By now you've undoubtedly heard that Xbox has moved away from having exclusive titles. Instead, games are being made available to Xbox Game Pass users on day one, and other system users, like those on PS5, will gain access at a later date.
What does Xbox removing exclusivity do for the world of gaming?
Removing the exclusivity from Xbox titles provides for more cross-play across platforms and a lot more money to be made by developers. And I do mean a lot. As of 2023, Xbox had ~63 million gamers. But there are 1.8 billion PC players, 151 million PlayStation users, and 2 billion mobile gamers – AKA a lot more coins to capture beyond the Xbox userbase.
This also allows Xbox to focus on flooding the gaming market. Like right now, there are currently more new Xbox titles coming out on PS5 than there are PS5 titles.
The console wars are over
That's what the Xbox CEO himself insinuated as this strategy shift emerged. Xbox wants to focus on capturing the established gamer ecosystem, instead of spending marketing dollars trying to convert believers.
“I’m not trying to move them all over to Xbox anymore. We’re all so invested in where our games are, let’s just allow more people to play," CEO Phil Spenser said to VGC.
This strategy serves as Xbox's white flag to Nintendo and PlayStation. Xbox is tired of coming in third place to its two giant competitors. So now, instead of trying to sell the most consoles and build the largest Xbox cult, the company is focusing on the 70% – that is, the cut they get when an Xbox title sells on other platforms.
Does this mean the Xbox console is dying?
With losing exclusivity and losing console sales rankings to PlayStation and Nintendo every year, is Xbox on its dying breath? Not necessarily. But, I think they'd be smart to pull the plug on the console – and it seems like they could be setting up the chess board to do just that.
Gaming is an extremely lucrative space. With an estimated $455 billion in global revenue, the gaming industry is the most profitable industry in the world – yes, even beating fashion and cinema. But you know what has become true for industries in recent years? You make more money renting assets than owning them.
For example, Uber and TURO own no cars. AirBnB owns no hotels or houses and neither does VRBO. They essentially rent them from you, the contractor, and take a cut of your sells. In the same manner, developing games and using other people's platforms can be cheaper and carries a lot less overhead.
Plus, Microsoft already has PCs which currently boasts the largest amount of gamers out of any platform globally (see the stats above). Meaning the Xbox is a redundant expense.
Quitting is for winners
If this strategy of selling Xbox titles on other platforms is consistently lucrative for a good length of time – let's say five years for the sake of argument – we might be looking at an Xbox console shutdown. Not because players don't love Xbox, but because the world loves PC gaming and Microsoft could make money on Xbox titles by renting other people's platforms.
SEGA – God rest the Genesis' soul – famously went this route. It bowed out of the console wars early and decided to focus on creating games instead. And where are they now? You ask. Well, they kind of own this giant gaming IP named Sonic and are releasing Sonic Racing: Crossworlds soon. They also have Persona and a bunch of other beloved titles. In other words, they're doing great.
And what's more? They're proof that getting rid of the overhead of maintaining a console, bowing out the great fight and renting space on others platforms, is a lucrative strategy. In the great words of Kenny Rogers, sometimes you gotta know when to hold 'em and know when to fold 'em.
I believe that Xbox is currently at the poker table testing this new non-exclusive strategy, preparing to fold 'em and run smack dap into being a gaming studio only.
What do you think? Is the Xbox console on its way to going belly up?
Let me know in the comments below.
