't aiming to surpass Sony or Nintendo in hardware.
The vision is to reach anyone who wants to play, regardless of the device.
Microsoft is betting on a future based on:
Multiplatform (console, PC, mobile, TV, and cloud).
A more open system, where the next Xbox will be more like a PC.
Full integration between console, PC, and cloud gaming. Xbox Game Pass is the central pillar of the strategy:
34 million subscribers by 2024.
Nearly $5 billion in annual revenue.
More than 500 games in the Ultimate plan.
Cloud gaming usage grew 45% year-over-year, expanding to 30 countries, including India.
Microsoft is considering a free, ad-supported version of Xbox Cloud Gaming as an acquisition tool, although analysts doubt its profitability.
The company has invested heavily in content through acquisitions:
Bethesda ($8.1 billion).

Activision Blizzard ($75.4 billion).

However, the exclusivity strategy has changed:
Microsoft considers exclusives "outdated."
Games previously exclusive to Xbox, including "Halo," will come to PlayStation.

The goal is to "put games first" and bring them to more platforms. Xbox is also exploring new hardware formats:
Portable consoles developed with Asus.
Devices and accessories focused on cloud gaming, such as the Backbone Pro.
Pressure to increase profit margins has driven cuts, although Microsoft denies having imposed a 30% target.
In a market saturated with consoles and handhelds, Xbox is betting that the future of gaming will be in the cloud and without platform barriers.
The end result could be the end of the traditional Xbox as a console or a profound transformation toward a services ecosystem.
 
There is a term for what Microsoft is doing, it is "publishing." As in, they are turning into a third party. They already largely are as the article indicates.

The question is how good can they do it. They don't seem to be very good at making good games anymore.
 
I'm bullish on the Xbox/Epic Games Store partnership myself.





Can Xbox and Epic dismantle the PlayStation/Steam oligopoly and establish a vibrant, open PC platform that benefits small and large developers?
 
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It's all part of part of the plan, maaaannnn. Not even Xbox as a "service" is working.
Their "Magnus" is fading out of existence at every minute and Phil has been losing his "pimp" status every time there are layoffs, Cancelations, delays and price hikes.
Panic Omg GIF
 
I'm bullish on the Xbox/Epic Games Store partnership myself.





Can Xbox and Epic dismantle the PlayStation/Steam oligopoly and establish a vibrant, open PC platform that benefits small and large developers?

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I wonder what they mean now by open platforms. Cloud based fortnite everywhere?
 
Look, you can't lose when you just arbitrarily change the game you're playing.
I love the way these articles are framed. It's not "Microsoft is giving up on Xbox because it has failed", it's "Microsoft is INTENTIONALLY losing because they don't BELIEVE IN EXCLUSIVES anymore and care about OPENNESS" lol wut

but this is what you get with a pliant media.

I'm bullish on the Xbox/Epic Games Store partnership myself.





Can Xbox and Epic dismantle the PlayStation/Steam oligopoly and establish a vibrant, open PC platform that benefits small and large developers?

This is like me saying I am bullish on the combined fortunes of the Jets and Browns.
 
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I'm bullish on the Xbox/Epic Games Store partnership myself.

Can Xbox and Epic dismantle the PlayStation/Steam oligopoly and establish a vibrant, open PC platform that benefits small and large developers?

Neither of them have been able to do it on their own. They both tried and failed hard respectively. There is zero reason to think that combining their less desirable platforms into one can have a different outcome - especially on PC where both are much further behind the competition than Xbox was in the console space. Neither of them are capable of doing what is needed to compete with PlayStation or Steam.

As a "PC first" player for the last 13 years, I have literally never seen anyone, anywhere, mention or talk about the Windows store or the Xbox PC store as a place where they even could theoretically buy games. For all practical purposes, they might as well not exist to anyone who isn't on Game Pass. Even then, I also strongly suspect the number of people paying for the PC specific tier of Game Pass is tiny. Microsoft trying to pivot to PC and compete against Steam is an even worse competition for them than trying to compete with PlayStation on the console front.

Epic is only a part of the PC gaming conversation because they give away free games and they've gotten some exclusives. It's an artificially propped up market place. I've bought games from them because I don't care which launcher I use to play a game, but the vast majority of people won't. If they didn't give away free games, and they didn't get exclusives, they would be nothing more than the dedicated launcher for the games they own (Fortnite, Rocket League, etc.)

Microsoft will give this whole thing a push for a couple of years, and then they'll wind it down just like they have every other time they tried to push into PC gaming. We saw this with Games for Windows Live, and we saw it with their push to have exclusives on the Windows Store. This is probably the 4th or 5th time they've done this dance and PC gamers know how it's going to go before the music even gets started.
 
Xq6wiwjGFTP3mYCcULR4eh-970-80.jpg.webp


I wonder what they mean now by open platforms. Cloud based fortnite everywhere?
Open Platform means everyone is allowed to sell software via their own stores if they have capacity to do so.

Windows is an open platform, they're planning to turn Xbox hardware into open platform as well with Magnus.
 
"Next year will be Xbox's best year in the brand history"

How many times have I read that sentence

Honestly I don't necessarily think it's a stretch this time, because if E Day is good, the Halo remake is good, and Forza Horizon continues to be good then they will likely have an excellent year, just not in the "selling the Xbox console" way.
 
I'm absolutely certain that once Call of Duty stops being a top seller, Microsoft won't hesitate to shut down the Xbox division. They're not strong enough as a developer to justify its profitability.
 
Honestly I don't necessarily think it's a stretch this time, because if E Day is good, the Halo remake is good, and Forza Horizon continues to be good then they will likely have an excellent year, just not in the "selling the Xbox console" way.

All three should sell very well on PS5 and Steam.
 
My theory is that Papa Phils plan could have worked, but the top brass got scared of the spend and snuffed it out.

If they locked down exclusives from their newly purchased studios (even COD), and those exclusives happened to be hits, things could have been a lot different.

When companies come under the Microsoft umbrella, they seem to start churning out weak shit. Maybe they're too relaxed because a gigacorp is funding them.

(new Indiana Jones was a welcome exception)
 
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Open Platform means everyone is allowed to sell software via their own stores if they have capacity to do so.

Windows is an open platform, they're planning to turn Xbox hardware into open platform as well with Magnus.
So something that already existed for both of them?
 
Paid the price of keeping Phil Spencer around so long.

Should have gone years ago.

Not that I think this would have been an easy situation to fix, so much damage was already done throughout the One era, but it most definitely could have been handled a lot better by someone else.

One of the worst guys to last this long in a key role in this industry.
 
Ok so the new strategy is services… good, I understand that. Recurring revenue is what every company is after.

What I don't understand: how the team who fucked up your prior strategy is allowed to stay onboard?

Phil Spencer is leading the new direction? Good luck with that!!
 
My theory is that Papa Phils plan could have worked, but the top brass got scared of the spend and snuffed it out.

If they locked down exclusives from their newly purchased studios (even COD), and those exclusives happened to be hits, things could have been a lot different.
Plan: open check book and keep buying all publishers and devs out there and remove them from their competitors.

What a brilliant strategist… I mean, it sounds hard, totally not monopolistic, and definitely something good for gamers and devs… :P.
 
I'm absolutely certain that once Call of Duty stops being a top seller, Microsoft won't hesitate to shut down the Xbox division. They're not strong enough as a developer to justify its profitability.

And do we know their current profitability now? I heard it was higher than Sony's at least.

Neither of them have been able to do it on their own. They both tried and failed hard respectively. There is zero reason to think that combining their less desirable platforms into one can have a different outcome - especially on PC where both are much further behind the competition than Xbox was in the console space. Neither of them are capable of doing what is needed to compete with PlayStation or Steam.

As a "PC first" player for the last 13 years, I have literally never seen anyone, anywhere, mention or talk about the Windows store or the Xbox PC store as a place where they even could theoretically buy games. For all practical purposes, they might as well not exist to anyone who isn't on Game Pass. Even then, I also strongly suspect the number of people paying for the PC specific tier of Game Pass is tiny. Microsoft trying to pivot to PC and compete against Steam is an even worse competition for them than trying to compete with PlayStation on the console front.

Epic is only a part of the PC gaming conversation because they give away free games and they've gotten some exclusives. It's an artificially propped up market place. I've bought games from them because I don't care which launcher I use to play a game, but the vast majority of people won't. If they didn't give away free games, and they didn't get exclusives, they would be nothing more than the dedicated launcher for the games they own (Fortnite, Rocket League, etc.)

Microsoft will give this whole thing a push for a couple of years, and then they'll wind it down just like they have every other time they tried to push into PC gaming. We saw this with Games for Windows Live, and we saw it with their push to have exclusives on the Windows Store. This is probably the 4th or 5th time they've done this dance and PC gamers know how it's going to go before the music even gets started.

Sounds like you agree that Steam should be broken up/sold off if they have such a hold that no one else can set up their store and drive significant sales volumes. What can Microsoft and Epic realistically do to disrupt the space? I think the Xbox experience holds the answer, even if it is realistically a beta product for now. Launching from the official app is more seamless than other multi-store launchers from my experience.
 
What Microsoft shoud've done is pivot the other way. Focus on hardware and exit the dev business. License their IPs (there's like 2) to other publishers.
 
Plan: open check book and keep buying all publishers and devs out there and remove them from their competitors.

What a brilliant strategist… I mean, it sounds hard, totally not monopolistic, and definitely something good for gamers and devs… :P.
It's ruthless sure, but it would have strengthened XBox, which was his job.
And really, I'd have liked to see a Playstation on the backfoot again, going all in on fighting back (FOR THE PLAYERS).
 
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Holy shit, they actually got hard numbers for Series S & X sales this year? Color me impressed.

Guess Microsoft don't give a damn anymore so they're fine with having the numbers go out there again. That said, 1.7 million's even lower than what I would've guessed, so clearly the platform's on its last, dying breaths of market relevance at any form of mass scale.

I'm bullish on the Xbox/Epic Games Store partnership myself.





Can Xbox and Epic dismantle the PlayStation/Steam oligopoly and establish a vibrant, open PC platform that benefits small and large developers?


Sure, an "open" PC platform locked behind a closed-source, proprietary, locked-down OS (Windows) and a closed-source, proprietary, locked-down storefront (Epic).

Only thing Xbox & EGS are dismantling are their own market share in respective sectors.

What Microsoft shoud've done is pivot the other way. Focus on hardware and exit the dev business. License their IPs (there's like 2) to other publishers.

That's the direction they're going to eventually go in, especially as they fire more people to replace them with AI. MS have been very egregious with AI and pushing for it, very much unlike others like the E33 devs or Larian who seem a lot more measured and rationale in their usage.

And do we know their current profitability now? I heard it was higher than Sony's at least.

Source?

Sounds like you agree that Steam should be broken up/sold off if they have such a hold that no one else can set up their store and drive significant sales volumes. What can Microsoft and Epic realistically do to disrupt the space? I think the Xbox experience holds the answer, even if it is realistically a beta product for now. Launching from the official app is more seamless than other multi-store launchers from my experience.

So punish companies who provided better competition fairly within the market, by telling them they've somehow earned too much market share, despite having way less money & resources to have attained that market share vs. much larger competitors who ran their operations poorly for years?

It's the equivalent of asking for equity, but for multi-trillion dollar corporations who should've just competed better. And if companies like MS & Epic want to gain market share, then make genuinely better products. At least Epic understand that exclusives still actually matter in helping with that, though the way Epic's been doing it (barely any 1P software of their own aside Fortnite, no 1P exclusives of their own on EGS when also looking at consoles & mobile) hurts more than help.

Paid the price of keeping Phil Spencer around so long.

Should have gone years ago.

Not that I think this would have been an easy situation to fix, so much damage was already done throughout the One era, but it most definitely could have been handled a lot better by someone else.

One of the worst guys to last this long in a key role in this industry.

He's the definition of an actual diversity hire.
 
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It's a little exhausting how every mainstream article about Xbox has to frame this situation as a pivot instead of just having the balls to characterize it as a firmly unintended business disaster, and how this new approach demonstrates that Xbox is grasping at straws and that the MS mothership is at complete odds with the Xbox business.
 
So something that already existed for both of them?
It existed only on the PC side. What's being opened up is the Console side (xbox) and more importantly Mobile. Both Epic and Xbox Mobile stores will be operational soon on Android, and iOS for EU only.

All tied together with singular license (Play Anywhere).
 
It's ruthless sure, but it would have strengthened XBox, which was his job.
And really, I'd have liked to see a Playstation on the backfoot again, going all in on fighting back (FOR THE PLAYERS).
Being spent out of business… how do you fight back when another player is buying up all third party developers and publishers and removing them from your platform 😂?
If that was the strategy it was neither brilliant nor bold… it was about using the money they made with their other monopolies to kill competition and plow money to burn the gaming industry to the ground (which they have tired to do with their GamePass game devaluing pivot)…
 
There is a term for what Microsoft is doing, it is "publishing." As in, they are turning into a third party. They already largely are as the article indicates.

The question is how good can they do it. They don't seem to be very good at making good games anymore.
More than a term there is a whole sentence: try desperately to save what could be still saved. But surely they could handle a lot better the endlife of the xbox series. They practically continue to show to don't give of fuck to the xbox fans without any kind of respect.
 
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Open Platform means everyone is allowed to sell software via their own stores if they have capacity to do so.

Windows is an open platform, they're planning to turn Xbox hardware into open platform as well with Magnus.

Windows is 100% not an open platform; you guys are falling for a marketing spiel that only ultimately benefits companies like Microsoft, because of monopolies they already have in the computing space. It's the only reason they push the "open platform" mantra in the first place.

Microsoft own Windows, its source code, Direct X, Word, Office, Excel, and all related middleware and supplementary technologies. These are ALL closed-source properties, and Microsoft is ultimately the main beneficiary to their market proliferation. Your "open platform PC" is only within the range of what Microsoft allows through technologies they release and standards they push for, that they have control over.

Your "open platform", at its root level, is an illusion.
 
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Windows is 100% not an open platform; you guys are falling for a marketing spiel that only ultimately benefits companies like Microsoft, because of monopolies they already have in the computing space. It's the only reason they push the "open platform" mantra in the first place.

Microsoft own Windows, its source code, Direct X, Word, Office, Excel, and all related middleware and supplementary technologies. These are ALL closed-source properties, and Microsoft is ultimately the main beneficiary to their market proliferation. Your "open platform PC" is only within the range of what Microsoft allows through technologies they release and standards they push for, that they have control over.

Your "open platform", at its root level, is an illusion.
I think he meant that Windows is openly harvesting personal data.
 
Since Xbox identity is Halo and it looks like there are 2 plots for this IP and the nicer one what obviously keeps the entire platform alive while the other one is pure drama and all the hopelessness that they use when it's necessary to make it legit cause it's Halo.
 
They had a decent run with consoles. Now its back to focusing on PC gaming. Where they started. Towards the end of 2026 they should reveal Magnus.

That certainly seems like the most likely direction. It isn't a victorious ending, but if they bring along a good emulator to allow your digital purchases to remain alive, it will be a lot better than previous exits.

You never know, in the pre-built PC space, they might strike a chord if they can put the right machine together.
 
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