Tag: Microsoft Gaming

  • Xbox’s next 100 days: Sharma and Booty outline major ‘reset’

    Xbox’s next 100 days: Sharma and Booty outline major ‘reset’

    Key Takeaway

    – Xbox plans layoffs after admitting over-hiring, with a “reset” focused on the next 100 days.
    – The division projects only a 3% profitability margin, despite $20B+ spent on content and acquisitions.
    – Annual revenue has dropped by nearly half a billion dollars, prompting a strategic re-evaluation.
    – Leadership acknowledges overextending studio resources and failing to adequately fund key franchises.
    – Deeper cuts are expected in marketing and other areas as the company makes “hard choices” about investments.

    Microsoft’s Gaming Division Braces for More Job Cuts

    It appears that Microsofts video game branch is getting ready for yet another wave of layoffs, as Xbox CEO Asha Sharma conceded that the division has overextended its employees. This news originates from Bloomberg, which indicates that the business is planning to make a significant announcement about job reductions shortly after Microsofts fiscal year concludes on June 30th. Sharma and Matt Booty are refering to this initiative as the “Next 100 Days: Xbox Reset.”

    Deeper Reductions Expected in Marketing and Other Areas

    Even more substantial cutbacks are forcasted in marketing and various additional departments. The fresh approach comes as Xbox CEO Asha Sharma and chief content officer Matt Booty sent a candid internal note to workers, detailing what they term an “Xbox reset” to be implemented over the next three months. According to the memo which was also made publically available on Xbox Wire, both executives laid out a clear financial picture for the company.

    Financial Performance and Content Spending

    Sharma and Booty observed that Xbox is expected to conclude the year with an estimated profit margin of just 3%. When you exclude the costly acquisition of Activision Blizzard, the corporation has invested more than $20 billion on content, platforms, and hardware businesses in a mere five-year span. Despite this heavy investment, yearly revenue for Xbox has fallen by nearly half a billion dollars, a trend that has raised concerns among company leaders.

    In their communication, they wrote, “We have made mistakes and will continue to make them, but what matters is that we listen, learn, and adjust course where needed. Remember, our fans are rooting for us. Now, we start the next 100 days. It is important to have both optimism and realism as we work to reset the business.”

    Understanding the Overextension

    The duo elaborated further in a blog entry on the official Xbox site. They explained that they had expanded their network of studios when there was a need for a steady flow of content to support various strategies related to subscription services, streaming, and multiple devices. In this process, they have discovered themselves overextended as they tried to implement shifting strategies within a market that now offers more readily accessible content than before. They also acknowledged being stewards of major franchises which have huge potential and strong player interest.

    • Despite holding these valuable intellectual properties, they have not provided sufficient funding to compete and achieve victory.
    • These statements already hint at difficult choices for the organization in the upcoming month of May.
    • They concluded by stating that they are building a stronger Xbox, which requires making tough decisions about development priorities, investment areas, and the future structure of the company.
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  • Xbox Game Pass Price Hike Drops Subscribers, Now Rebounding

    Xbox Game Pass Price Hike Drops Subscribers, Now Rebounding

    Key Takeaway

    – Price increases correlated with subscriber decline; recent price cuts helped reverse that trend with acquisitions and improved retention.
    – Price reduction led to a perceived improvement in growth and retention, signaling price sensitivity in Game Pass subscribers.
    – Despite some recovery, questions remain about whether cheaper rates will meet revenue goals, with concerns about cannibalization of game sales and the Call of Duty exception.

    Microsoft has not provided specifics on the impact of the Xbox Game Pass price increases. Still, a newly leaked private memo confirms that the higher rates led to a decline in subscribers. Tom Warren of The Verge (paywalled) reported that the internal communication also revealed that recent price cuts reversed that trend.

    Pricing shifts and leadership notes

    The message included guidance from Xbox CEO Asha Sharma, who earlier admitted that the subscription service had “become too expensive for players.” According to the executive, “Growth slowed down, and subscriber loss accelerated after the pricing and SKU changes last year.” However, she then explains, “Since our price reduction, we have seen acquisitions grow, and retention improve, which is a good first step.”

    Past trends and 2024 updates

    “Subscriber loss accelerated” hints at declines even before gamers faced higher costs. Sharma references last year, but Microsoft announced a prior Xbox Game Pass price increase in 2024. The Ultimate tier went from $16.99 per pet to $19.99 per month, while other plans also became costlier.

    Previous adjustments drew criticism, but the October 2025 announcement was likely more damaging. Ultimate subscribers were asked to pay $29.99, with other tiers losing access to day-one releases. Shortly after Sharma took over as CEO in February, she authorized a drop to $22.99. PC users also benefited, but players lost access to future Call of Duty games.

    Experiments and potential bundles

    Xbox has explored other ways to boost the subscription service. Discord now offers a Starter Edition packaged with Nitro plans, which includes a limited selection of titles and cloud gaming. In addition, rumors have emerged about Netflix bundles and a standalone free cloud streaming option.

    Despite the positive signs, it’s unclear whether the now-cheaper rates can meet revenue goals. Even if subscriber counts improve, Microsoft may not see a sufficient return on its investment. The Call of Duty exception should help, but concerns that Game Pass games are cannibalizing sales persist.

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  • Microsoft Gaming Rebrands as Xbox Before Project Helix Console Launch

    Microsoft Gaming Rebrands as Xbox Before Project Helix Console Launch

    Key Takeaway

    1. Microsoft Gaming has been rebranded solely as Xbox, signaling a return to emphasizing the Xbox identity.
    2. The company is making internal changes, including new branding and slogans, to align with this shift.
    3. The focus appears to be on revitalizing the Xbox brand and possibly modifying its market and exclusivity strategies.

    Microsoft’s Focus Shift to Xbox Branding

    Microsoft’s CEO Asha Sharma has been making some big moves lately, in a kinda surprising turn, she no longer see the company as Microsoft Gaming, but just Xbox. Her aim is clearly to get back to a core identity that fans and employees alike can rally around. The change, while it might not have caused alot of buzz initially, signals a future where Xbox sits firmly at the center of Microsoft’s gaming universe.

    Internal Changes and Company Culture

    Recently, there was a company town hall meeting where Sharma told staff that the gaming division should just be called Xbox, removing the ambiguous identity of Microsoft Gaming. The offices have also tada! shifted their branding, with slogans like “return to Xbox” and “great games” on the walls, making it pretty clear that the focus is on the Xbox universe. Rumors say that even the new logo spotted at headquarters looks more polished and fresh compared to before, hinting at a new visual direction.

    Strategic Direction for Console and Game Development

    Also interesting is what this means for upcoming hardware. Microsoft apparently is leaning toward marketing a new Xbox console with a more streamlined logo, possibly signaling a new generation. While gaming has a rich history dating back to the 1980s, this focus on Xbox now, especially after Phil Spencer’s emphasis on cloud gaming and multi-platform approaches, suggests a change in how Microsoft wants to position its hardware and software in the future.

    Brand Campaigns and Fan Engagement

    Sharma’s decision to dismantle the “This is an Xbox” campaign shows a move to clarify the brand’s message to fans, particularly those still nostalgic about the original Xbox days. But her emphasis on Project Helix, which combines PC and console elements, might not sit well with loyalists who expect exclusives and traditional hardware support. When she said “Hear you”, she kind of left the door open for possible tweaks in their multi-platform strategy, which keeps gamers on their toes.

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  • Microsoft delays Fable as GTA 6 release risks Xbox game lineup

    Microsoft delays Fable as GTA 6 release risks Xbox game lineup

    Key Takeaway

    1. The upcoming Fable game has been internally delayed, potentially shifting its release to 2026.
    2. Microsoft is concerned about launching Fable close to GTA 6, which is expected to dominate the market upon release.
    3. Even if launched in October, Fable faces stiff competition from GTA 6, making 2027 a more likely release window.
    4. Despite delays, Microsoft has other major titles like Forza Horizon 6 and Gears of War: E-Day scheduled for 2023-2026.
    5. The timing of Fable’s release is crucial for Microsoft’s first-party lineup to meet investor expectations.

    Microsoft’s Game Release Planning Getting Complicated

    In recent news, it seem like Microsoft might be rethinking when they gonna drop some of their Xbox games. Insiders say that the famous Fable series may get delayed internally, probably because of all the fuss about other big titles. Like, Rockstar’s upcoming GTA 6 might be dominating the scene, making it hard for other releases to shine.

    Financial Impacts and Fan Expectations

    Microsoft’s gaming sector is not exactly on fire lately — the latest reports show some losses, especially with new games and services like Game Pass. Fans are eager to see if Playground Games can bring Fable back to life after a rough patch, but it might be a while yet. The original plan was to launch in fall, but now things look unclear.

    Release Date Uncertainties

    According to expert Jeff Grubb, there’s a good chance Fable might not make it in 2024. He mentioned that they’re still trying to release it this year but are worried about GTA 6’s debut. And with GTA 6 expected to come out around November, Microsoft might aim for December to cash in on holiday shopping. Still, that’s close to GTA’s release, and everyone knows how dominant that game could be.

    Marketing and Competition Challenges

    GTA 6 will start getting marketing buzz in the summer, but some fans fear another delay might kill the hype totally. It’s a game-changer, and publishers are racing against time to adjust their schedules. If Playground Games can’t finish Fable soon enough, then a 2027 release window is more likely. Xbox needs enough big titles in the pipeline to keep the investors happy, you know?

    Other Titles to Keep Fans Excited

    Even if Fable gets pushed back, Xbox fans still have plenty to look forward to. For instance, Forza Horizon 6 drops on May 19th, promising great racing action. Also, during a June event, they will showcase Gears of War: E-Day, also scheduled for 2026. Plus, there’s the Diablo 4 expansion, Lord of Hatred, and Halo: Campaign Evolved lurking in the background. Microsoft probably has enough on their plate to justify a delay on Fable if needed.

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  • Xbox Game Pass Might Offer Cheaper Tiers and Netflix Bundle

    Xbox Game Pass Might Offer Cheaper Tiers and Netflix Bundle

    Key Takeaways

    1. Asha Sharma, the new CEO of Microsoft Gaming, reassured fans of Xbox’s commitment to consoles amidst concerns about the brand’s direction.
    2. There are plans to revamp pricing models for Xbox Game Pass, potentially introducing lower-priced tiers to attract a wider customer base.
    3. Recent price hikes for Game Pass tiers include $29.99 for Ultimate and $14.99 for Premium, limiting access to new releases for some players.
    4. A possible free, ad-supported option for Xbox Cloud Gaming and bundling Game Pass with other subscriptions are being considered to lower costs.
    5. Microsoft is exploring partnerships beyond gaming, including discussions with Netflix, to enhance the Game Pass offering, although details are still in early stages.

    Since Asha Sharma took the helm as the CEO of Microsoft Gaming, she has faced pushback about the brand’s direction. She reassured fans that the company is still devoted to Xbox consoles. According to a recent report from The Information, which is behind a paywall, Sharma might also tackle the controversial rise in Xbox Game Pass pricing.

    Pricing Models Under Review

    The tech site, known for its business insights, reports that, based on various sources, the CEO is thinking about “revamping pricing models to offer lower-priced tiers.” The aim is to broaden the appeal of Xbox consoles and the subscription service to reach a “wider variety of customers.”

    In early October 2025, Microsoft revealed substantial increases in Game Pass prices. The Ultimate tier is now priced at $29.99 per month, while the Premium tier demands $14.99 every 30 days. This limits the number of players who can access new releases on launch day, though the PC tier remains unchanged for the time being. For those on a budget, there’s the $9.99 Essential option, but it offers even fewer benefits.

    New Options on the Horizon

    Lately, there have been whispers about a potential free, ad-supported option coming soon. However, it seems more likely that it would be a distinct Xbox Cloud Gaming service. Another approach to lower costs could involve bundling Game Pass with other subscriptions.

    Not long after Sharma stepped into her position, Jez Corden from Windows Central shared some buzz regarding the future of Game Pass. One possibility mentioned is that fans of World of Warcraft might not need to pay for two separate subscriptions anymore. Similarly, services like Fallout 1st and Minecraft Realms could become less pricey for Xbox users.

    Exploring New Partnerships

    The company might also look into collaborations beyond the gaming industry. The Information indicated that Sharma has been in talks with Netflix CEO Greg Peters. However, any plans remain in the early stages, with Peters noting that Microsoft is still “figuring out how to make the Game Pass bundle work for Microsoft.”

    Unfortunately, it’s uncertain if any new tier or bundle would provide the same value at a lower cost. Regardless, alongside a discount to promote console upgrades, Microsoft might find ways to make the Xbox Game Pass price hike more acceptable.

     

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  • Analyst Calls New Xbox Console “Dead” Amid Game Pass Price Hike

    Analyst Calls New Xbox Console “Dead” Amid Game Pass Price Hike

    Key Takeaways

    1. Microsoft’s Xbox Game Pass growth outlook is uncertain after a significant price increase for the Ultimate tier, impacting its appeal.
    2. Analyst Michael Pachter expresses skepticism about the leadership of newly appointed CEO Asha Sharma, highlighting ongoing challenges in subscriber growth.
    3. Pachter suggests an “a la carte” option for Game Pass could attract gamers who prefer buying individual games, rather than the current subscription model.
    4. The success of the new Magnus hybrid console is in doubt, especially without exclusive titles to encourage users to adopt the platform.
    5. Rising costs for storage and memory, along with the Game Pass price hike, present financial hurdles for Xbox fans, complicating their commitment to the platform.

    Wedbush Securities analyst Michael Pachter once thought that Microsoft would surpass predictions for Xbox Game Pass growth. However, after a significant price increase for the Ultimate tier, he now views the future of the subscription service as uncertain. Pachter believes that while it is crucial for the new Xbox console’s success, it won’t necessarily boost hardware sales.

    Questions About Leadership

    As a veteran in the gaming field, Pachter often makes bold claims during his podcasts. Recently, GamesBeat inquired about the recent changes at Microsoft Gaming. The analyst expressed skepticism about Asha Sharma, the newly appointed CEO, and her suitability for the role. He also pointed out that the company’s unsuccessful attempts to grow subscriber numbers led to necessary changes.

    Concerns About Game Pass Value

    Pachter stated, “The issue with Game Pass was it was all or nothing.” He suggests that an “a la carte” type of option would be more appealing, as it doesn’t attract those who buy games individually. The Xbox Game Pass now costs $30 for its top tier, making it less appealing. Some gamers typically spend around $140 a year on just a few games, rather than the now $360 annual fee.

    Doubts Over New Console Success

    The Magnus hybrid PC/console could be compatible with Steam, but Microsoft needs users to adopt the platform. Without exclusive titles, Pachter is skeptical that gamers will switch over. He boldly states, “I think the console is dead. I think they’ve already messed it up with the console by pushing Game Pass.”

    It seems unlikely that Microsoft will stop working on the console at this point. In early February, AMD’s CEO Lisa Su hinted at a potential release in 2027. Asha Sharma, after taking her position, also assured that hardware development is still a key focus. However, the price of the new Xbox console remains a significant issue, which Sarah Bond previously referred to as a “high-end” product.

    Financial Hurdles Ahead

    Increasing costs for storage and memory may further hinder affordability. Coupled with the recent Game Pass price hike, Xbox fans are being asked to make a considerable financial commitment.

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  • Ex-President’s Move to Cloud Gaming Sparks Xbox Console Tension

    Ex-President’s Move to Cloud Gaming Sparks Xbox Console Tension

    Key Takeaways

    1. Phil Spencer’s and Sarah Bond’s departures raise concerns about Xbox’s future and internal tensions within Microsoft Gaming.
    2. Sarah Bond’s brief tenure as Xbox President focused on expanding the audience but faced pushback from employees over reduced emphasis on traditional consoles.
    3. Employee dissatisfaction with Bond’s leadership led to several departures, highlighting issues within the organization.
    4. Financial struggles persist, with declining hardware revenue and an unclear strategy impacting profits.
    5. Asha Sharma’s appointment as the new CEO of Microsoft Gaming may lead to a renewed focus on Xbox exclusives and hardware, despite skepticism about the company’s direction.

    The recent departure of Phil Spencer, the CEO of Microsoft Gaming, has stirred concerns regarding the future of Xbox. Additionally, President Sarah Bond’s resignation might hint at underlying tensions within the organization. A new report from The Verge, which is behind a paywall, explains how employees pushed back against her shift away from traditional gaming consoles.

    Leadership Changes and Inquiries

    Tom Warren pointed out that the blog post from Microsoft on February 20th didn’t mention Sarah Bond’s exit. While Spencer acknowledged her contributions, she delayed her comments until later updating her LinkedIn profile. This has left many wondering what prompted such an unexpected announcement.

    Bond’s Short Tenure

    Bond took on the role of Xbox President in 2023, shortly after the completion of the Activision Blizzard acquisition. As noted by Senior Editor, her primary goal was to broaden Microsoft Gaming’s audience. Key aspects of this approach included Play Anywhere and cloud gaming on devices like Windows handhelds, smartphones, and smart TVs. However, the reduced focus on Xbox consoles led to friction among staff.

    The Verge’s report indicates that the strategy “had been failing internally and been questioned multiple times.” Several employees who had worked under the previous President chose to leave, indicating dissatisfaction. Warren spoke with current employees, learning that numerous individuals felt “relieved that Bond is leaving Microsoft.” Some sources describe her as “difficult to work with,” although they also recognize her business skills.

    Financial Challenges Ahead

    Bond’s unclear This Is an Xbox campaign, as detailed in Microsoft’s recent quarterly earnings report, hasn’t led to increased profits. With a steep decline in hardware revenue, fans might soon witness yet another shift in strategy.

    With Asha Sharma stepping in as the new CEO of Microsoft Gaming, some critics have raised concerns about her dependence on AI technology. She has also made a number of gaming-related posts on social media that failed to sway doubters. Nonetheless, in her message to followers, Sharma proclaimed the “return of Xbox.” This transition could mean a renewed focus on first-party Xbox exclusive titles and hardware once again.

    Despite hints of hope, Microsoft will likely struggle to change its path at this stage. The company has heavily invested in cloud gaming and cross-platform publishing on competitors like the PS5. Furthermore, the anticipated new Xbox console may not be very user-friendly for living rooms, as it is said to operate on Windows.

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  • Microsoft Gaming CEO Resigns as AI Focus Shifts at Xbox

    Microsoft Gaming CEO Resigns as AI Focus Shifts at Xbox

    Key Takeaways

    1. Phil Spencer will resign as CEO of Microsoft Gaming on February 23, 2026, with Asha Sharma taking over leadership.
    2. Xbox President Sarah Bond is also leaving the company, and no replacement for her position has been announced.
    3. Asha Sharma aims to promote creativity in gaming and has “no tolerance for bad AI,” emphasizing quality and unique vision in game development.
    4. Sharma plans to refocus Xbox on consoles while maintaining a multiplatform approach across PC, mobile, and cloud.
    5. Phil Spencer will assist in the transition until summer 2026 to ensure a smooth change in leadership.

    Microsoft’s gaming branch is on the verge of notable changes. Phil Spencer will resign as CEO of Microsoft Gaming on February 23, 2026, with Xbox President Sarah Bond also leaving the company. Asha Sharma is set to take over leadership. No replacement for the Xbox President position has been revealed yet.

    Community Reactions

    This news has sparked lively discussions in the gaming community, especially since Sharma was previously in charge of Microsoft’s CoreAI division. Phil Spencer has been the public representative of Xbox since 2014, leading the brand through a significant pivot after the difficult launch of the Xbox One. Under his guidance, services like Xbox Game Pass were launched and greatly expanded. With Sharma now taking the lead, Microsoft’s gaming division might be moving into a new era. Many Reddit users are concerned that generative AI could become a greater focus in the company’s upcoming plans, given her background.

    Addressing Concerns

    In her initial interview with IGN as the head of Microsoft Gaming, Sharma aimed to alleviate these worries. She made it clear that she has “no tolerance for bad AI,” highlighting that AI should promote creativity instead of generating bland, lifeless content. She emphasized the importance of quality and a unique creative vision in game development. A truly remarkable game, as she pointed out, is one that leaves an emotional impression and offers a clear viewpoint. She referenced the narrative adventure Firewatch as a prime example.

    Future Strategies

    Simultaneously, Sharma plans to refocus Xbox as a brand centered around consoles while still keeping its multiplatform approach across PC, mobile, and cloud. To gain the community’s trust, she must show that these goals lead to tangible results. Phil Spencer will continue to provide advice until summer 2026 to help with the transition.

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  • Microsoft Faces Accusations of Misleading Xbox Game Pass Profit Claims

    Microsoft Faces Accusations of Misleading Xbox Game Pass Profit Claims

    Key Takeaways

    1. Phil Spencer claims Xbox Game Pass is financially sustainable, but critics question its viability due to high costs.
    2. Christopher Dring suggests Microsoft may be overlooking significant losses from first-party game development when assessing Game Pass profits.
    3. There are doubts about the accuracy of Spencer’s claims regarding Game Pass revenue, with some gamers feeling misled.
    4. Microsoft’s acquisitions of studios for Game Pass have led to job cuts, raising concerns about the service’s impact on the gaming industry.
    5. Uncertainties remain about the financial effects of Game Pass, with potential for increased subscription fees and a reduced variety of games.

    Critics often question how Xbox Game Pass can be financially viable given the numerous costs involved. Phil Spencer, the CEO of Microsoft Gaming, asserts that the service yields sustainable profits. However, Christoper Dring from The Game Business has suggested that Microsoft might be using questionable accounting practices. It seems the company overlooks the lost earnings that its studios face when they release Xbox games on Game Pass.

    Possible Losses

    Dring elaborates that Microsoft accounts for expenses related to third-party titles, marketing, and service fees. Nevertheless, he believes that when first-party development costs are taken into account, Xbox Game Pass could actually be operating at a loss.

    Misleading Claims?

    Gamers have started to accuse Phil Spencer of giving a distorted view of the financial status of Game Pass. Back in October 2022, Spencer stated that Game Pass accounted for 15% of the overall gaming revenue for the company. While he had expected Game Pass to continue being profitable, those claims now seem doubtful.

    Industry Impact

    In the last few years, Microsoft has purchased several studios to create games that launch on Xbox Game Pass on day one. Unfortunately, many of these developers have recently faced job cuts at Microsoft. Studios like The Initiative, known for the highly anticipated Perfect Dark, have been affected. This situation led Raphael Colantonio, the founder of the now-closed Arcane Studios, to criticize Game Pass as harmful to the gaming industry.

    There are still uncertainties about how the Game Pass subscription model affects finances. Some games may thrive under this model, while others could earn more through a regular pricing structure. Nevertheless, critics argue that Dring’s findings suggest that Microsoft made unwise investments. The layoffs at Xbox Game Studios might stem from these decisions, which could result in a reduced variety of games for players.

    Awaiting a Response

    Microsoft has yet to provide an official statement concerning Dring’s findings. However, in light of the new information, many fans are expecting even steeper subscription fees for Game Pass. Microsoft may also come to the conclusion that pouring its significant resources into this service is no longer a smart move.

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    Microsoft Faces Accusations of Misleading Xbox Game Pass Profit Claims
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  • Microsoft Gaming Revenue Grows Despite Declining Xbox Sales

    Microsoft Gaming Revenue Grows Despite Declining Xbox Sales

    Key Takeaways

    1. Microsoft Gaming’s Q1 2025 revenue increased by 5% compared to Q1 2024, despite a 6% drop in hardware sales due to weak Xbox console performance.

    2. The availability of fewer exclusive games for Xbox, with previously Xbox-only titles now on PlayStation, is impacting the user experience.

    3. The sales gap between PS5 and Xbox consoles is widening, with PS5 outselling Xbox Series X|S by nearly 3 million units in the past year.

    4. While overall hardware sales in the gaming sector are declining, Microsoft is seeing growth in software and subscription services, with an 8% increase in digital services revenue.

    5. Microsoft is exploring new hardware options, including a rumored handheld device and the possibility of a new Windows-based Xbox console by 2027 or 2028.

    As the sales figures for Q1 2025 start to emerge, Microsoft Gaming has recently released its earnings report. The revenue has seen a 5% increase from January to March when compared to the same period in 2024. On the flip side, hardware sales took a hit, dropping by 6%, mainly due to sluggish Xbox console sales. This situation indicates that the company is increasingly depending on Xbox Game Pass, cloud gaming, and cross-platform publishing to drive its growth.

    Limited Exclusives

    For those who own an Xbox Series X|S, the experience is becoming less rewarding as there are now few exclusive perks. Games that were once Xbox-only, such as Forza Horizon 5, are now available on Sony’s PS5. Additionally, while titles like Indiana Jones and the Great Circle debuted on Xbox and PCs, they are also accessible on PlayStation. In other news, Xbox Cloud Gaming has expanded its reach, now compatible with a broader range of mobile devices and Smart TVs.

    Competition Escalates

    Recent data from VGChartz shows that the sales gap between PS5 and Xbox consoles is widening. In the last year alone, 2.97 million more PS5 units have been sold compared to the Series X|S. Both Microsoft and Sony may find it difficult to rival Nintendo’s upcoming Switch 2.

    Shifting Focus

    Overall hardware sales in the gaming sector are declining in the US. However, Microsoft is faring better in the software and subscription areas. An 8% rise in digital services revenue has helped offset losses from changing strategies. The Play Anywhere initiative encourages gamers to enjoy titles like Call of Duty through Xbox Game Pass on their current consoles.

    While Microsoft Gaming may be taking a breather from hardware, it hasn’t completely lost interest. Project Kennan is rumored to be a handheld device made by Asus, potentially featuring an Xbox interface and controls. CEO Phil Spencer has reassured supporters that the company remains committed to creating gaming systems. There are whispers that a new Windows-based Xbox console could debut in 2027 or 2028, alongside leaks about three new Xbox controllers that offer cloud gaming features.

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    Microsoft Gaming Revenue Grows Despite Declining Xbox Sales

     

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