The Xbox Series S and X have failed to surpass the 30 million sales threshold since their release in late 2020. While the consoles’ combined sales have remained at a mere 29 million at best, the PlayStation 5’s 75 million sales during the same period demonstrates a significant loss of market share for Xbox.
Xbox sales fall short of expectations
According to data shared by KeplerL2, a well-known source of information and a source of credibility through previous leaks, Microsoft’s current-generation consoles are not even close to the sales figures of the previous-generation Xbox One.
The Xbox Series S, while being promoted with a competitive pricing strategy, hasn’t been enough to boost its declining sales. Microsoft’s hardware decline isn’t limited to Sony’s PlayStation 5; it also appears to be lagging behind devices in other categories, such as the Steam Deck.
Despite the decline in sales, Xbox isn’t completely at a loss. Thanks to chip reduction and adjustments to reduce production costs, the Xbox Series X is no longer sold at a loss. Hardware profitability has been achieved.
Sony, on the other hand, reports that the PS5 is still selling at a loss, albeit a small one, with only the PS5 Pro model generating a profit. This data suggests that Microsoft has gained an advantage in hardware costs. However, this advantage doesn’t change the overall picture due to the clear difference in user numbers.
Microsoft’s service-focused strategy is resulting in significant revenue increases through Game Pass. Despite this, the decline in hardware revenue is striking. Xbox hardware revenue fell by 22% in the last fiscal quarter compared to the previous year. This figure demonstrates that the successful performance of Game Pass is not enough to offset the weak performance of the hardware.
While Xbox Series consoles are currently not generating losses, their slow sales pace raises questions about the console’s long-term sustainability. How Microsoft responds to this situation and its potential new hardware strategies will be shaped in the coming period.
