Xbox admits defeat in 'console wars'

Xbox Series X on a cloudy black and white background
Xbox Series X on a cloudy black and white background (Image credit: Future)

What you need to know  

  • Microsoft is aiming to acquire Activision Blizzard for $69 billion. 
  • The Federal Trade Commission hopes to secure a preliminary injunction that would temporarily prevent Microsoft from closing the deal. 
  • In its proposing finding of facts Microsoft claims Xbox has never stopped "losing the console wars." 

The courtroom showdown between the FTC and Microsoft over the tech company's proposed acquisition of Activision Blizzard kicked off this morning. First announced in early 2022, various global regulatory bodies have scrutinized the pending transaction. Xbox has frantically worked to appease their concerns. While addressing its potentially dominant position, Microsoft lamented its third-place position and admitted defeat in the ongoing "console wars."  

Part of Microsoft's current legal strategy is demonstrating the domineering lead PlayStation and Nintendo have established in the gaming industry. Xbox entered the market in 2001, and according to Microsoft's own documentation, their consoles have been outperformed by Nintendo and Sony by a "significant margin." Despite hard-fought success in the Xbox 360 generation and notable financial gain in recent quarters, Xbox claims it's never stopped "losing the console wars."   

As it stands, Xbox is confidently one of the "big three" players in the console market, alongside PlayStation and Nintendo. However, Microsoft states its market share is trailing notably behind the most prominent competition. 

"Xbox's console has consistently ranked third (of three) behind PlayStation and Nintendo in sales. In 2021, Xbox had a share of 16%, while Nintendo and PlayStation had shares of [redacted] and [redacted], respectively. Likewise for console revenues and share of consoles currently in use by gamers ('installed base'), Xbox trails with 21% while PlayStation and Nintendo have shares of [redacted] and [redacted], respectively."

Windows Central's take

(Image credit: Windows Central)

On the surface, it might sound shocking to hear a tech powerhouse like Microsoft confess its shortcomings. The company has aggressively invested in the Xbox brand over the last several decades, and recent endeavors display confident prospects for the gaming division. Legacy audiences and pundits will undoubtedly place substantial weight on Xbox's deficient console performance and their standing in the "console wars," but hardware is only a tiny slice of Xbox's big-picture plans.  

Xbox Game Pass, Xbox Cloud Gaming, and Xbox Play Anywhere have become essential pillars of the brand in recent years. Phil Spencer acknowledged the importance of the console audience in an interview with the Kinda Funny Xcast while also maintaining that the future of Xbox needs to reach beyond the box. So, when it comes to appeasing regulatory concerns, it's in Microsoft's best interest to present data that exhibits its financial standing in an unfavorable light.  

With quotes, comments, and revelations pouring in from courtroom documents and industry leaders, it's safe to say the FTC v Microsoft saga will deliver ample conversation-worthy headlines. Be sure to keep your eyes locked on Windows Central for more breaking coverage. 

Miles Dompier

Miles Dompier is a Freelance Video Producer for Windows Central, focusing on video content for Windows Central Gaming. In addition to writing or producing news, reviews, and gaming guides, Miles delivers fun, community-focused videos for the Windows Central Gaming YouTube channel. Miles also hosts Xbox Chaturdays every Saturday, which serves as the Windows Central Gaming weekly podcast.

  • digitalhigh
    LOL @ "The Console Wars".

    Consoles are an outdated concept that need to die now. They maybe made sense when computers were less ubiquitous and powerful and cloud gaming wasn't a thing, but in 2023, there is literally *no* reason for dedicated gaming consoles to exist any more, at least in their current iteration.

    For example, while you point out that M$ may be "losing" the console war, does that take into account the fact that a large majority of top Xbox titles are also available on PC?

    Or, take the switch. They basically took the same hardware as the Nvidia shield and added a screen and detachable joy-cons, then slapped a custom OS on it. Any Steam Deck owner with the ability to follow a readme can set up Switch emulation in short order.

    Which really just leaves Sony - where I counted appx 37 "exclusive" titles for PS4/PS5 - which I would assume means that the rest of them are available on Xbox and/or PC.

    So...honestly...what even is the point of a bespoke console anymore, let alone "console wars"? Why? To convince people that the only way they can play the latest AAA games is to go out and shell out $300+ for what amounts to a locked-down computer that can only play games and media?

    I've been saying this for a while now, but IMHO, the only thing consoles are good for is causing an unnecessary divide in the gaming community, and making consumers shell out more money for hardware that they don't actually need anymore.

    Get a shield, get any bluetooth-enabled gaming controller, get a free sub to Geforce Now or sign up for Xbox Game pass...and play like 90% of the games on the market without any need for a stupid console.
  • daveP
    Some of us don't wish to shell out tons of money on PC and upgrades. One of my buddies is a PC gamer but says unfortunately he'd have to update his stuff for the new Starfield game which is $$ so he's going to have to wait a while until he can play it and actually IS considering a updated next gen console because it'll be cheaper and then down the road he can update his computer. I'm guessing he hasn't updated it in a few years. I prefer buying console once every 6 years or so and not dealing with all those added expenses so you do you but IMO consoles work for me better and many I know. Like one friend is in the middle of building an awesome computer but spending more than what consoles are worth because PC does offer better experiences. But I'm a casual gamer so eff that noise! Lol and my Switch is a beauty! I take it with me on my flights all the time and that's the other thing, consoles are easier to travel with. Should I be wanting to do that. So yeah, I tried PC gaming personally it was a pain to keep updating shit. But I do UNDERSTAND where you are coming from, like my buddy building his new computer, some are heavy gamers and PC is kick ass! Just for me, it feels a little overwhelming and since I game here and there, usually binge a new game hard for a few weeks then don't touch games for months I don't care for a PC at this time... But never say never.
  • digitalhigh
    I think you're missing the point...

    You don't *need* a beefy gaming rig to play most games. You can quite literally take an incredibly low-power device like a Raspberry pi, install linux+Geforce Now on it, and stream AAA games to your TV or a monitor with minimal effort.

    Traveling? Use an old android tablet, steam deck, or literally any bargain-basement laptop with bluethooth and wifi. Slap GFN or Xbox Game Pass on it, stream all the things. Or for switch games, there's "Yuzu". :P
  • daveP
    I consider pCs more "beefy" I'm not a big time gamer, but my buddy who is and is building a gaming computer said laptops are not meant for heavy gaming.
    So I read this and yea why go through all that trouble? Mostly I'm not bothering downloading third party stuff, no interest in that stuff. I looked at yuzu and no thanks. I'm all for unbox from LP, plug in and done!!! Lol just being honest, I'm not very techy either so yea I did send this to my buddy but he said easier said then done for top AAA titles and massive games like Starfield. I'm sure if it was so easy my buddy whos all about saving money and much more a gamer than me would jump at this!! He said yuzu acted up tons for his buddy so not sure that's a great choice... but he said low quality stuff gets you low quality return. I guess you do what you do but some of us like me will stick with the LP. So yeah, consoles still matter to some of us that don't want to download stuff and jump through hoops tbh it sounds like an android box/fire stick for gaming lol and that always has issues.
  • digitalhigh
    But...I mean...the Switch is quite literally an Android box for gaming.

    Exact same underlying hardware as the Shield.

    Yuzu is on the extreme end of the spectrum in terms of work required, and more an example of how even console-exclusive titles don't actually have to be...

    The Shield comes pre-installed with Geforce Now, so there's absolutely nothing to install. Adding Xbox game pass support is as simple as going into the android app store and installing it.

    And, while I appreciate your extensive reliance on third-party opinions, I have to emphatically argue that in 2023, laptops are perfectly suitable for the services I just described above, and require minimal tech knowledge to install.
  • daveP
    Well, I found playing star wars old republic on my laptop worked well. And I didn't have anything wildly fancy for it. But I don't really PC game so just going off what buddies say. I appreciate you giving additional information and I'll look into it myself more and who knows, maybe one day I'm looking back saying why didn't I do this sooner 🤷‍♂️