Xbox Sales Struggle: Microsoft Faces Difficulty Moving Consoles Again

Microsoft is facing a slowdown in the sales of its Xbox Series X/S consoles just two years after its launch. The company reported on Tuesday that the revenue from console hardware sales had fallen by 30% compared to the same period in 2022. This decline in revenue was mainly due to the delay of highly anticipated games like Starfield. Despite the decline in hardware sales, Microsoft’s total revenue and net income were up year-over-year by seven and nine percent, respectively, thanks to Office software and Azure cloud computing services. However, the revenue from devices such as Surface tablets and Xbox consoles suffered a 30% decline.

This decline in sales is despite big holiday discounts, including a temporary $50 price cut to the Series S. The lack of first-party exclusives has been a major factor in the drop in sales. Bethesda’s Starfield, which was originally slated to launch in November 2021, is now releasing in September. Redfall, the upcoming vampire shooter from Arkane, also didn’t make it out in time for the last quarter. Xbox content and services revenue, including the Game Pass subscription service, was up only three percent. Microsoft has been trying to attract more subscribers to Game Pass, but the lack of blockbuster titles has limited its success.

Microsoft is facing intense competition in the console market from the likes of Nintendo Switch and the PS5. However, the company has bigger plans than just selling consoles. It is rumored to be opening its app store for mobile devices and is also trying to wrap up the $69 billion acquisition of Activision Blizzard. The acquisition would give Microsoft a huge influx of popular blockbusters for Game Pass. UK regulators are expected to announce their final decision on the deal on April 26.