Microsoft, on the other hand, yes they’ve failed to beat Sony in sales every gen even when they had their best shot with the 360, but their systems are still selling, and Microsoft is stupid crazy rich.
I said this elsewhere but it bears repeating:
Just because a company has a Scrooge McDuck vault of
fuck you money doesn't mean they're going to keep propping up a division that is losing money on each unit sold. Their systems aren't really "still selling"; They got a 3% YoY bump only because they put the XSX on firesale at $350, taking an even
bigger loss on each unit sold. Their actual hardware revenues were in the toilet in FY2023, down
13% in Q2,
30% in Q3, and
11% in Q4 YoY, if memory serves. (Edited to fix a memory error; Edit 2: Added links.)
Microsoft has executives and shareholders to answer to and, as it always is with capitalism, if you're not growing, you're failing. That's why this potential new strategy isn't as crazy as you may think it is. 23 years of taking hardware losses only to end up further from Sony than ever? After spending God knows how much keeping Game Pass afloat (payment agreements for third party games can't be cheap) and after spending nearly a combined $90 billion on acquisitions?
Microsoft has let the Xbox hardware brand last longer than a lot of people, myself included, thought they would. Especially given their checkered history with past hardware efforts like Zune, Windows Mobile, Windows Phone, NOKIA, and the original
table Surface. Microsoft gives hardware markets a
very short leash. Xbox has been the exception, but even Xbox's leash would reach its end one day if they couldn't become competitive with Sony.
I don't think "we have to be #1 or we quit" is the issue here. I think they'd be quite content if they were within striking distance of Sony as they were in the X360 era. But they've watched the gap between them grow over the last generation and a half and all their endeavors to stem the bleeding (Game Pass, the lower cost Series S, buying new publishers) haven't worked.