Xbox's standing in the market has never been worse than it is right now. They are getting their ass handed to them from all sides of the market, and I wonder if there is any future for them as a platform holder.
The problem is that there are four frontiers on which Xbox can fight this fight, but all four of them have established, dominant incumbents and I don't see how Xbox would ever be able beat them:
So I don't see a path forward for Xbox as a platform. All segments of the market are completely dominated by existing incumbents who seem to benefit greatly from platform lock in and ecosystem effect. Theoretically there are still frontiers for video games that Microsoft could try to get in on - VR gaming (however this is on a decline from its already niche status, and ALSO completely dominated by an existing incumbent with Meta); cloud gaming (this is something that has had multiple high profile failures in the past, Microsoft themselves ave an existing cloud gaming platform that has stagnated, and this part of the market seems to be dominated largely by Nvidia); or maybe something completely new? But based on what we have in the market right now, I don't really see a path forward for Xbox as a platform.
The problem is that there are four frontiers on which Xbox can fight this fight, but all four of them have established, dominant incumbents and I don't see how Xbox would ever be able beat them:
- Traditional Home Console: PlayStation has this part of the market under lock and key. Xbox has tried to beat PlayStation at this game for two and a half decades and barring a few golden years, never actually succeeded
- PC gaming: Arguably the one area Microsoft and Xbox should have sewn up before anywhere else, Microsoft and Xbox have a long history of consistently failing at this with their storefront attempts, from Games For Windows Live to the UWP fuelled Windows Store, and now the Xbox PC gaming platform. Microsoft's big PC gaming successes all come on Steam, someone else's platform
- Portable gaming: This is an area of the market that Nintendo has had an even longer monopoly on than Sony with consoles. In 45 tears of this market, no one has broken Nintendo's reign at the top of the portable market, including Sony and Valve, who are the guys who kicked Microsoft's ass in the other markets they tried to play in. An Xbox handheld sounds cool, but I don't see it doing very well against Nintendo, especially when Microsoft couldn't hack it against Valve and Sony in the other segments
- Mobile gaming: Arguably the incumbent in this part of the market is the hardest one of all. Apple with the App Store owns and dominates mobile gaming, and its feels unlikely anything can properly challenge that - even Epic with the world's most popular game could not do it. This is before we even mention Google Play as another thorn in MS's side, and before we talk about the fact that Microsoft has had multiple failed attempts in the mobile market in the past.
So I don't see a path forward for Xbox as a platform. All segments of the market are completely dominated by existing incumbents who seem to benefit greatly from platform lock in and ecosystem effect. Theoretically there are still frontiers for video games that Microsoft could try to get in on - VR gaming (however this is on a decline from its already niche status, and ALSO completely dominated by an existing incumbent with Meta); cloud gaming (this is something that has had multiple high profile failures in the past, Microsoft themselves ave an existing cloud gaming platform that has stagnated, and this part of the market seems to be dominated largely by Nvidia); or maybe something completely new? But based on what we have in the market right now, I don't really see a path forward for Xbox as a platform.