Game Pass rescues nosediving Xbox console sales

  • Microsoft has noted a 30 percent year-on-year decline in Xbox Series S and X sales.
  • PlayStation fans can start celebrating as Microsoft has only sold 25 million Xbox machines, while Sony has sold over 46 million PS5s.
  • Low sales of the Xbox aside, Gaming is still one of Microsoft’s biggest profit drivers thanks to Game Pass.

Despite a record-setting acquisition last year when it purchased Activision Blizzard, and despite an increase in gaming revenues overall, Microsoft is struggling to move gaming hardware, specifically its Xbox consoles.

According to its latest earnings result for the third quarter of 2024 fiscal year, published last week, Xbox hardware revenue decreased 31 percent “driven by lower volume of consoles sold.” Even though fewer consoles sold in the quarter, Xbox content and services continue to make the company more and more money.

Revenues for digital content and services on the Xbox increased by 62 percent for the quarter, with Microsoft saying this boost driven by a “net impact from the Activision Blizzard acquisition.”

According to Kotaku, Microsoft has only sold 25 million Xbox Series X/S consoles to date, and if you’re looking for who is winning the Gen 9 console war, it’s Sony, with the recent sales stats of the PlayStation 5 at 46.6 million units sold.

For Sony, its exclusive titles like Marvel’s Spider-Man 2 and God of War Ragnarok are behind its moving hardware. Meanwhile, Microsoft has not been able to corner the same market with exclusives, instead, it is hoping its “Netflix but for games” subscription service Game Pass can get players to fork out for Xbox machines.

This strategy hasn’t been working, which is why Microsoft looked to buy Activision Blizzard, and with it, Call of Duty. The multi-million unit-selling franchise has yet to land on Game Pass, but this seems likely to happen as some point in the future soon.

But maybe Xbox isn’t the play for Microsoft, maybe it’s just Game Pass. The platform is also available on PC, and according to CEO Satya Nadella, Microsoft’s games are also selling like hotcakes on the PS5. “We are committed to meeting players where they are by bringing great games to more people on more devices,” he explained in a recent investors call.

This doesn’t necessarily mean that the company is looking to just shelve away the Xbox, never to be seen again. While it didn’t sell anywhere near as well as the PS5, 25 million units does not equate to small pennies. In fact, it marks more units moved than the original Xbox and would make it the 20th best-selling console ever, just below the Atari 2600.

There are also rumours that Microsoft is looking to launch a next-gen updated version of the Series S/X, one that would compete with the upcoming PS5 Pro, slated for this year’s holiday season.

Gaming in general is also not going into Microsoft’s back pocket any time soon. Its Gaming business was one of its biggest profit drivers in the latest quarter, and gaming also drove its operating expenses to $1.3 billion.

[Image – Photo by Martin Martz on Unsplash]


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