Benzinga - by Franca Quarneti, Benzinga Staff Writer.
Microsoft Corporation's (NASDAQ: MSFT) presence in the console market, particularly in Europe, has encountered substantial challenges.
This is indicated by a notable 52% decline in sales for the Xbox Series X and S compared to the increasing sales of Sony Group Corp's (NYSE: SONY) PlayStation 5 and Nintendo's Switch, as reflected in a report from GI.biz.
The data reveals a stark reality for Xbox, with PlayStation 5 comfortably leading in Europe, marking a remarkable 143% surge in sales over the previous year, while the aging Nintendo ADR (OTC: NTDOY) Switch follows in second place, despite a 20% decrease in sales.
The conspicuous drop in Xbox sales, both on a year-on-year and month-on-month basis, paints a concerning picture for the brand. Even with the launch of Starfield, Xbox's exclusive title in September, the impact on console sales seems limited.
Contrastingly, PlayStation's Marvel's Spider-Man 2 and Nintendo's Super Mario Bros. Wonder released in October, breaking sales records and further contributing to Xbox's comparative decline.
"The sheer absence of available console stock last year does skew these figures quite a bit," GI.biz head of games B2B Chris Dring told IGN. "And it’s worth noting that Eurozone countries have never been Xbox’s strongest territories. They revealed back in February they only hold 20% of the market versus PlayStation’s 80%."
Ding added: "The reality is the console has very little momentum, which is such a crucial element when it comes to how successful a generation is or isn’t for a platform holder."
Despite Microsoft's recent acquisition of Activision Blizzard Inc (NASDAQ: ATVI), granting ownership of franchises like Call of Duty, Diablo, Halo, World of Warcraft, and The Elder Scrolls, Xbox's console sales haven't seen a notable boost. The absence of impactful exclusives has been a recurring point of criticism. While Starfield gained rapid popularity with 10 million players within weeks, it failed to significantly uplift console sales.
Moreover, the integration of games directly into Game Pass, unlike Sony's staggered releases on PC, might be limiting Xbox's hardware sales despite Game Pass being deemed a favorable deal for gamers.
In response to this decline, Microsoft plans a more frequent release of first-party games starting in 2024. The company might pivot its focus away from consoles to emphasize PC and mobile gaming, especially with the acquisition of mobile gaming giant King from Activision Blizzard.
Leaked documents hint at mid-gen refreshes for Xbox Series X and S in 2024.
However, a complete resurgence for Xbox in the console market might hinge on the launch of its next-generation console in 2028, despite the optimistic prospects following the Activision Blizzard acquisition.
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