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Xbox

Here is my take on Microsoft’s Xbox strategy going forward

Posted on July 5, 2025 by Martin Brinkmann

Microsoft’s current generation Xbox platform is lagging behind the Japanese competition in terms of sales. Nintendo and Sony sold more than twice the number of consoles each.

Xbox performs badly, even though Microsoft spent more money on acquisitions of gaming studios than ever before. Now, Microsoft announced another round of layoffs, many of which are hitting Xbox employees or employees in gaming studios that produce games for Xbox.

Is that the preparation of Microsoft’s exit from consoles? Write off the money and move on to bigger things?

Microsoft confirmed the next generation of Xbox consoles already and revealed vital information. While the next Xbox may not be a traditional Xbox console anymore, it could give Microsoft’s ailing games business the push it needs.

Here is what might happen: Microsoft announced plans to introduce third-party games stores to Xbox. It would not really make much sense to introduce these stores without options to play games from these stores.

The next Xbox could therefore be a PC in console format, like Valve’s fabled Steam Machine. Connect to a TV, play your favorite PC games. Icing on the cake would be backwards compatibility with classic Xbox games, which Microsoft should and probably will add support for.

With PC suddenly on board, Xbox would support more games than ever produced for consoles up to this date. Even if the system would support just a few major stores, say Steam, Gog, the Microsoft Store, it would enable support for tens of thousands of games on day one. Even better, if you are a PC gamer already, you could connect your accounts to Xbox to play the games you bought already.

With massive games support, first-party titles become less of a focus to sell the next generation console. While a next generation Halo might still help sell the system, it would probably help as much as blockbuster PC games that would suddenly all be available on the Xbox system as well.

To be fair, Microsoft did not release that many Xbox exclusive games since the launch of this Xbox generation. Some, like Starfield, were console-exclusive but launched on PC as well.

So, to sum it up. Next Xbox could be powered by Windows that also supports previous generation Xbox games. It would be the end of true Xbox gaming though.

Question is, would you buy it? What would Microsoft have to do to get you to buy it? Let me know in the comments below.

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4 thoughts on “Here is my take on Microsoft’s Xbox strategy going forward”

  1. boris says:
    July 5, 2025 at 1:40 pm

    Do not expect miracles from Halo. They got refugees from all flopped Microsoft branded games. Halo team also loves to antagonize the player base.

    Reply
  2. Tachy says:
    July 5, 2025 at 2:22 pm

    I think your missing a key element, streaming.

    The “system” wouldn’t have to support anything new, that’s all done in the cloud.

    Of course you’d probably end up paying more for many games that aren’t included in Xbox Gamepass Ultimate. You’ll pay once to buy the game and again for the subscription to play it. It’s a win win for M$ as they would probably get a percentage of the third party platform sales.

    For gamers who prefer consoles over pc’s, for whatever reason, it actually sounds like a good thing. Sure they’ll end up paying more but they will be getting more too, possibly a lot more.

    I wonder how Sony will react to Xbox owners being able to play the titles they’ve released on steam?

    Personally, I would never buy it simply because you have no control over the hardware or software. I’ll stick with my PC where I can edit things so my single player games don’t require an internet connection.

    Reply
  3. Carl says:
    July 5, 2025 at 2:31 pm

    Micro$oft has put way too much investment into their LLM (“AI” called Copilot) and let everything else lapse…

    This is evidenced by the significant numbers of “Windows Updates” failures and Staff cuts over the last year or so and them pushing Copilot into products where use of Copilot makes zero sense (unless one thinks about their need for “Return Of Investment”)

    Looks like the future of Xbox is being similarly sacrificed

    Reply
    1. boris says:
      July 7, 2025 at 1:23 am

      To be honest, Windows Updates had a ton of failures before Copilot. I do not know if it has gotten worse because of AI, or they just cut on quality control.

      Xbox as separate hardware platform is almost done. At best, the new generation Xbox will be a slightly modified PC. Microsoft main new strategy is to do service streaming (use Xbox as app on TVs) and Xbox branded games on every platform except Xbox.

      Reply

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