Everyone knows Xbox is doing so hot these days, but new research from Statista Consumer Insights has put that common belief to the test.
Xbox is “unhealthy” according to new CEO Asha Sharma, which has led to thousands of layoffs this summer and many more throughout the next fiscal year. Gaming as a whole is struggling from a variety of headwinds, including the memory crisis, dilution of attention, competition from non-gaming hobbies, and potentially an unhealthy dependence on free-to-play forever games like Fortnite.
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Indeed, Microsoft’s gaming division saw a decline to the tune of 11% last fiscal year, which sources tell me almost entirely revolves around Call of Duty having an off year. I suspect diversifying the Xbox business would probably be a good idea to reduce dependence on the firm’s handful of mega-games, but that’s a discussion for another time.
It’s no secret that Xbox One was ill-received by the core gaming community, and Microsoft is still paying for those mistakes over a decade later. New data from Statista Consumer Insights put common beliefs about Xbox’s performance to the test, surveying over 3,200 gamers in the United States.
Users were asked which console platforms they frequently play on specifically, with PC and mobile excluded from the picture. Of console players in the United States, some 85% frequently play on PlayStation platforms, 76% play on Nintendo platforms, with Xbox coming in last at 58%. The figures suggest that most people own multiple consoles and frequently play across different platforms. What is perhaps most striking is how popular the Xbox 360 still is, which is even giving the Nintendo Switch 2 a run for its money. It aligns with what I’ve previously heard about Xbox 360 engagement, which is uniquely sticky for Microsoft.
In a universe where some service games last “forever,” there are arguably few reasons to upgrade from a PS4 or an Xbox One if all you enjoy playing is Fortnite or Minecraft and the like, which are still updated and fully functional on older platforms. At least it shows that users remain engaged, even if they are playing on older platforms. The challenge is figuring out how to convince them the upgrade is worth it.
Grand Theft Auto 6 is exclusive to Xbox Series X|S and PlayStation 5, which in a usual console cycle would likely have a dramatic upward impact on the current-gen systems. That uptake is likely going to be a tad muted for Xbox, which is struggling to source memory at reasonable prices for its Xbox Series X|S range. The box is already more expensive than ever, and has firmly slipped beyond your average luxury purchase.
It’ll be interesting to see how Xbox CEO Asha Sharma addresses the delta here. Xbox PC and Xbox Cloud Gaming are obviously excluded from the results here, and both of these platforms represent a huge growth area for Microsoft. Microsoft has barely marketed Xbox Cloud Gaming arguably, and Xbox Game Pass on PC remains a fantastic deal too. Putting more investment into these products (and maybe I dunno, marketing them?) could make for an easy win.
Sharma said that there are “200 million” Xbox players last month, but it’s unclear exactly how Microsoft arrives at this figure. Does that include Minecraft players on PS5 or Nintendo Switch for example? It’s hard to parse. What isn’t hard to parse is the scale of the challenge facing Xbox, whose identity has been rocked by a variety of experiments that landed with mixed results.
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Xbox has a new console on the horizon, in the form of Project Helix, but so too will PlayStation. The competition for the future will remain fierce, but it’s unclear if Microsoft still has the stamina to keep investing in gaming as shareholders heap demands for more AI.
It’ll be interesting to see how Xbox weathers the next few years, with no end in sight for memory shortages, demographic shifts to PC, and the rise of free-to-play perpetuating something of a race to the bottom.
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