What Caused the Recent Decline of Xbox Hardware Sales?

There’s a lot of talk going around recently about the decrease in sales of the Xbox 360 and more importantly the Xbox One. Microsoft reported that gaming revenue was down by 9%, which has been attributed to the decline of Xbox hardware sales, which includes both the Xbox 360 and Xbox One. In regards to the Xbox 360, a decade-old system that led the majority of the last gaming generation, how is that an issue now? With fewer games being developed for it and with the Xbox One and other systems out, sure the sales are going to drop. The fact that Microsoft has also been on a roll with the Xbox One backward compatibility as of late, I’m surprised that they’re even being sold. It was a great system for its time, it’s still a great system for its gaming catalog but that is it, it had its time in the sun. 

However, on the Xbox One, there is a different story. A story that ultimately ends up being with Microsoft shooting themselves in the foot. The sales of the Xbox One weren’t that stellar in the first place, except for North America. It sells (except in Japan), it doesn’t do PlayStation 4 numbers, but it sales. The moment that Microsoft announced the Xbox One S and dropped the prices of the Xbox One, this sent a signal to anyone who was looking to pick up an Xbox One. I’ve had friends and family asking me if picking up the original Xbox One was worth it, to which I replied with several questions. Do you have a 4K TV? Do you have a decent gaming PC? Do you care about looks?

Those four questions help me show them if it’s worth it. Sure, the Xbox One S looks great and I’ve event thought about picking up one, for a while. There is an issue with this, however, is that the Xbox One S does nothing different that the Xbox One does. What the major differences here exactly, other than aesthetically pleasing changes?


Xbox One vs Xbox One S

  • Xbox One S is 40% smaller
  • Xbox One S has no external power brick
  • Xbox One S can stand vertically
  • Xbox One S can play 4K Ultra HD media

So four major changes that ultimately don’t do much in terms of gaming. I don’t know about you, but I dislike having gaming consoles standing on their sides, I’ve seen a fair share of consoles knocked down that stand vertically. To me, the only advantage here is the fact that the Xbox One S can play 4K Ultra HD content, not games, mind you. However, that goes hand in hand with owning a 4K TV. If you already own one or plan to in the near future, then sure, the Xbox One S is a clear choice. Outside of that and if you don’t play on getting a 4K TV, well that money is wasted. There wouldn’t be any advantages for the Xbox One S when it comes to gaming, so for the average gamer, the original Xbox One is a better deal as they’re being sold for a song now.

Getting back on track, you can see why the sales have dropped. Gamers who were initially going to pick up the Xbox One are now waiting for the launch of the Xbox One S, which is being pushed as a must have. That as well, I feel is being done for the wrong reasons. We already know that the adoption rate for 4K isn’t as high as everyone wants you to think, though it’s getting better. But that shouldn’t be a reason to pick up a gaming console that won’t put out a true 4K signal. If you want that, wait for the Xbox Scorpio.

Part of me wants to believe that Microsoft knows what it is doing, but another part of me is left scratching its head. You had to factor in the moment you announced not one but two new Xbox systems, that people were going to take notice. I’ve even seen people take that Xbox One and trade it in, in anticipation of the Xbox One S. So, yes I truly feel that Microsoft did shoot itself in the foot with that move.

What about Xbox Play Anywhere?


And then there’s the Xbox Play anywhere initiative, something that while I applaud, I wonder about the status of the Xbox. Don’t get me wrong, I like the fact that I can play specific titles on my PC now and get even better performance and visuals (when it’s done right!), who wouldn’t? Yet at the same time, this is also a detractor for Xbox hardware sales. I’ve even recommendation to people who don’t even own an Xbox to skip out of it for now, as they have a really robust PC. Hell, even know you can play Killer Instinct, Forza Motorsport 6 APEX, Gears of War Ultimate, Rise of the Tomb Raider and Quantum Break right now and with more on the way for Windows 10 enabled PCs. For those who play a limited number of Xbox titles, this works for them. Well, unless they like to record or stream their games, which is still an issue for UWP or the Unified Windows Platform. 

This could very well be why Microsoft has silently made changes to the Xbox Play Anywhere program. During E3 2016, Microsoft took to the stage and announced that every new title that is published by Microsoft Studios would support Xbox Play Anywhere. Anyone who caught that pieced was probably thinking if that is the case, why do I need an Xbox One anymore. I know I sure did. Of course, this was quickly changed by Microsoft and now the program will only apply to “Every new title published by Microsoft Studios that was shown on stage at E3 2016.“. This change was outlined on the Official Windows Blog, which you can here. What happened there? If I had to speculate, someone higher up at Microsoft simply put the brakes on this plan or forcibly made the change. Obviously, if they had cancelled it completely, this would have painted a huge black eye on Microsoft’s part, so I imagine this was the compromise between the two.

It’s a hard nut to crack right now for Microsoft, though one I expect to be resolved as soon as the Xbox One S releases and Xbox Play Anywhere matures. The fact that Scorpio is coming next year and will still be backward compatible with all Xbox One accessories and titles only serves to supplement both consoles when it releases.

What do you think about everything that has been discussed? Is Microsoft doing the right then or have they caused themselves more harm than good?


6 Responses

  1. Avatar

    You forgot the Xbox One S scales games up to 4k just like Ps4 Neo (I gotta put that in there before people start acting like scaling is some inexcusable sub par technique to get good results).
    And HDR gaming (that is different from being 4k, just saying).

    I will also add that at the current price of $249 the OG Xbox One is a steal. The internet is full of trolls and weirdos that have painted this crazy idea that the X1 games dont look good…. I’ll put my gaming screen shot up against any you can find on a Ps4 and the X1 holds its own. These system are from the same era and same class….. anyone that tells you different is lying, and shouldnt be trusted.

    PC gaming is different from console gaming. This guy even says it himself in a weird way….. first he talks about how all the games are coming to PC through the UWP painting as a negative….. but the UWP cant be paint as a positive so he talks about how there are things you cant do with. Bottom line is if you want great Xbox One game get an Xbox One and you will also get the games on your PC if you so desire. I plan on getting a windows 10 laptop or Surface so I can play my X1 game when I travel…….. That called a win.

    As for the decline in sales it simple…… they stopped making 360s and they just announce new hardware which is coming out at a reasonable price about a week from now….. Not rocket science.

    • Avatar
      J.j. Barrington

      360s didn’t account for enough to represent the bulk of that hardware drop. This is about YOY drops, not a few weeks or even a month or two since rumors about new Xbox hardware gained traction. The 360’s sales have, more or less, been in the basement for much longer than that, so it’s impossible for it to have been the primary contributor to a 33% drop in hardware sales.

      You ARE right that it’s not rocket science, though.

  2. Avatar
    Barry Harden

    Scaling? C’mon now. We’ve all seen how games looked back in the days of the Xbox360 and PS3. The scaling to 1080 was just awful compared to native 1080p.
    Since the Scorpio is coming out next year why bother with it at all?

    At the end of the day the XBone S is still weaker than a PS4.

    • Avatar
      Keith D. Mitchell

      More to the point, the Xbox One S is the same Xbox One we already have, just has HDR and the ability to stream 4K and upscale. Pass, I’ll wait on Scorpio.

      UWP is another issue that MS has to get around. They’ve started with allowed Freesync/Gsync. Now thy need to allow gamers to modify the games and at stream from them.

      • Avatar
        Barry Harden

        Not even sure gamers will flock to Scorpio knowing the XBox Anywhere allows PC gamers to play online WITHOUT needing XBox Live subscription.
        A slap to Xbox console owners.

  3. Avatar

    so for the 1% crowd out there with a 4K tv I guess it is a buy. Hell it is a sleek looking console, I want it in black. But the M$ track record on hardware would make me wait a bit since smaller is hotter and I remember a story of RROD from somewhere… I really hope they nail it, they deserve a win.