- Microsoft has been focusing on making Xbox a subscription-based business for a while.
- Because of this focus, hardware revenue has taken a hit, and it accounted for just 13% of total revenue last fiscal year.
- In comparison, Nintendo and PlayStation’s hardware had a much larger share in the overall earnings.
Microsoft has made it clear that the main focus of Xbox isn’t selling hardware now. While the hardware being sold would ultimately help the giant, it has become a secondary objective.
The CFO previously made it pretty clear that the company aims to focus on a subscription-based business. However, due to this sole focus, Xbox’s position in the hardware market has taken a hit. Hardware sales made just 13% of Microsoft’s gaming earnings last year.
Why it matters: Console hardware is less important than it used to be 10-15 years ago. However, Xbox’s figures are the most concerning when compared to the other two console manufacturers.
As reported by TweakTown, PlayStation’s hardware made 27% of the annual revenue, and Nintendo’s hardware accounted for a whopping 44%. On the other hand, Xbox’s hardware made just 13% of Microsoft’s overall gaming earnings this year.
Xbox hardware made $2.872 billion, while other parts of the business, like content and services, made $18.653 billion, which would equate to 87% of the total annual revenue of the giant. While this was expected, the difference has grown drastically in a short amount of time.
Nintendo is currently in the strongest position when it comes to hardware sales. Despite having the weakest hardware of the bunch, the company continues to rely on console sales for nearly half of all revenue.
As for Xbox, the gaming giant has not found its footing in the console department since the Xbox 360.
Things went south when the Xbox One was released. While the Xbox Series S|X showed promise, the consoles didn’t live up to their full potential this generation. Ultimately, the gaming giant might finish this generation in a worse position than the last.
Despite the position of Xbox’s current hardware, Microsoft is still not abandoning the hardware market altogether. It has been confirmed that a next-generation console is already being developed.
Rumors also point to a handheld for the next generation. Perhaps these moves will help Xbox reclaim some lost market share.
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[News Editor]
Obaid is pursuing a Law degree while working as a content writer. He has worked as a gaming writer for over three years because of his passion for the medium and reporting the latest updates in the industry. Having played hundreds of games, Obaid finds himself coming back to Elden Ring, Cyberpunk 2077, and Red Dead Redemption 2, with these games being among his favorites. He has also been mentioned on highly regarded websites, such as Wccftech, Metro UK, PS Lifestyle, GamePressure, VGC, and Gamespot.
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