It’s no secret that Microsoft has lost the console war, but the scale of Xbox’s collapse in Europe in particular is stark.
According to fresh data reported by GI.biz, Sony’s PlayStation 5 is “comfortably” number one in Europe, with sales up an incredible 143% over October last year. The near seven-year-old Nintendo Switch is second despite a 20% drop in sales year-on-year. But the Xbox Series X and S have seen a whopping 52% drop in sales.
Even month-on-month comparisons are tough for Xbox. PS5 sales are up 11% in October compared to September, Switch sales are up 10%, and Xbox sales are down just under 20%. GI.biz noted that Xbox’s big exclusive Starfield launched in September, whereas PlayStation had Marvel’s Spider-Man 2 and Nintendo had Super Mario Bros. Wonder in October. Both games broke sales records.
So, why does Xbox Series X and S continue to struggle in Europe? What’s caused such a dramatic console sales collapse? There are a number of theories. Speaking to IGN for a follow-up, GI.biz head of games B2B Chris Dring painted a grim picture of Xbox’s fortunes across Europe.
“The sheer absence of available console stock last year does skew these figures quite a bit,” he said. “And it’s worth noting that Eurozone countries have never been Xbox’s strongest territories. They revealed back in February they only hold 20% of the market versus PlayStation’s 80%.
“However, even in the UK, which is a market where Xbox is a lot more competitive it’s been a tough year, with Xbox Series S and X sales down 23% year-to-date. The reality is the console has very little momentum, which is such a crucial element when it comes to how successful a generation is or isn’t for a platform holder.”
One issue often cited by gamers is Xbox’s lack of big-hitting exclusives. While Starfield launched in September and hit 10 million players in less than three weeks, it does not appear to have moved the needle in terms of console sales.
By Microsoft’s own admission it hasn’t done a good enough job pumping out first-party hits. 343’s Halo Infinite, which launched a year late in November 2021, was a big disappointment. Arkane’s Redfall was a disaster it's still struggling to recover from. Smaller scale games, such as Tango Gameworks’ superb Hi-Fi Rush and Obsidian’s excellent Pentiment, were critically acclaimed but not system sellers.
“The lack of big exclusives are often cited for why this has happened, and some of the big games like Halo: Infinite didn’t provide the boost you might expect,” Dring continued. “A lot of unreasonable pressure was put on Starfield, and it did cause some sales improvement, but it hasn’t been sustained.”
While Game Pass is considered a good deal for gamers, it’s having a clear impact on Xbox game sales and potentially even sales of the console. Bethesda released Starfield on Xbox Series X and S and on PC on the same day and straight into Game Pass, for example. It seems likely this strategy, which is in direct opposition to Sony’s insistence on launching PC versions of its PlayStation exclusives years after they come out on console, is limiting Microsoft’s ability to shift hardware.
Xbox Series X and S appear to have hit a wall just three years into their life, which is obviously a big problem for Phil Spencer and his Xbox leadership team. But what can be done? After Microsoft’s incredibly $69 billion acquisition of Call of Duty maker Activision Blizzard, it seems likely Game Pass in particular will become an even more compelling subscription service. But it will take some time for the behemoth publisher to integrate itself into the Microsoft machine, and executives have indicated games such as Blizzard’s Diablo 4 and Activision’s Modern Warfare 3 won’t hit Game Pass until some point in 2024 at the earliest.
Meanwhile, Microsoft is working to get more first-party games out the door, which it has said will occur more regularly from 2024. Xbox has an army of owned studios beavering away and exclusives. Forza Horizon studio Playground is making a new Fable. Fellow UK studio Ninja Theory is making Hellblade 2. Obsidian is making Avowed. A Perfect Dark reboot is in the works, although it's still years away. Then there’s all the new games coming from Bethesda, including an Indiana Jones game from Wolfenstien developer MachineGames.
While the launch of these games may help boost Xbox console sales, Dring believes Microsoft will continue its shift away from being too focused on the console, with more energy being spent on PC and mobile. Its acquisition of Activision Blizzard is as much about taking control of King, which publishes $20 billion mobile money-spinner Candy Crush Saga, as it is Call of Duty and World of Warcraft.
“PC and mobile are dominant platforms across Europe, and will be a more effective avenue for Xbox to reach players in these markets,” Dring said. “With its acquisition of Activision Blizzard, it is now one of Europe’s most powerful games companies, just in a different way.”
According to leaked documents, Microsoft plans to launch mid-gen refreshes of both the Xbox Series X and S at some point in 2024. The upgraded Series X console is codenamed Brooklin and is digital-only, similar to the current Xbox Series S. The Xbox Series S mid-gen refresh is codenamed Ellewood.
Will these mid-gen refresh consoles prove to be a much-needed shot in the arm for Xbox? Xbox desperately needs momentum in order to stop the rot. With Activision Blizzard in tow, Microsoft’s gaming ambitions are significantly stronger. But it may not be until 2028, when Microsoft is reportedly set to launch its next-generation console, before Xbox makes its console comeback.
Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
