Game On: Xbox is losing badly to Nintendo and PlayStation
Despite gaining significant ground in sales and public image in 2021-22, the Xbox brand has been dragging itself through the mud this year.
Microsoft’s $68.7 billion deal to acquire Activision-Blizzard was recently blocked by the UK’s Competition and Markets Authority, their hyped-up exclusive title Redfall has been a critical and commercial failure, and Xbox hardware sales are down 30% year-over-year.
CEO of Xbox Game Studios Phil Spencer recently stated, “It’s just not true that if we go off and build great games, suddenly you’re going to see console share shift in some dramatic way. We lost the worst generation to lose in the Xbox One generation, where everybody built their digital library of games.”
Spencer’s point is refreshingly candid, but evidence contradicts him. Nintendo’s Wii U – the Wii’s followup and Switch’s predecessor – competed with the PlayStation 4 and Xbox One, offered a massive digital library, was a commercial failure by all metrics and legions of gamers have still gone on to buy a Switch, which has zero backwards compatibility with the Wii U.
The Xbox ecosystem is comparatively excellent, offering the best-value subscription with Xbox Game Pass, the most reliable online services and most comprehensive backwards compatibility features.
Controllers from the previous generation – up to a decade old at this point – work flawlessly on the Xbox Series X|S. The new systems run 100% of Xbox One games, most Xbox 360 titles and even a handful of original Xbox titles from as far back as 2001. Some of these old games now feature improvements to resolution and framerate.
It’s the exact opposite approach from Nintendo, happily charging consumers $60 for Mario Kart 8 on the Switch even to loyal customers who bought it on the Wii U in 2014. Their prolific “eShop” from the Wii U and 3DS era was shut down earlier this year, replaced by a paltry offering of retro titles available only to Nintendo Online “Expansion Pack” subscribers.
No Spencer, it really is just the lack of impressive exclusive games that prevents people from joining (or rejoining) the Xbox ecosystem.
For all its numerous faults – the notorious “red ring of death” that cost the company $1 billion in recalls being a prominent one – the Xbox 360 sold like hotcakes. The PlayStation 3 ultimately outsold it, but Microsoft had Sony dethroned for several years – a feat that hasn’t happened before or since. The Xbox 360 touted a quality library of big-budget games, while the Xbox Live Arcade service brought indie studios into the limelight too.
Simply put: the Xbox 360 had lots of excellent games, so it flew off store shelves. Microsoft blew its lead by prioritizing being an “all-in-one entertainment system” with the Xbox One, and while the company’s reputation has improved overall, the number of developers still prioritizing PlayStation and Nintendo above Xbox is noticeable – and it might get worse.
When Microsoft released the less-powerful Xbox Series S alongside their flagship Series X in late 2020, it seemed like a clever idea at the time. Priced at $300, the Series S marketed itself as a budget next-gen solution. Chip shortages also made the Series S more widely available than the Series X and PlayStation 5, so they graced the hands of actual customers while scalpers focused their efforts on the more-powerful systems.
Not wanting to limit Series S adopters, Microsoft made it a policy that all games releasing on the Series X must also run on the Series S. The consequences of this stipulation became clear to me when earlier this year, Baldur’s Gate III was announced for PlayStation 5, but not the Xbox – developer Larian Studios admitted to having trouble getting couch co-op to work on the Series S.
I’m reminded of Sega’s strategy in the 1990s, offering up two 32-bit systems: the brand-new, CD-based Sega Saturn and the “32x” add-on for the Sega Genesis. This decision fractured Sega’s consumer base and game development efforts alike and ultimately spelled Sega’s doom in the hardware market.
Microsoft has made it no secret they believe cloud gaming to be the future, and the corporation’s pockets are deep. Whatever happens to its consoles, the company will surely continue to offer PC gaming and game streaming services. But I do wonder if the Xbox Series X|S machines will be Microsoft’s last consoles.
Riordan Zentler can be reached at riordanzentler@gmail.com.