Xbox a Black Eye on Microsoft Earnings Report

Microsoft is going strong. They recently had a press release for their FY20 Q2 numbers. Here are some quick stats for those that are curious. Their revenue in Intelligent Cloud increased by 27%. Surface revenue increased 6% Windows OEM increased 18%, and Server products/cloud services increased 30% I digress, everything on the list basically says some type of number big or small with the word increased on it. Except for one. “Xbox content and services decreased by 11% from last year.” That’s just a percentage out of many other percentages. Here is it framed into dollars. Year over year, Xbox content and services decreased $295 million. That’s not a small number folks, even by Microsoft’s standards, I’d bet.

Can Xbox Weather the Storm?

Why does this matter? Well, the decrease isn’t exactly a huge surprise, seeing as how many are likely saving for the release of the new console later this holiday season. That said and although doable, Xbox has a mountain to climb. The gaming industry is growing, rapidly and Xbox has already missed a good chunk of the pie. In 2013 when the PS4 & Xbox One released, according to Geekwire, there were 1.2 billion people playing video games worldwide. In 2019 according to newzoo, it recorded that number reaching 2.5 billion. Between that time frame, no sugar-coating Xbox is losing the console race to Sony. Thus they lost potential new customers. 

Xbox X Series Will Need Exclusives to Win

This isn’t the end all be all, of course. Xbox has a loyal, rabid fanbase, but they need new fans and returning ones to be successful. That’s why the numbers above, combined with their last console release debacle, leave their most recent decision a head-scratcher. A few weeks ago, they reported that the new console wouldn’t have any next-gen exclusives for the first year or two! Look for Sony to take advantage of exclusives, likely even next-gen ones from the get-go. Xbox is building quite the first party team, though, acquiring multiple studios, starting a new one, and having titles like Hellblade 2 in the works. Will this generation be a resurgence? Or will Microsoft take a second look at the direction of their console giant? Only time will tell.

What are your thoughts on Xbox’s sales and not releasing exclusives for a year or two after the new console launch? Let us know in the comments below!