Summary
- The exclusive Xbox games era is over, as many are also available on PlayStation and other platforms.
- Microsoft’s Xbox console may be phased out due to low sales, lack of innovation, and cloud gaming expansion.
- While Xbox hardware may face uncertainty, Xbox games are doing well on other platforms, like Sony’s PlayStation.
Xbox, the youngest of the extant major console brands, has been having a rough time over the past few years, with flagging sales and lackluster content starting with the Xbox One and dipping even further into the doldrums with the Xbox Series consoles.
In many ways, the so-called “console wars” are like the format wars of yore, and in this story Xbox is Betamax or, ironically, HD-DVD.
The Age of Exclusive Games on Xbox Is Over
What makes someone pick one video game console over another? The answer is actually pretty complicated, but exclusive games have always been one of the pillars driving console sales. Sure, someone might pick a console because it has the better versions of multi-platform games (as with the Xbox 360), but it’s those games that you can play nowhere else that really influence those emotions that steer a purchase.
The original Xbox had Halo: Combat Evolved and the original PlayStation had Gran Turismo and Final Fantasy VII as prime examples. Nintendo’s exclusive roster is so strong that they could release a console that runs on coal and people would still buy it to play the latest Mario Kart.
When Microsoft bought out major game publishers like Bethesda and Activision Blizzard King, I even went out and bought an Xbox Series S so that my wife (who isn’t really a PC gamer) could still enjoy the next Fallout or Elder Scrolls game. My assumption was that after buying so many valuable and beloved franchises, Microsoft would keep them on Xbox.
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I sold the Series S because we ended up hardly ever using it. However, it turns out I had nothing to worry about, because not only are new releases like Oblivion Remastered coming to PlayStation (and maybe Switch 2?), but Forza Horizon 5 is already on PlayStation 5 as I write this, and a remaster of Gears of War is also on the way to Sony’s console.
Doom: The Dark Ages is multi-platform, and Indiana Jones and the Great Circle is also there. Now, as reported by our friends over at Game Rant, rumors that the Halo games will come to PS5 might turn out to be untrue, but at this point exclusivity is clearly not part of the strategy for Microsoft and its Xbox brand.
Betamax Lost the Format War, Xbox Lost the Console War
Which brings me to the Betamax comparison. In case you didn’t know, Betamax (a Sony format, ha!) was the competing format to JVC’s VHS, which decisively won that format war. Like the Xbox Series X, Betamax was marketed on its superior image and audio quality, but thanks to some bone-headed strategic moves and too-late improvements to recording length, the VHS wave could not be stopped.
While it’s not a perfect analogy, Xbox is now like Betamax in the sense that people have bought into this side of the console war on the expectation that they will enjoy long-term support and unique benefits. However, as my colleagues at Game Rant reported in 2024, Microsoft is already trying to figure out why some developers might skip its platform.
Like people who bought into Betamax, Xbox owners now have to see content that was exclusive to their chosen platform, go to the other side, and see new content possibly skip what they invested in. The reasons this is happening are likely no one thing. It’s a combination of having a much smaller install base, the albatross of the Series S, and a lack of compelling exclusive content to drive it all.
Funnily enough, there’s another format war that reminds me a bit of the current state of Xbox—HD-DVD vs Blu-ray.
Microsoft backed Toshiba’s HD-DVD, along with Intel, and even sold an HD-DVD add-on for the Xbox 360, but HD-DVD failed and today Blu-ray is the king of physical media, even though that kingdom is sadly shrinking. The situation in 2008 where Warner Bros. announced they would stop support for HD-DVD, and only release content for Blu-ray comes to mind when looking at the state of Xbox.
Xbox isn’t quite there yet, but with such a weakened hardware platform, and the high cost of game development, I can foresee major releases skipping Xbox, or at the very least delaying the Xbox version to prioritize other platforms.
The Odds of a Next-Gen Xbox Grows Slimmer by the Day
I should preface this by saying that, as of this writing, Microsoft has indicated it is working on next-generation console hardware. However, things can change fast in the video game industry, and even a company with pockets as deep as Microsoft can be judicious, as shown by fast and brutal cuts to the studios they’ve purchased when they don’t perform.
We could see a PlayStation 6 as early as 2026, though I personally think it will be a year or two longer given that the PlayStation 5 Pro exists as an intermediary step. In those intervening years, Microsoft may simply decide that being outsold two-to-one, then three-to-one, and potentially even worse in the future, just isn’t worth the time and effort.
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The Xbox brand (now under the umbrella of Microsoft Gaming) is being spread to cloud services, PC apps, and branded handheld PCs (according to rumors via our friends at Polygon), making the console itself just a minor part of the overall gaming pie.
What I’m saying is that you should not be shocked if Microsoft decides the sunk cost of developing a next-gen Xbox doesn’t justify the massive future losses, or at least, the lack of profit it might face after being crushed two generations in a row.
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This Is Probably Not a Good Thing for Gamers
I have to emphasize, I’m not writing this with any sort of glee. Even though I am no longer an Xbox customer, that doesn’t mean the diminished position of the Xbox in the console hardware market won’t affect me or other players on other systems.
Healthy competition drives innovation in video games and video game hardware. If the next PlayStation enters a market virtually uncontested, it would mean less innovation, higher prices, and an overall lackluster market compared to one with hot competition. You could argue this has already happened, but this might just be the beginning.
What about Nintendo? Well, Nintendo and Sony are like two ships passing each other in the night. The Switch (and I suspect its successor, the Switch 2), aren’t in direct competition with either the PlayStation or Xbox. In fact, the Switch has turned into a weird sort of neutral territory where both Sony and Microsoft have been willing to release their games for their own benefit. The Switch is on track to be the best-selling console of all time, and both Sony and Microsoft are the subject of constant rumors that they too will enter the hybrid handheld console market. Perhaps missing the point of what made the Switch such a massive success.
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But Xbox Games Might Do Better Than Ever
When was the last time you checked in on Sega? Once a giant of the console world in hot competition with Nintendo, Sega left the hardware business almost overnight after the dismal failure of the objectively brilliant Dreamcast. Yet, Sega Sammy Holdings (from the merger of Sega and Sammy Corporation) has a market cap of over $4Bn. In 2024, the company had revenue of over $3Bn. It’s a far cry from its peak either before or after the Dreamcast, but it’s still a massive entertainment company with a healthy set of software products.
Some people have even put forward the idea that the first Xbox was the spiritual successor to the Dreamcast, with Sega’s tentpole games making their way there at first.
Similarly, since releasing major Xbox games on PlayStation, Microsoft has dominated the sales charts on Sony’s console (according to Game Rant). Since the PlayStation install base is so much larger than Xbox, it’s likely that Microsoft will sell more copies of its games on its competitor’s hardware than on its own systems.
As for Xbox owners, you still have an objectively good piece of hardware with a large library to play, but the future of that hardware is uncertain, and for prospective console buyers there’s very little reason to consider backing the self-admitted loser of the console war. The theme of market consolidation has been consistent throughout the history of consoles, but this might finally be the arrival of total entropy.
Sony PlayStation 5 Pro (PS5 Pro)
