Xbox's Struggle: Can It Bounce Back?

A Tough Start

Xbox has faced significant challenges recently. The Xbox Series X and S have struggled to compete with the PlayStation 5. The issues began with a weak launch during the pandemic. Microsoft attempted to improve the situation by acquiring other game companies, but this proved insufficient. Sony's superior games and higher consumer demand for their consoles widened the gap.

Declining Sales and High Prices

The situation worsened in 2025. Microsoft canceled several anticipated games and raised prices. The Xbox Series S now costs $400, while the Series X is priced at $600. Even Costco stopped selling Xbox consoles. Microsoft also skipped Black Friday promotions.

Game Pass Price Hike

Game Pass, once a great deal, nearly doubled in price to $30 a month. Despite Microsoft's efforts to add value, the lack of exclusive games makes it less appealing. Avowed and South of Midnight were the only notable exclusives, but South of Midnight will be available on other consoles next year.

Handheld Gaming Device Flops

Microsoft's attempt to enter the handheld gaming market with the ASUS ROG Xbox Ally and Ally X failed due to high prices ($600 and $1,000 respectively). Additionally, Windows is not optimized for portable devices, making the Steam Deck a more attractive option.

Competition from Valve

Valve's Steam Machine, a compact gaming desktop for TVs, could pose a threat to Xbox. Running SteamOS, it supports gaming and allows Windows installation, potentially competing with the next Xbox.

Historical Context

The Xbox 360 was successful due to its robust online features and support. In contrast, the Xbox One was a failure, being expensive and poorly received. Sony sold twice as many PS4s as Xbox Ones.

Current Generation Struggles

This generation, the Xbox Series S and X sold around 33 million units, while Sony sold 84.2 million PS5s. If this trend continues, Sony could sell three times as many consoles. Xbox's slow sales are evident, as a family-focused console outsold it in November.

Potential Turnaround

Microsoft might change the game for the next Xbox. Partnering with AMD could lead to new handhelds or a compact gaming PC. Microsoft is already bringing new Xbox games to PCs, which could be the future of the brand.

Conclusion

While the situation is challenging, there is still hope for Xbox. Microsoft's strategic moves could save the brand, and this is something Sony may struggle to replicate.