Microsoft's Xbox Series X/S Sales Decline By 30% Two Years After Launch

Microsoft Corp. MSFT has reported a 30% decline in revenue from console hardware sales for its Xbox Series X/S, two years after its launch.

The decline in sales occurred despite discounts, such as the temporary $50 price cut to the Series S during the holiday period.

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Xbox content and services revenue saw a modest three percent increase. This included the Game Pass subscription service the tech giant claims is profitable, though its growth in subscriber numbers seems to have plateaued due to a lack of blockbuster releases.

The drop in sales could also be related to the release of major games like Starfield, or disappointing news like the fact that Redfall, an online multiplayer game and Xbox's first-party exclusive title set for release, would not support 60 frames per second.

This disappointing announcement is part of a larger narrative that Xbox is struggling to compete with Sony Group Corp. SONY and failing to offer enough to entice gamers to choose Xbox over PlayStation.

This struggle is reflected in the sales figures, with PlayStation 5 continuing to outsell Xbox Series consoles. PS5 sales in March were up five times compared to the same period last year. Meanwhile, Nintendo ADR's NTDOY Switch saw an 18% decline in sales year-over-year and Xbox Series X|S sales were down by 10%, according to a report by Games Industry Biz.

Despite this, Microsoft's third-quarter revenue increased 7% year-over-year to $52.9 billion, Productivity and Business Processes revenue was up 13% and Intelligent Cloud revenue was up 16% year-over-year, while Personal Computing revenue decreased 9%.

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