Is Microsoft already sweeping the Xbox Series X and S under the rug?

When looking at the sales figures for this current generation of consoles, it is possible to conclude that the Xbox Series S e X are facing a chaotic moment. Don’t extend this chaos to the gaming division of Microsoftwhich, as a publisher, has been achieving very interesting feats, How to be highly representative in PlayStation game sales. But, in terms of hardware, the Redmond giant’s “box of chips” is not doing well at all, and some statements by people who directly touch this segment of the company only reinforce the less than encouraging outlook.

The most recent statement to this effect came from Michael Flatthead of Xbox marketing for EMEA, covering countries in Europe, the Middle East and Africa. As reported by our fellow GameVicioin an interview with MarketingWeek, the director exposed an internal situation that would hardly reach the public. The lack of financial resources to rival the PlayStation 5 in terms of advertising. In short, Flatt has little money to allocate to important actions to promote the console.

Flatt went so far as to say that “They (PlayStation) are blessed with marketing funds that we are not able to leverage. But that is totally fine. We have taken what I would call a more fiscally responsible approach to media investments,” Flatt said.

At first glance, some may wonder: how is it that a company valued at over US$3 trillion is spending so little money, compared to its main rival, on promoting a product? But the truth is that this is not the right question. The key question is this: does Microsoft still want to invest a lot of money in the Xbox as a console?

Steve Jobs and his lesson on resignation

In one of his most frequently shared quotes, Steve Jobs addresses the issue of focus. He stated that, as a manager seeking innovation, in relation to his work at Apple, he was as proud of the things that were not done as of those that were accomplished. “Innovation is saying no to 1,000 things”said Jobs.

The sentence clearly touches on the issue of renunciation. This is a completely common situation, not only in personal life, but also in the corporate world. Companies that invest in several areas tend to have a very pragmatic view of resource allocation. Withdrawing financial figures from a project is as common as the search for incentives for others to happen.

When we look at the panorama of what the Xbox represents as a console in terms of sales, in certain regions, added to the fact that important executives in the day-to-day running of what happens with this division increasingly embrace a narrative line in favor of aspects linked to multiplatform, and “finding the game where it is”, it would not be at all surprising if Microsoft already began a process of withdrawing the Series X and S from the scene in some markets, such as Europe.

According to estimates from consulting firm Niko Partners, the Xbox Series S and X have sold around 29 million units to date, while the PS5 has already sold around 58.3 million units. If the comparison did not take into account two different consoles added together against one on the other side, the result would be even more catastrophic. Just as NVIDIA is in a kind of collective unconscious when many people think of graphics cards, the PlayStation brand has the same appeal with gamers. And this is completely related to the offensive ability to work on branding, to continue positioning this name in new places, with new costly marketing actions, but which have an effect.

As the console loses ground, the IP empire solidifies

As Flatt’s stance made clear, Microsoft doesn’t seem to want to do the same with Xbox, especially considering its dwindling sales figures. This is in stark contrast to the many laurels Microsoft has reaped as a game publisher, investing a lot of money in acquiring renowned studios that reinforce its position as an IP titan. Just to name a few: Doom, Fallout, Call of Duty, Diablo and Age of Empires.

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While some continue to fight on the internet in favor of the Xbox as a platform, Microsoft seems to continue to push the console “under the rug”. According to analyst Christopher Dringconsole sales in Europe fell by 24% in the first six months of the year. The PS5 saw a 16% drop, the Switch, almost at the end of its cycle, fell by 32%. Xbox Series S and X fell by 37%. Corroborating this harsh reality for Xbox in the European market, sources consulted by the journalist Tom Warrendo The Vergestated that Microsoft will stop selling the Xbox in some markets in this band known as EMEA (Europe, Middle East and Africa).

Last year, at an event in Brazil, Microsoft released figures showing that, combined, the Xbox Series S/X and Xbox One had accumulated around 79 million units sold.

Of this amount, the Xbox Series S/X would be responsible for 21 million units. Therefore, in the division, there would be around 58 million units sold for the Xbox One. Stop and think: will the Xbox Series S/X be able to reach what the Xbox One sold? And also reflect on the following question: in a hypothetical scenario, if Sony and Microsoft agreed to bring Game Pass to PlayStation, would a future generation of Xbox be released? Or would Microsoft forget about the console altogether and focus only on its subscriptions? It is worth remembering that in 2023, Tim Stuart, CFO of Microsoft stated the following:

“It’s a bit of a change in strategy. I’m not announcing anything broadly here, but our mission is to bring our first-party experiences and our subscription services to every screen that can play games.”

With this perspective, it doesn’t make much sense, at this stage of the game, to allocate a truckload of money to try to recover a product that seems destined to a single outcome.