With Xbox Console Sales in a Frightening Nosedive, Is Microsoft’s Future Still Secure?
Microsoft recently shared its earnings report, and the news for its Xbox consoles is not good. Sales for the physical Xbox hardware dropped by 29% compared to the same time last year. This is not a new problem; console sales have been falling for the past year.
The main reason for this drop seems to be higher prices. Microsoft has increased the price of its Xbox consoles twice. These price hikes make the consoles much more expensive than when they first came out. People are simply buying fewer of them.
Here is how the prices have changed in the U.S.:
- Xbox Series S (512GB): Now costs $399.99, which is $100 more than its original price.
- Xbox Series S (1TB): Now costs $449.99, also $100 more than its launch price.
- Xbox Series X Digital: Now costs $599.99, a $150 increase.
- Xbox Series X: Now costs $649.99, also a $150 increase.
Microsoft explained that rising costs and tariffs forced them to raise prices.
Even though fewer consoles are being sold, Microsoft as a company is doing very well. Its total revenue grew to $77.7 billion. Money from Windows, Search, and news advertising also went up.
In the gaming division, total revenue actually increased by 1%. This small increase did not come from selling new consoles or Microsoft’s own new games. It came from subscriptions like Xbox Game Pass and sales of games made by other companies. Microsoft also raised the price of Game Pass recently, which helped bring in more money. This shows that while people are buying fewer Xbox consoles, they are still spending money on the games and services available through the Xbox platform. The company’s focus appears to be moving from selling hardware to selling subscriptions.