We’re three years into the Xbox Series console cycle and a few things have become clear. The first is that the Xbox Series S has not worked out the way that Microsoft hoped. Not only has it not become a major driver in Xbox adoption, at least as far as we can see, but its technical limitations have started to cause issues, such as the Baldurs Gate 3 Xbox delay, and sent developers grumbling.
The second is that Xbox, despite a series of huge acquisitions, remains the tertiary console. It has its fans and still sells reasonably well but its kind of an afterthought against the absolutely enormous Switch market and the exploding PlayStation 5. Xbox’s exclusives like Starfield have failed to make the waves that the other games have, and Xbox hardware is now being regularly discounted by retailers who are not having any trouble getting stock.
Xbox has not shed the problems of the 8th generation, even if it has not repeated them. Not enough strong first party games. Limited support from smaller Japanese developers. A lack of buzz and attention. As far as we can tell PlayStation continues to outsell Xbox by at least about 2 to 1 and its not clear what Xbox can do to change that, other than come out with the system selling software it has struggled to create.
Despite this there are positives for Microsoft too. Game Pass continues to grow, though not at the rate Microsoft wanted. The Activision acquisition went through, meaning Microsoft controls a lot of very valuable IP from Diablo to Warcraft to Call of Duty. It has promised not to make much of this exclusive but it can still use it to drive the Game Pass strategy. PlayStation has some vulnerabilities with a limited announced slate for next year and its live service game initiative seemingly struggling. The Series X is arguably Microsoft’s best piece of all around hardware, even if it never manifested the advantage over the PS5 that Microsoft touted at launch.
The real issue with the Series consoles is probably that there isn’t that much to say about them. They’re capable hardware (X more than S, of course) but they’re unexciting. They don’t have Switch’s portability or PS5’s fancy controller and VR headset. They’re just classic game boxes and they work fine but without strong exclusive software they’re not that compelling. The Series S is slightly interesting because of its digital only and underpowered nature, but the flagship Series X is literally just a big black box that plays games.
Looking back over the last year there were a few games of note. Hi-Fi Rush was a huge shadow dropped surprise and a critical and commercial success. Redfall was a flat out disaster, one of the worst first party games we’ve seen since the 32-bit era. Starfield seems to have been a mixed bag, seen as a mostly competent but bland rehashing of the Fallout and Elder Scrolls formula that was so exciting 20 years ago abut has now become kind of rote. Forza Motorsport seems divisive but not the smash hit reboot that Microsoft was hoping for when it took 6 years between flagship installments.
The closing of the Activision merger sets up Xbox’s future. Xbox has also been talking about AI integration into its development suite as a big future move, but we’ll see what that looks like and how long it takes to come to fruition. I remember when cloud integration was going to be the big new thing and then it kind of hasn’t been or at least it hasn’t been notable.
I think the fourth year of the Series console will be very important. We’ll see if Sony’s apparent gap in exclusives can give Microsoft the opportunity to generate a little more buzz and attention. We’ll also see how Activision is integrated into Gamepass and whether that moves the needle. There’s the buzz of new hardware on the horizon for both Sony and Nintendo and we’ll see if Microsoft does anything there. It doesn’t seem likely since Microsoft is focused on Gamepass and potentially getting more into streaming, but perhaps a disc drive for the Series S like Sony’s detachable drive would make sense, or a form factor revision.
Otherwise Xbox seems to be in a decent, if boring, place. It needs some of the studios its bought to come online and actually start churning out hit games, which is a concern, but other than that it’s just trundling along, selling consoles and subscriptions as it reorganizes and plans for its slow integration of the Activision behemoth and whatever the plan is with that.
Of course trundling along isn’t great if you’re in last place, and being boring isn’t a way to get out of that place, but at this point it’s unclear if Microsoft cares about selling consoles. It sees the future in the cloud and in subscriptions and Xbox seems like a bit of a legacy afterthought. It’s never going to catch up with PS5 and maybe it doesn’t have to. Or maybe it will surprise us. Hopefully not with another Redfall, though.
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