As Microsoft feuds with the Federal Trade Commission (FTC) over its $69 billion acquisition of Activision Blizzard, the Xbox maker has admitted something that probably everyone already knew: it lost the console war.
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“Console wars” here refers to the constant struggles between manufacturers like Nintendo, Sony, and Microsoft to dominate the market and outperform their competitors in a given hardware generation. In a document presented in a court hearing on June 22 by Microsoft (and displayed by my city), the company has been discussing how it’s losing the console war to Nintendo and Sony since it launched with the beefy original Xbox in 2001. It suggests that both the GameCube and PlayStation 2 outsold the first Xbox by a “significant margin”. And as Microsoft noted in the document, it’s been that way ever since — even now.
“Xbox has lost the console wars and its competitors are able to continue to dominate, including by leveraging exclusive content,” Microsoft wrote. “The Xbox console consistently ranks third (out of three) in sales behind PlayStation and Nintendo. In 2021, Xbox had a 16 percent stake, while Nintendo and PlayStation had 16 percent shares [redacted] And [redacted]and Xbox also lags behind in console sales and the share of consoles currently used by gamers (“installed base”) with 21 percent, while PlayStation and Nintendo have shares of it [redacted] And [redacted]or.”
According to the Hardware and Software Sales Tracker VGChartzMicrosoft’s latest consoles, the Xbox Series X and Xbox Series S, have only sold 21 million units As of April 2023. The PlayStation 5 and Nintendo Switch are now tied at around 36 million units each, with the handheld-console hybrid having a slight lead.
As a result, Microsoft stated that it had essentially given up participating in the current console wars and instead focused on providing software (that either didn’t come out or is a flop) to its player base. We’ve seen this shift in most of Xbox’s activities today, such as the intense focus on building the Game Pass subscription service. Microsoft seems less interested in being the number one in the market and more interested in becoming the industry’s first Netflix.
“Having lost the console wars, Xbox is pursuing a different strategy than Sony [and Nintendo],” Microsoft wrote in the document. “Xbox generates profits from game sales, not console sales. That’s because Xbox sells its consoles at a loss, effectively subsidizing gamers’ purchases of the hardware in hopes of making up for the loss [lost] Income from the sale of games and accessories.”
my city I reached out to Microsoft for comment.
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Those approvals come the same way Microsoft has also stated that the next generation of consoles is expected scheduled to begin in 2028. That would indicate call of Duty would still reach competing platforms if such a game were released if the company acquired Activision Blizzard. However, Sony isn’t particularly keen on the acquisition, as Sony PlayStation CEO Jim Ryan admitted in the same hearing I would not share any information about a hypothetical PlayStation 6 with call of DutyThe developers should approve the takeover. Obviously, this could have all sorts of implications call of Duty fans on PlayStation.
