The Decline of Xbox Consoles in the Gaming Ecosystem: Microsoft’s Pricing and Strategy Developments

2024-07-16 15:43:55

Microsoft’s pricing and strategy developments are making Xbox consoles less and less interesting in the Xbox ecosystem. It must be a shame, as the players concerned, fierce fans of the brand, have been pampered by the manufacturer.

Source: Xbox

Imagine a console manufacturer that puts its machine after other people’s machine? Hard to build loyalty with such a strategy. However, the latest developments from Microsoft, especially regarding Xbox Game Pass, point in this direction.

Don’t reward your followers

• Offer A: 11.99 euros per month, a catalog of more than 100 games, including new Microsoft releases as soon as they are launched, access to the EA Play catalog;
• Offer B: 14.99 euros per month, catalog of more than 100 games, no guarantee of new Microsoft releases.

Tell us, which offer is most interesting to you? In our opinion, this is an A offer, which is cheaper, offers more content (EA Play) and games as soon as they are launched in the catalog.

Source: Microsoft

Microsoft offers both of these offerings. The first, and the most interesting, is for PC gamers. Behind the latter is the new Xbox Game Pass Standard offering. Note that we have omitted Xbox Live integration from offer B, the multiplayer gaming service on the Xbox console that was presented as a strong point of the offer by Microsoft in its communications. Intentionally forgetting of course, Xbox Live to be completely free to access on PC, with or without a subscription to PC Game Pass.

In other words, if you are a customer committed to the Xbox ecosystem until a dedicated Microsoft console is purchased, you have access to a less attractive offer than on PC.

The impact of competition

So why does Microsoft offer a better deal on PC than on its own consoles? This strangeness is not new. In fact, since the beginning of the Xbox Series generation in 2020, Microsoft continues to ask its console players to play a subscription online, and the same operation is completely free on a computer.

The reason is simple, the Windows ecosystem on PC is open to competition and Microsoft is even in a weak position compared to Steam. The company has to compete with Steam, Epic Games, GOG and even Ubisoft and EA Play with its own Microsoft Store and PC Game Pass. Since online gaming is free with all competitors, there is no reason why Microsoft would charge for it.

On a console, Microsoft has full control over its machine and does not currently authorize other stores. Xbox consoles are sold at a very low margin, while Microsoft does not sell them at a loss. The firm therefore wants to make its investment profitable by paying the end user after purchasing the console. This is the model for consumables such as razor blades or ink cartridges for printers.

Here we clearly see the potential impact of competition on a market to bias in favor of the consumer. This is the whole point of regulations like the DMA in Europe which aims to open application stores to competition on mobile.

The situation is getting worse for Xbox consoles

Earlier this year, we explained how Microsoft’s record takeover of Activision Blizzard might affect the future of the console. It is clear that we continue to move forward on this path. After rumors of the end of Xbox sales in Europe, and smaller and smaller sales figures compared to PlayStation and Nintendo, we now fear that the developer’s commitment will decrease.

Recently, the studio Embark, behind the multiplayer game The Finals, postponed the deployment of patch 3.4 of the game on Xbox consoles, but not on PC and PlayStation 5. Of course the studio apologized to the affected players, but it is also a sign that this deal is not a lower priority for publishers. Also recently, the Dawntrail expansion was released for Game Final Fantasy XIV along with some bugs on Xbox, but not on other platforms. Because the installed base of Xbox consoles is much lower than other ecosystems, developers are less interested in investing a large budget to monitor Xbox games.

Microsoft itself now announces that some of its games like it Doom of the Dark Ages released at the same time on Xbox and PlayStation 5 consoles. emblems of its gaming ecosystem.