Microsoft is accelerating the move away from its Xbox consoles, hoping to boost growth by selling more games on rival consoles.
A report by the Financial Times explained that the company will make a small number of games that were previously offered only on its Xbox console – available on Sony’s PlayStation and Nintendo Switch devices, in a departure from its previous strategy of keeping internally developed games exclusive. On its own devices.
Four months after concluding the $75 billion acquisition of Activision Blizzard, Microsoft also said that the acquired company’s “Call of Duty” game would begin appearing on its Game Pass subscription service next month.
Phil Spencer, CEO of Microsoft Games, said that these moves “are not a change in our core exclusivity strategy” but reflect a desire to expand the audience for some games that have reached their limit on their respective platforms.
Spencer added, in an interview with the Financial Times, that selling content provides higher profit margins than hardware for Microsoft, and that expanding the scope of programs, services and games to more other gaming devices leads to improving overall profitability.
Xbox difficulties
The latest generation of Xbox devices, which were first released in 2020, faces difficulties in confronting the PlayStation 5 and Switch devices.
Some analysts estimate that the PlayStation 5 outsold the Xbox by nearly three to one last year, but the Switch outsold both over its lifetime.
Spencer said that there are more Xbox gamers, referring to those who play its games on personal computers or other devices via cloud streaming, and this is good for the health of the business because the devices that are sold do not represent a source of profit.
Sony announced in December that the PlayStation 5 achieved record sales of 50 million units, but the company nevertheless recently lowered its 2024 forecast for sales of its devices, as a new wave of layoffs hit game developers across the industry in the first weeks of the year. last year.
Analyst Enders estimates that global gaming revenues rose less than 1 percent last year to $184 billion, a rate slower than inflation.
Stable revenue growth
Enders researchers said in a recent report that 2024 is expected to be a “challenging and uncomfortable year across the industry” as “revenue growth is likely to be flat over the next 12 to 24 months.”
Microsoft is among the companies that have cut jobs, saying last month that it would lay off about 1,900 employees, or about 8 percent of its gaming workforce.
Several years ago, the company pushed its subscription service, Game Pass, which is available on Xbox and PC, but not on the PlayStation.
About 34 million people subscribe to Game Pass, which costs $17 a month for full access to the latest games on consoles and PC.
The company is seeing good momentum for subscriptions on PC and cloud services,” Spencer said.
