No one is suggesting that Microsoft should stop making video game hardware. What we’ve been considering, here in the dark and twisted Engadget Slack channels, is whether Microsoft should keep making generationally distinct consoles in the traditional hardware cycle. Basically, does Xbox need a box? Microsoft has been busy building the foundation of a platform-agnostic, cloud-first future for video games, and it consistently falls behind both Sony and Nintendo in the console race. So why are executives trying to get us excited about a superpowered 10th-gen Xbox?
Maybe Microsoft is hesitant to reveal a drastic ecosystem change after the chaos around the Xbox One and its always-on DRM features in 2013. After an outpouring of negative feedback at the idea of a persistently online console, Xbox had to rapidly reverse its launch plans, while Sony took the PlayStation 4 on an early victory lap. This fumble set the stage for the next decade of console sales, and it’s a lesson that would stick with any studio — especially one that’s trying to make streaming and cloud gaming the norm.
That’s understandable, but it doesn’t change the fact that accessible, affordable (and probably handheld) hardware makes a lot of sense for Microsoft’s current vision and investments. More than an expensive console, at least.
This week’s stories
A delicious Elden Ring entrée
Elden Ring’s Shadow of the Erdtree expansion will come to PlayStation, Xbox and PC on June 21. This one has been a long time coming: FromSoftware announced the DLC in February 2023, leaving plenty of time for players to get super psyched for more masochism. A new, three-minute trailer for Shadow of the Erdtree shows off sprawling locations and epic bosses inspired by chaotic combinations of animals, insects and elements. The expansion costs $40 and pre-orders are live now.
Borderlands by Cate Blanchett
I’m just gonna come out and say it: I think Cate Blanchett makes a great Lilith. The first trailer for this summer’s Borderlands movie is out and it looks like Mad Max meets Guardians of the Galaxy — which is Borderlands in a nutshell anyway. The film stars Blanchett, Jamie Lee Curtis, Kevin Hart, Jack Black and Ariana Greenblatt, it’s directed by Eli Roth, and it’s due to hit theaters on August 9.
Xbox should exit the console business
Last Thursday, Xbox executives made it clear that they weren’t about to abandon the traditional hardware market, and they teased a next-generation console that will represent “the largest technical leap you will have ever seen.” That’s cool, but considering Microsoft’s position in the industry, it doesn’t feel like Xbox needs to be making consoles any more.
After acquiring half of the industry, Microsoft is now a mega-publisher of games, with over 30 in-house studios. Many of these development teams are world-renowned, with rich, multi-platform histories. It’s also the operator of one of the largest game subscription services in the world, Game Pass.
Game Pass grew wildly during the pandemic, but subscriptions have stagnated. In court documents from April 2022, Microsoft revealed it had 21.9 million Game Pass subscribers and 11.7 million Xbox Live Gold members across its consoles, for a total user base of 33.6 million. Last week, Microsoft revealed Game Pass has 34 million subscribers, which includes PC Game Pass and Game Pass Core, the new name for Xbox Live Gold. Even assuming PC Game Pass had zero subscribers in 2022, this means Game Pass subscriptions grew just 1 percent over the past 22 months. The more likely scenario is that the total number of subscriptions actually shrank over this period — though it’s at least possible that more people are paying for the full-price service than before.
Microsoft’s plan for this console generation was clear for all to see: Sell hardware and upsell a subscription service populated by its own games. Turns out, it’s tough to sell Game Pass to someone without an Xbox, and not enough people are buying Xboxes. Microsoft stopped reporting hardware numbers during the Xbox One era, but analysts peg the combined sales of the Xbox Series consoles at around 25 million. Meanwhile, Sony has sold more than 50 million PS5s, and Nintendo has sold around 140 million Switches. This gap appears to be growing every day, and it’s far more pronounced in Japan and Europe than in the United States. If Microsoft wants to grow Game Pass, it seems like it’ll have to be on platforms outside of Xbox.
This week, Xbox confirmed plans to bring four formerly exclusive games to PlayStation and Nintendo consoles, and for years executives have been pitching an ecosystem where Xbox — and Game Pass — is playable on anything with a screen. Microsoft has a powerful cloud network that even Sony uses for game streaming, plus it owns more than 30 studios. Long-term, Microsoft is positioning Xbox to be a platform-agnostic, software-publishing powerhouse with the industry’s most stable streaming network at its back.
In this landscape, it’s surprising to hear Xbox talk about building a hyper-powered console for the next generation. I’m not advocating for Microsoft to ditch the hardware market — it makes sense for the company to focus on handheld devices and affordable streaming boxes that support Game Pass and cloud play. Xbox is working toward a future where its games and Game Pass are available everywhere, which raises a clear question about its current plans: Why bring an expensive next-gen console to a war that is actually about software, subscriptions and streaming?
Bonus Content
- Sony president Hiroki Totoki told investors last week that the company would be more aggressive in bringing its PlayStation titles to PC.
- Xbox has confirmed which of its games are coming to other consoles: Grounded and Pentiment will come to PlayStation and Switch, while Sea of Thieves and Hi-Fi Rush will only arrive on PS5. Both Sea of Thieves and Grounded will support crossplay across all platforms.
- Now for a totally different port: The Pokémon Company has scheduled an anniversary stream for next Tuesday at 9AM ET. It might be a bit early for a gen-10 reveal, but a Switch remake of Black & White seems like a safe bet.
If you’re a Switch or PlayStation player curious about all of these Xbox games coming to your consoles, I have one easy and clear recommendation: play Pentiment. Obsidian’s narrative-driven, tapestry-looking game is a surprise and a delight, and I’ve had a lot of fun playing it on Game Pass recently. It’s out now on PS4, PS5 and Switch, and I’m sure it’s just as great on those platforms.
