Is Xbox Done For?
Will Xbox go the way of Sega?
I’m sure many of you have heard the dire news of Xbox laying off thousands of its employees all across the world. Is it time for Xbox to finally throw in the towel and go completely third party like Sega?
The Xbox brand hasn’t been able to find it’s footing since the disastrous announcement of the Xbox One console back in 2013. I remember going to the Sony Press Conference at E3 2013 seeing the announcement of the PS4 live and I declared Microsoft to be the laughing stock of the industry in the video below.
My history with Xbox
Back in 2001 when I was in college and around the time Sega made their devastating departure from the hardware industry, my friends and I were not excited for Microsoft’s first foray into the gaming space. I always saw Microsoft as a software company and not a hardware company (although they’ve created Surface Pro tablets in recent years).
I’ve been using Microsoft products since MS-DOS and Windows 3.1 (Windows XP is still the best windows, fight me) in the 90’s. Never in a million years I would think that Microsoft would enter the fight between the juggernauts that are Nintendo and Sony now with Sega out of the picture. When Microsoft announced the Xbox, my friends and I were saying it looked like a budget PC and would fail like the Panasonic 3DO and Atari Jaguar. When the Xbox released, early reports of it crashing at kiosks made us laugh and saw it as a piece of junk as we continued playing our PlayStation 2s and the upcoming Nintendo Gamecube.
However, this all changed in 2004 when I first played the Ninja Gaiden reboot on the Xbox at Best Buy and realized how fun and fluid it was. Ninja Gaiden was always one of my favorite franchises on the NES, but was surprised that it skipped the 4th Generation (SNES/Genesis/etc) and the 5th Generation (PlayStation/Saturn/N64).
For my 23rd birthday in 2004, I asked my family for an Xbox console and I got Ninja Gaiden and the original Halo. I used to be in the camp that first person shooters were best on the PC with the WASD and mouse combo. GoldenEye 007 for the N64 was the first console FPS that I played that made me sorta change my mind about FPS games on the consoles.
After finishing Ninja Gaiden, I played Halo and was very surprised how well it played on a controller and finished the entire campaign within a week.
Later in 2004, my nephew bought me Halo 2 and that became our defacto “Party Game” that actually beat Super Smash Bros Melee whenever my relatives and friends came over. 4 player split screen Halo 2 became our main jam, even though we cheated a bit by looking at each other’s screens to find out where everyone was on the map.
In 2005 when I was buying Ninja Gaiden Black for the Xbox at Best Buy, I was asked if I wanted to pre-order an Xbox 360. I didn’t realize that Microsoft was already going to release their next console only after 4 years. My friends and I would joke that we still needed to play on the Xbox 2-359.
”I enjoyed Halo 7 on the Xbox 42!”
In 2007, I got my Xbox 360 and signed up for Xbox Live which I’ve been subscribed to for nearly 20 years now. I went to Frys Electronics and bought Halo 3 on launch day and now with Xbox Live, I was able to play with all of my friends around the world and not restricted to the 4 player split screen anymore.
I enjoyed many games and franchises on the Xbox 360 like Halo, Gears of War, and many many more. While the Nintendo Wii outsold everything in the 7th Generation of consoles and the PS3 eventually caught up, the Xbox 360 was my console for that generation.
Wow, what happened?
When the Xbox One was announced in 2013, Microsoft was focused more on the media aspect of the console and the biggest nail in the coffin was the original DRM that prevented you from lending games to your friends as your physical games were locked to your system. Luckily, the feedback was harsh enough from gamers that forced Microsoft to get rid of the DRM.
PlayStation took advantage of this opportunity to mock Microsoft and ever since that moment, Xbox hasn’t been able to regain their momentum since. When I went to E3 2013, I did enjoy what I played of the Xbox One, but I enjoyed the PS4 much more. I didn’t get an Xbox One until 2015 as there were barely any exclusives I wanted. I played Halo 5 at E3 2015 and enjoyed what little I played of it. However, the full release of the game was a disaster as it lacked the 4 player split screen my friends and I would always enjoy from the first Halo to Halo Reach. It also lacked my favorite mode “Big Team Battle” for the longest time and when it finally was available, I stopped playing Halo 5 entirely. Halo 5 also had a terrible story and main campaign that had questionable decisions made to the gameplay and characters. I mostly played my PS4 and Nintendo Switch in the 8th Generation of consoles.
“Why Xbox Lost” by Laura Fryer
I got the Xbox Series X on launch day with a lukewarm response, but I mostly used it as my Game Pass machine to play older Xbox games while I was playing my PS5 more. The biggest issue of the Xbox Series X launch was the lack of Halo Infinite which needed more time to polish and I still felt it needed way more time to polish when it was released a year later.
Game Pass
You could say that one of the catalysts for Xbox’s current downfall is Xbox Game Pass.
I’ve been subscribed to Xbox Game Pass since it’s inception since 2017 and I enjoyed it for the back catalog of Xbox games that I just didn’t have the time to play when they were new. During E3 2019, Microsoft gave away free Xbox Game Pass vouchers which enabled me to get Xbox Game Pass free for 2 years from 2019-2021.
However, I was surprised when Microsoft announced that their big triple AAA titles like Halo Infinite and Starfield were going to be available day 1 on Xbox Game Pass which I played. I also played Call of Duty Black Ops 6 and Doom The Dark Ages Day 1 on Xbox Game Pass. It almost felt too good to be true to just pay around $20 a month to play triple AAA titles Day 1. If you do the math, $20 x 12 months is $240 a year for Xbox Game Pass and you only need to play 4-5 triple AAA games to get your money’s worth. There’s also the massive back catalog which makes Xbox Game Pass worth it.
But, you don’t need to be a developer or even a businessman who’s savvy with money to ask yourself:
”Is this even sustainable?”
During the first few years of Xbox Game Pass, you mostly got the back catalog and you still had to pay for the new triple AAA releases on day 1. Reports are saying that Xbox Game Pass has been cannibalizing sales where Xbox Game Pass users only pay $20 a month instead of a $60-$70 (now going on $80) one time fee for a triple AAA title. Certain outlets have reported that Xbox Game Pass is profitable for Microsoft, but growth has been stagnant for years. I absolutely guarantee you that certain people will only subscribe to Xbox Game Pass for a month for $20, get through a triple AAA title in a few days or a week and then unsubscribe, technically only paying $20 for a triple AAA game experience.
As a game developer myself, I did try to get my game “Popcorn Rocket” on Xbox Game Pass, but I was rejected. Microsoft was pretty nice about it and told me I could always try again. However, I heard from other developers that putting their game on Xbox Game Pass does lead to more exposure, but far less sales as Xbox Game Pass users are used to not paying for games.
My game “Popcorn Rocket” available on Xbox!
Even as an Xbox Developer, I’m not privvy to the inner workings of Xbox Game Pass and if I was, I would be under NDA. I don’t know for sure, but I did hear that if your game does get accepted for Xbox Game Pass, Microsoft will reimburse your development fees and host your game on Xbox Game Pass without paying you any extra royalties which makes sense. I also heard depending on often your game gets downloaded and played and some other contractual factors determine if your game will stay or leave Xbox Game Pass.
It was probably for the best that I didn’t get on Xbox Game Pass as my budget for Popcorn Rocket was a little over $6300+ total of my own money. I’ve made nearly triple that amount on all the platforms with a decent chunk of it from Xbox thanks to Xbox President Sarah Bond promoting my game.
If I took an Xbox Game Pass deal and was only reimbursed the $6300+, I wouldn’t have made extra money from Xbox unless I was off Xbox Game Pass. The exposure would have been nice, but Xbox Game Pass users mostly play the big triple AAA titles.
According to this Gamespot interview, Phil Spencer says different developers get different deals for Xbox Game Pass, so I might not be too off in my speculations.
One of the main criticisms of Xbox Game Pass is that it makes gamers de-value games if they are widely available and makes them not want to pay for games aside from their Xbox Game Pass subscription.
Why pay $50-$70 per game if you can just spend $240-ish a year to play everything?
I have to admit that I’m part of the problem since I’ve been subscribed since day 1 and I play Xbox Game Pass games quite often. Xbox Game Pass numbers aren’t exploding the way they used to and with the stagnation in subscribers, it’s becoming a total money sink for even Microsoft’s deep pockets. Now that Xbox Game Pass is on PC, it pretty much gives gamers no reason to even get Xbox hardware except for certain console only titles.
Too Many Studio Acquisitions and Not a Big Enough Jump
Over the years, Microsoft has been buying and acquiring studios like Ninja Theory, Bethesda, Activision/Blizzard, Tango Gameworks, etc only to shut alot of them down and lay off most of their staff. Even with these studio acquisitions, Xbox has been unable to produce enough exclusive titles to stand out from the likes of Sony and Nintendo.
You would think that having massive studios like Bethesda and Activision/Blizzard that are worth billions would help Xbox get ahead, but Xbox is still releasing games on their rival platforms due to their inability to sell their own hardware.
When the Xbox Series S and X were released in 2020, this segmented the market by having 2 different Xbox consoles to choose from rather than one. The jump from the 8th to 9th Generation of consoles wasn’t a big one like from the PS1 (5th Generation) to the PS2 (6th Generation) and from the Xbox (6th Generation) to the Xbox 360 (7th Generation). Many people still kept their PS4s and Xbox Ones for their live service games like Fortnite and more. The PS5 still hasn’t outsold the PS4 due to the lack of big jump in graphics and the live service games still working on the previous generation of consoles.
AI
One of the biggest reasons for the massive layoffs is Microsoft’s focus on AI technology to replace their workforce and automate tasks. This isn’t just happening in the gaming industry, but in pretty much every industry. Companies are doing everything they can to replace everything with AI to make the most profits.
Is Xbox Done For?
Xbox has been in dire straights since 2013 due to their botched Xbox One launch and haven’t been able to keep up with Sony and Nintendo ever since. It doesn’t matter how many studios they acquire with their large pockets if they don’t have the exclusive titles like Halo, Gears of War, and Fable to get players to only play their platforms.
Now those titles are going on other platforms.
Halo 5 and Infinite which should have been flagship titles on the Xbox One and Series consoles did not perform well both critically and financially in comparison to their predecessors which drove alot of fans away. The COVID 19 pandemic made game studios hire an abundance of developers in droves as most people were stuck inside playing video games, only to crash and burn in 2023 after record profits. However, the pandemic also slowed down development times significantly due to re-adjusting to remote work, making it more difficult to coordinate with others. We saw this with Halo Infinite being delayed as an Xbox Series launch title and it’s actual botched release a year later.
We heard rumors that Xbox was going to be developing their own portable, only for it to get cancelled and become the ROG Ally Xbox version. Xbox seems to be taking one more shot at the console market with their partnership with AMD which I feel will just be a budget PC that can play Xbox games and Steam.
My final thoughts
I do believe that Xbox will try one last hurrah with their partnership with AMD and that will be their last console before going totally third party like Sega. I do admit that Xbox filled in the gap that Sega left when Sega exited the console business in 2001. I have a ton of great memories with Xbox as both a player and a developer, but the cruel reality is that this is a business at the end of the day. Without the exclusives that drew us to Xbox, their brand is best now as a third party.
“The Future of Xbox” by Laura Fryer
I still have alot of personal attachment to Xbox, so you can say that I’ll be going down with the ship, then move with my life as I did when Sega left the console business. The writing’s been on the wall for a long time and it’s time for Xbox to move onto bluer and redder pastures.
