XboxOS sets Microsoft’s gaming future
The future of Xbox depends more on its software than its hardware. A strong update of Xbox’s Windows-based gaming app — let’s call it “XboxOS” — is essential for the Xbox brand to survive beyond its massive game publishing reach.
This is a sobering reality that contradicts many recent hardware-specific rumors. Microsoft could make the smartest handheld or console ever, but it will likely appeal only to a small segment of core enthusiasts. The main problem is shrinking market share. Xbox Series S and X sales are declining rapidly. The upcoming Switch 2 will only accelerate Microsoft’s hardware losses. Many previously loyal Xbox customers have already shifted to PC or PS5. History shows that third or fourth place hardware ecosystems rarely rebound in sales.
Additionally, because Microsoft can’t rely on the same volume of sales as Sony or Nintendo, which means the company likely has to seek higher profit margins per device. This suggests Microsoft hardware will cost more than a potentially than similarly powered alternatives. I expect any next-generation hardware will be more of an experiment for Microsoft — effectively a Surface device for gamers.
Continue reading…