I saw videos in my recommended section on YouTube about how a console crash is happening and I thought…sure. Clickbait. But it seems it really is that bad huh.
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It’s going to get more and more difficult to spin this as “only an Xbox problem.” But IGN and Eurogamer are going to try their best!
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Alarm bells really should’ve gone off a long time ago. Like I’m not financial analyst, but I’d say it’s pretty bad when 1) no console has ever surpassed 200 million unit sales in a lifetime and 2) individual consoles have only been selling less on average ever since the peak of the PS2 like two decades ago now. I never thought console hardware was in a safe position with the rising prices and strained economy. But it feels like people in the industry live in a bit of bubble. Like they only judge success and failure based on how sales compare to competitors… but that’s not really how you judge the health of a market. No one ever really talks about how the PS4 sold over 30m less than the PS2 and only like 17m more than the PS1. The PS5 is similarly on track to do not that much more than 100 million, but it’s all fantastic as long as they outsell Xbox. There’s always been an insane lack of growth in the console market.
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https://x.com/chris_dring/status/2001949895402623407?s=46&t=O_AGT9SEnlptKOF_2SxtqQ
BF6 wins the battle (sales) but not the war (longevity).
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Notable here that even live service games like Fortnite saw a drop; I guess with the times people might not be wanting to play games as much?
This writing has been on the wall for a while (arguably part of the reason why Microsoft has been de-emphasizing hardware in favor of services). But with RAM prices skyrocketing it’s like the industry got tired of waiting and decided to speedrun its own apocalypse.
Next gen is going to be a really rocky ride. At least on the Xbox side we know what to expect: console hardware is now an expensive niche product for the hardcore.
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Everything is in decline and Xbox, being the weakest, got hit first and the hardest, and obviously not having moved their manufacturing out of china hit them even harder as they couldn’t keep prices in line with the competition.
I wonder how much the ram issue will affect the upcoming gen or if everything stays the course and launches but at a much higher price than anticipated? Like if the ge needs to be extended due to ram shortages and price, the need to keep retail channels full and figure outs way to sell as much as they can while they extend the duration of the Series lifespans. Or cloud really takes off and is their “told you so” moment.
Either way, we live in uncertain times. Even I think I’ll delay my next PC purchase even further down the line and just keep lowering the settings if I have to. Kinda regret waiting for AM6 now but it is what it is!
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What’s interesting is to bounce this up against the Matthew Bell analysis, showing that all of the growth in Gen 7 and Gen 8 were because of Nintendo.
That suggests that all of the spikes in the Circana data were Nintendo, not the HD consoles.
And that is why it is completely bonkers to make a console-centric business these days. Even if Xbox somehow managed to trip up Playstation, the HD console market hasn’t grown in ages. There is no indication that will ever change. People are moving towards their PC and mobile devices.
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One guy I follow feels that Xbox and PS should delay the next gen console because of this situation. If anything, I think Xbox wants to go to next gen while PS probably wants to for sake of money if that makes sense.
360 gen really was an outliser for MS, guessing this gen is probably closer to gen 6 in terms of ratio with Nintendo being bigger than it was back then.
Companies definitely will start feeling the squeeze though. MS is well positioned at least to pick up some of the slack in the PC space, but gen Z and A will be the ones that’ll be hard to target as those are all on Roblox and Fortnite, although I guess Minecraft is also a saving point for MS.
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Such a cool chart. think data is legit? Seems reasonable to me. This makes the idea of getting your store/ecosystem on other devices seem obvious.
I think this also disproves the notion that nintendo is a pipeline to the HD boxes. As in, a child gets a nintendo when they are 10, then gets a ps/xbox when they get older like in high school.
Chart also surprises me in that after last gen, ps/xbox didn’t get a handheld out for this current gen. I would think they would want some of that red in the last bar.
Can cloud be a disrupter to this trend? time will tell.
This is a good point. If xbox decides to delay next gen by a year or two, it doesn’t shut down their transition strategy into PC. That part of the strategy can continue on regardless of new boxes being developed.
And if you ask me, take all the time necessary to get the next box/ecosystem right. If component pricing is now a second hurdle to jump, just wait it out. What’s the difference. They have their 50M customers right now. Releasing what they can on competitors boxes and pc. There really is no rush.
I guess you could argue launching before PS could give them an edge, but I honestly believe xbox doesn’t really care what ps does or doesn’t do anymore. As long as they continue selling millions of copies of cod/mc/F horizon on ps’s boxes, xbox is all good.
Yes, data is good. Matthew Bell is legit.
Microsoft went hard on cloud as the growth avenue, which technically was a mobile focus. You can go back to interviews with Phil Spencer in 2018/2019 talking about reaching billions of gamers with cloud gaming. And he also said he didn’t see Playstation and Nintendo as competition because he didn’t want to fight them while Google and Amazon figure out how to reach billions of gamers.
I think eventually they’ll be right, but it’s probably still a ways out.
You can read that chart a couple of ways mind.
Had the Xbox console kept pace with the sales of its 360 (80 million units), then overall combined console sales would still be very good. It’s the sales collapse of Xbox console hardware that’s really let the sales down for console sales overall
People use sales data far too much anways. Its net profit which is far more important and will tell you how healthy the industry is. Feel the real issue for the gaming industry is not console hardware sales but how long and how much money games cost and take to make
They’re just taking too long to make and costing far too much money. Its getting on for 6 years since Naughty Dog last game and they’ve let to release anything It is getting silly now
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Another issue is graphical diminishing returns. It’s a perfect storm where 6k pixels looks so much better than 600, but then the gap visually between let’s say 60k and 600k looks like a far lesser jump. So when people look at games advertised for these systems they don’t really stand out as absolute must buys. Arguably for example Red Dead 2 on the PS4 looks as good as many current gen releases (especially in terms of attention to detail and character animations).
I think next gen is going to struggle immensely with that fact tbh, i.e. trying to advertise a visual leap when you need to often grab a magnifying glass to spot the difference (case in point: base PS5 versus PS5 Pro) means they’ll be selling to the enthusiast crowd who do care about the tech whilst casuals will look at the visuals on display, look at the price tag of the box and think “meh”. This will be especially true if the cross-gen period lasts a very long time. And we have no reason to suspect it won’t.
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I feel there are a lot of games that look better than RD2, but that game had a budget and team size that not many games could match. You make a good point about how it’s getting harder to see clear visual leaps
Games are taking too long to make and many studios have yet to make a native game this gen which is 5 years old. I don’t see how it’s sustainable to have your major studios basically only able to make one game for each console generation, which seems to be where we are going for major studios like Halo Studios, Naughty Dog, The Coalition or like for RARE no new game at all coming any time soon but yet you still pay the staff their wages
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Rather than hardware sales, I think the number of users are the problem. The games that cost more to make and take longer to make are traditionally only consistently available on the latest Xbox & PS console and midrange or better gaming PCs. If there aren’t new console users then the potential customers these games can sell to aren’t growing and that cost can’t be spread. Now an easy solve is just to… not chase these insane big budget games and focus on releasing on more platforms (I think the Xbox One/PS4 Gen is good enough that there’s nothing wrong with releasing games built for last gen that are also just optimized for this Gen, that also gives stable access to the switch 2). However, there’s still a big issue with game saturation. With as many games as there are now and forever games like fortnite, I think it’ll be really important for the gaming industry to continue reaching new gamers somehow. Be it through a revamped console market, cloud gaming, more accessible PC, AA or even AAA games running natively on mobile hardware (like the iPhone showed off), or really ideally all of the above. Actually heck, gaming has a similar problem right now as to Japan. Japan’s super aging population affects everything, especially the economy. It’s the same for gaming. Xbox is really trying hard to tap into that 2 billion + mobile gaming population and pull them in through game pass and cloud gaming. It’s really for the best of everyone that they succeed and Nintendo and Sony and every platform in the industry should be doing the same. Yes, even Nintendo because while they’re doing exceedingly well ultimately the lack of growing consumers is a huge issue for long term sustainability.
The Xbox and PlayStation go after the same audience. They’ve been called the HD twins for a reason. The only way Xbox wins is if PlayStation trips up, which is what happened in the 360/PS3 generation.
There’s a reason Nintendo veered off onto its own path after the GameCube. Nintendo knew they had to differentiate and that pushing graphical boundaries was not it.
That’s why Nintendo always seem to do well despite the PS outselling the N64 by a massive margin many of Nintendo’s N64 games sold better and in huge numbers. That’s why I don’t really go on sales but rather how much net profit the gaming side is making
Screens aren’t the problem, the high cost of making games and the high cost of buying games at retail are the bigger issues imo
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PS3 didn’t really trip up that much it sold in huge numbers its systems like One and Series X that failed to deliver on sales. Not that I see that as a problem myself would imagine the Series X and especially the One were far more profitable for Xbox with no RRoD and very active digital community buying games or gamepass.