For several months, the figures have been unequivocal: sales of Xbox Series X and Series S consoles have shown a notable decline in the American market. According to the latest data published by the analysis firm Circana, annual sales of the Xbox Series fell again compared to the previous year in the United States. A trend that contrasts sharply with the performance of the competition, notably Sony with its PS5 which continues to dominate the market.
Xbox Series sales falling in the United States: a trend that is confirmed
The reasons for this decline seem multiple. First of all, the novelty effect of consoles launched in 2020 has worn off, and consumers are no longer rushing to the shelves as much. Then, Microsoft’s strategy, relying heavily on the Xbox Game Pass economic model, could have influenced purchasing habits. With an attractive offer of subscription games, the interest in acquiring a latest generation console is sometimes reduced for some players, especially in an uncertain economic context.
However, this situation is not new. The first signs of slowing down have been noticeable for months, with periods of weak growth during key events like Black Friday or the end-of-year holidays. In 2024, the numbers have only confirmed this dynamic for Xbox.
Spending on video game hardware in November was flat from a year earlier at $927 million. The 15% growth in spending for PlayStation 5 was offset by a 29% year-over-year drop in spending for Xbox Series and a 3% drop for Switch.
Mat Piscatella – Circana
If PlayStation generates 15% additional revenue with its PS5s while Xbox records a decline of -29%, there is no doubt that the launch of the PS5 Pro had an impact here since the new console alone represents 19% of revenues. PS5 sales and 28% of revenue. For comparison, this is 50% more revenue generated compared to the launch month of the PlayStation 4 Pro, which had -12% fewer sales at the same time. We can therefore say that the PS5 Pro does better than the PS4 Pro in its time.
Microsoft assumes its strategy
In reality, Microsoft has been discussing this trend of declining sales of its Xbox consoles for months in its financial reports. Last April, Amy Hood, Microsoft’s chief financial officer, indicated that the company expected a further decline in revenue related to Xbox hardware in the future, so the figures are not surprising.
Despite this sluggish performance, Microsoft does not seem to be overly alarmed. Not only was it expected, but the brand made very little effort to sell its machines. This is evidenced by the holiday and Black Friday period during which promotions on the Xbox Series In France, the Xbox Series For its part, Sony has multiplied the advantageous promotions for the PS5 which could be found around €400 during the same period, i.e. €100 less than at Xbox.
Microsoft’s current strategy is oriented more towards services and software than towards the massive sale of consoles. As evidenced by the strategic adjustments in recent months, the sale of games and services brings in much more than the margin made on consoles. And if Xbox releases more and more games on PS5, who would need to buy an Xbox eventually?
This approach reflects a paradigm shift in the video game industry. While Sony and Nintendo remain heavily focused on the performance of their respective machines, Microsoft is betting on a model where the console becomes a secondary element of a broader ecosystem. By diversifying its sources of revenue and aiming for maximum accessibility, Microsoft seeks to reach a wider audience, even if it means sacrificing part of its historic fanbase.
Although this drop in sales can be seen as a setback, it is ultimately part of a broader vision where the console is no longer the only gateway to video games. It remains to be seen whether this strategic bet will bear fruit in the years to come.
