Xbox Console Sales Are Tanking

After months of debate about Xbox’s future as some of its big console exclusives jumped ship to PlayStation 5, we have our clearest evidence yet of why Microsoft is experimenting with a new multiplatform approach: fewer and fewer people are buying Xboxes.

The tech giant announced in its third-quarter earnings that Xbox Series X and S revenue is down 30 percent year-over-year. It blamed the nosedive on a “lower volume of consoles sold” during the start of 2024. If that sounds like a repeat of last year, it’s because it is. “Xbox hardware revenue decreased 30% on a strong prior year comparable, driven by lower volume of consoles sold,” Microsoft reported back in April 2023.

In February, Grand Theft Auto VI parent company Take-Two claimed in a presentation to investors that there were roughly 77 million “gen 9″ consoles in people’s homes. It didn’t take fans long to do the math and speculate that Microsoft had only sold around 25 million Xbox Series X/S consoles to-date. That puts it ahead of the GameCube but behind the Nintendo 64, at least for now. Given the results this quarter as well, it doesn’t seem like Game Pass and Starfield have moved the needle much.

Maybe that will change once Call of Duty, which Microsoft acquired last fall along with the rest of Activision Blizzard, finally makes its way to Game Pass. Diablo IV only just arrived on the Netflix-like subscription platform this month. But given the fact that the fate of Xbox Series X/S appears to be locked in at this point, it’s easy to see why Microsoft is looking at other places it can put its games.

Sea of Thieves, the last of four games in this initial volley to come to PS5, dominated the PlayStation Store’s top sellers list last week. CEO Satya Nadella specifically called this out during a call with investors, noting that Microsoft had more games in the top 25 best sellers on PS5 than any other publisher. “We are committed to meeting players where they are by bringing great games to more people on more devices,” he said.

If players there continue to flock to the live-service pirate sim, it’s not hard to imagine Microsoft bringing another batch of its first-party exclusives to the rival platform. Whether that means more recent blockbusters like Starfield or the upcoming Indiana Jones game will someday make the journey remains to be seen.

For now, even if the Xbox Series X/S sales have gone from bad to worse, Microsoft has made it clear it’s not abandoning hardware altogether. Earlier this year, the company promised its next console would be the “biggest technical leap” yet in its hardware history. And Xbox president Sarah Bond recently said the company “remains committed” to backwards compatibility and game preservation for players’ current and future libraries.

Update 4/25/2024 5:57 p.m. ET: Added details from the earnings call.

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