Xbox Hardware Sales Going Down is Actually Good News for Phil Spencer

You’ll be shocked to know, but it’s been more than four years since the release of ninth-generation consoles, Xbox Series S/X and PlayStation 5. Many thought that Microsoft would outright win this generation due to the fact that the Xbox Series X was the most powerful out of all consoles.

Despite the console packing a punch, it hasn’t translated in terms of purchases. Microsoft has confirmed that Xbox hardware sales are going down. However, that’s good news for Microsoft Gaming CEO Phil Spencer, and his agenda is to end the console wars and unite all gamers.

Xbox hardware sales have reached a new rock bottom

Microsoft has recently dropped its Q2FY25 results, and there are some interesting figures, especially for its gaming side of things. According to the official data, Xbox has managed to earn $6.581 billion throughout the Holiday 2024 quarter, and that’s primarily due to microtransactions, game sales, and subscriptions.

The Xbox hardware has only contributed 15% of the total revenues, or about $1.01 billion in this figure. This means that FY25 saw another all-time low for Microsoft’s gaming hardware revenues in the last decade, second only to the $815-$830 million that was back in the Holiday 2019 quarter.

You might think that this news will ring alarm bells for Phil Spencer and the gaming division, but that’s not the case. Let’s not forget the fact that Xbox hardware is basically produced and sold to consumers at a loss. So, if fewer hardware sales are happening and less revenue is generated, that means fewer units are being pushed out at a loss.

That’s not all, though; we know that Spencer has been pushing hard for Game Pass, convincing Microsoft to buy every gaming company under the sun. Microsoft has revealed that Game Pass PC grew by 30% last quarter and set a brand-new quarterly revenue record for the company.

Alongside stronger Game Pass services, Xbox’s Cloud Gaming side has lodged more than 140 million hours of streaming, helping the content and service venue grow by 2%. With Game Pass enjoying growth and a healthy number of subscribers, it seems like Xbox hardware sales aren’t really a matter of concern for Microsoft anymore.

Phil Spencer’s plans for first-party Xbox games

Last year, we saw a bunch of first-party Xbox games making their way to PlayStation 5, including Sea of Thieves, Grounded, Pentiment, and Hi-Fi Rush. Microsoft has confirmed that Indiana Jones and the Great Circle, Doom: The Dark Ages, and many others will also be arriving on PlayStation soon.

Rumors suggest that even big franchises such as Halo and Gears could be taking the multi-platform approach in 2025. While Xbox fans might be disappointed with all these PlayStation ports, Spencer believes it’s a good thing.

While chatting with Gamertag Radio, Spencer supported Xbox’s multi-platform push, stating that the brand doesn’t like to put walls up for gamers who want to experience quality first-party games on rival platforms.

Spencer states that every creator wants to craft a game that reaches everyone. With Nintendo and PlayStation still following the route of console exclusivity, Spencer wants to break the trend by allowing gamers to experience titles in different forms, such as handheld systems, cloud, PC, and mobile phones.

Spencer’s comments confirm Microsoft is going all in on the breaking console exclusivity. Only time will tell what this means for the brand’s next-generation hardware, which is rumored to drop sometime in 2026.

With that said, do you think Xbox hardware has a future going forward? Let us know in the comments below.