Microsoft Refutes Reports of Xbox Division Facing Closure Back in 2021

[T0@st]

Microsoft's gaming division faced an uncertain future back in 2021, according to an article published by The Information mid-week. The long-form piece mainly focuses on Xbox's current predicaments, but the wider gaming press picked up on surprising allegations from days past. The story goes that Satya Nadella, Microsoft CEO's, presided over two paths: either keep Xbox Game Studios going, or mothball the whole operation. History shows us that he kept his company's gaming department alive—a series of acquisitions (during and since 2021) have expanded development and publishing operations—but Xbox's journey has been rocky in the ensuing years. Investors and industry analysts believe that Microsoft's $68.7 billion takeover of Activision/Blizzard/King—back in 2023—has not boosted overall revenues to expected levels.

Insider Gaming has managed to make contact with a Microsoft spokesperson—extracted comments have been published in an "exclusive" report. The brand ambassador insisted that Nadella remains resolute about his company being "all in on gaming"—the CEO never entertained the notion of Microsoft winding down "its games business entirely." Industry experts have also criticized Xbox's Game Pass business model—many believe that the service's reach has faltered. The spokesperson commented on these opinions—proposing that engagement on Xbox platforms is "at an all-time high," helped in part by the recent launch of Call of Duty: Black Ops 6. Additionally, Microsoft believes that its audience count is in a healthy spot, with: "well over 500 million monthly players and over the last year, we've seen consistent growth in monthly users on cloud".



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[Sound_Card]

It's really simple and they refuse to understand:

the 360 was successful because they focused on original games, and exclusivity. Every game just about now is multiplatform. Nintendo is successful because their games are only on their console, I mean, imagine if Ninendo ported their games to PC and Playstation because they want to sell the widest audiance possible... their console hardware division would be bankrupt in 5 years. . It's that simple. I have no reason to buy an Xbox (and both the one and series X are fugly as hell), I'll stick with PS5 and still enjoy almost every game Xbox enjoys, and if not, I will just find the PC version.

They are mismanaged and dumb.

 

[Psyclown]

While I doubt Microsoft ever considered completely getting out of the games industry, these rumors don’t just start for no reason and Xbox has been suffering from an identity crisis and serious leadership problems for over a decade now. I’m sure there have been tense conversations about where that part of the company is headed.

 

[TheinsanegamerN]

It's really simple and they refuse to understand:

the 360 was successful because they focused on original games, and exclusivity. Every game just about now is multiplatform. Nintendo is successful because their games are only on their console, I mean, imagine if Ninendo ported their games to PC and Playstation because they want to sell the widest audiance possible... their console hardware division would be bankrupt in 5 years. . It's that simple. I have no reason to buy an Xbox (and both the one and series X are fugly as hell), I'll stick with PS5 and still enjoy almost every game Xbox enjoys, and if not, I will just find the PC version.

They are mismanaged and dumb.

I'mma post a hot take:

The 360 wasnt good. It was an unreliable noisy box that had only a handful of exclusives to sell it, forza, halo, gears of war, crackdown. Most "exclusives" came from third party companies and not MS themselves. Both the PS4 and PS5 have proven you dont need a huge library of exclusives to sell well, console players are NOT PC players, and vice versa.

The xbox, xbox one, and xbox series have all been sales disasters; the OG xbox barely outsold the gamecube FFS. The 360 was a fluke, and short of sony huffing some seriously strong stuff, it's doubtful they will ever see that kind of success again. The ONLY reason the 360 did so well was Sony shot themselves in the foot with a 12 gauge laced with Cobalt-60. The PS3 launch was a massive tactical miscalculation on price and the hardware was so hard to program for most game devs didnt want to do so. So the 360 did way better in the early years, especially during the GFC where Sony had to keep cutting features to stem the bleeding from PS3 sales. Towards the end of the generation, xbox 360 sales started to taper off while the PS3 picked up steam, and ended the generation with 3 million more sales then Xbox, largely thanks to the huge number of first party games.

The xbone should have shown MS they had no idea what they were doing, but they missed that point and now have spent over $70 billion to buy a company that makes 1.5bn a year to try and prop up their failing consoles.

 

[Visible Noise]

It's really simple and they refuse to understand:

the 360 was successful because they focused on original games, and exclusivity. Every game just about now is multiplatform. Nintendo is successful because their games are only on their console, I mean, imagine if Ninendo ported their games to PC and Playstation because they want to sell the widest audiance possible... their console hardware division would be bankrupt in 5 years. . It's that simple. I have no reason to buy an Xbox (and both the one and series X are fugly as hell), I'll stick with PS5 and still enjoy almost every game Xbox enjoys, and if not, I will just find the PC version.

They are mismanaged and dumb.

I‘ll stick with PC and still enjoy games from both PS5 and Xbox. Wink.

 

[HisDivineOrder]

I'mma post a hot take:

The 360 wasnt good. It was an unreliable noisy box that had only a handful of exclusives to sell it, forza, halo, gears of war, crackdown. Most "exclusives" came from third party companies and not MS themselves. Both the PS4 and PS5 have proven you dont need a huge library of exclusives to sell well, console players are NOT PC players, and vice versa.

The xbox, xbox one, and xbox series have all been sales disasters; the OG xbox barely outsold the gamecube FFS. The 360 was a fluke, and short of sony huffing some seriously strong stuff, it's doubtful they will ever see that kind of success again. The ONLY reason the 360 did so well was Sony shot themselves in the foot with a 12 gauge laced with Cobalt-60. The PS3 launch was a massive tactical miscalculation on price and the hardware was so hard to program for most game devs didnt want to do so. So the 360 did way better in the early years, especially during the GFC where Sony had to keep cutting features to stem the bleeding from PS3 sales. Towards the end of the generation, xbox 360 sales started to taper off while the PS3 picked up steam, and ended the generation with 3 million more sales then Xbox, largely thanks to the huge number of first party games.

The xbone should have shown MS they had no idea what they were doing, but they missed that point and now have spent over $70 billion to buy a company that makes 1.5bn a year to try and prop up their failing consoles.

The 360 generation was the one where Microsoft went from having exclusives to shredding all their developers because they figured third parties could stand in for them. Why compete with them when you can just let third parties make the games worth playing? (The answer is because Sony still had a highly productive Naughty Dog back then.) By the end of the generation, they'd decided to ape Wii and chase casuals, which led to Kinect and gave a little preview of all that would be wrong with Xbox One. That the PS3 actually went from a disaster to winning the generation sales should tell you how badly Microsoft handled having an early lead. And that lead didn't even come from Microsoft's superior strategy in the first place.

Sony handed Microsoft the early lead because they threw aside reality and put out a $600 console.

And what did Microsoft take from that? They did everything they could to copy the PS3 launch a generation later but with a worse gimmick than blu-ray playback.

 

[ymdhis]

Xbox hasn't been relevant since the pre-kinect 360 days. Back then it was a monstrous juggernaut outselling Sony. Now they may as well not exist.

Their gamepads were good but there are third party pads now that exceed it in features and quality.

 

[AsRock]

Activision/Blizzard/King—back in 2023—has not boosted overall revenues to expected levels.

Who would of thought, i could of told them that for free that it would not be profitable. The people who made the great games have left already.

 

[kondamin]

It’s a software company, they should drop their console business and just do games.

 

[Gunbound]

Who would of thought, i could of told them that for free that it would not be profitable. The people who made the great games have left already.

this and the people who are left are repeatedly not serving the main demographics of gamers that brings in money. Everyone in there sounds like they drunk the koolaid and keeps making ugly polygons pushing divisive messages poor decisions.

 

[Chaitanya]

MS should close the Xbox division and concentrate on improving their OS and make a striped down version of Windows for gaming.

 

[DaemonForce]

the 360 was successful because they focused on original games, and exclusivity

This explains a lot. I have a 360 and boot it once every other year for arcade. Peggle 2 got me through a time when every day was LOLWORKBAI and my grandfather was on the way out.

Every game just about now is multiplatform. Nintendo is successful because their games are only on their console, I mean, imagine if Ninendo ported their games to PC and Playstation because they want to sell the widest audiance possible... their console hardware division would be bankrupt in 5 years.

Uh, no. Nintendo would never be in the business of porting individual titles. They should know by now that collections are the best carrot just by watching Konami collection sales and others along with some of their own history. Games are the one spot kids aren't stupid but parents are suddenly super rich for ??? reasons. Hella $$$$$$$$ bank whenever releasing anything. I think consoles are a really good solution for instant-on gaming, reliable game capture and that's about it. The Xbox Series S looks great for my needs but you know the moment I jump in, that thing is getting abandoned soon. I picked up the 360 in mid-2015 and it's a miracle that thing still works. Incidentally, most of the enjoyable streams I'm glued to this week are the OLD Famicom titles that are hard as balls. Lots of OG Zelda, (迷宮組曲) Milon's Castle and tons of other stuff that nobody is smart enough to figure out anymore.

MS should close the Xbox division and concentrate on improving their OS and make a striped down version of Windows for gaming.

I think this is a very bad idea. Look at the shitshow they've had going on with Xbox app for the past decade.
The steps required to get any of that single signon garbage to work is absolutely baffling
I have a few Xbox Gamepass keys that just sit and rot in my library. There are reasons I don't use them.
This box is so far gone I want to nuke and start over. I'm still on the fence about including any Xbox presence.

Still, I can't argue against the current vibe that there's a HUUUUUGE power vacuum related to stripping down Windows to be for pure gaming/streaming. I'm seeing a lot of new tools emerge that will hopefully kick the junk kits out forever.

 

[Sound_Card]

I think they should go the opposite direction: Make their vast catalog of games exclusive to xbox for at least a year, and abandon the PC market.

 

[TheinsanegamerN]

I think they should go the opposite direction: Make their vast catalog of games exclusive to xbox for at least a year, and abandon the PC market.

Given how much the PC has grown, compared to console, in sales, this would be a terrible idea.


Their "vast" exclusives these days are basically 3 series. Age of Empires is a PC thing, the rest are on hiatus or are totally MIA.

Halo has been thoroughly dinsey-fied, the community is dead, that wont be enough to hold up a console. Forza has seen great success on PC, Gears of war is a footnote. What else do they have? Crackdown? Will they put CoD in there and cut off 4/5ths of its sales?

 

[Darc Requiem]

I'll say what I've said elsewhere. Gamepass isn't sustainable. Xbox is a comedy of errors.

Phil Spencer's Plan for Xbox Success

• Step 1: Lower the ceiling of Xbox console sales by releasing all their games simultaneously on PC
• Step 2: Take a user base known for buying tons of games and train them not buy games and to sign up for Gamepass
• Step 3: Spend billions of dollars on studios that produced high budget titles, to put on Gamepass
• Step 4: Put their games on Sony and Nintendo platforms in addition to PC to further lower the ceiling of Xbox sales
• Step 5: Devalue their console even further by launching an "Everything's An Xbox" ad campaign
• Step 6: Watch your console sales tank with a surprised Pikachu face.

 

[Sound_Card]

Given how much the PC has grown, compared to console, in sales, this would be a terrible idea.

View attachment 380424View attachment 380425
Their "vast" exclusives these days are basically 3 series. Age of Empires is a PC thing, the rest are on hiatus or are totally MIA.

Halo has been thoroughly dinsey-fied, the community is dead, that wont be enough to hold up a console. Forza has seen great success on PC, Gears of war is a footnote. What else do they have? Crackdown? Will they put CoD in there and cut off 4/5ths of its sales?

PC sales are up at the expense of Xbox sales. Make exclusives, make new games, support the Xbox, and you will soon have a base of customers with software attachment rate of 7 games to one Xbox like you did on the 360. The only people that would be pissed are people that spend a thousand dollars to 2k on graphics cards. They can still make their RTS games on PC ...

I'll say what I've said elsewhere. Gamepass isn't sustainable. Xbox is a comedy of errors.

Phil Spencer's Plan for Xbox Success

• Step 1: Lower the ceiling of Xbox console sales by releasing all their games simultaneously on PC
• Step 2: Take a user base known for buying tons of games and train them not buy games and to sign up for Gamepass
• Step 3: Spend billions of dollars on studios that produced high budget titles, to put on Gamepass
• Step 4: Put their games on Sony and Nintendo platforms in addition to PC to further lower the ceiling of Xbox sales
• Step 5: Devalue their console even further by launching an "Everything's An Xbox" ad campaign
• Step 6: Watch your console sales tank with a surprised Pikachu face.

Bingo. Pure incompetence.

Nintendo and PS2 enjoyed mass success because they are unique gaming experiences with games that defined the consoles. There is no unique experience that Xbox offers. It's just a glorified media box at this point with a borderline mandatory subscription service to function. Go back to the 360 formula minus RRoD. F the PC it's killing you. You have the world's largest IP of games, leverage it.

 

[Lionheart]

It's really simple and they refuse to understand:

the 360 was successful because they focused on original games, and exclusivity. Every game just about now is multiplatform. Nintendo is successful because their games are only on their console, I mean, imagine if Ninendo ported their games to PC and Playstation because they want to sell the widest audiance possible... their console hardware division would be bankrupt in 5 years. . It's that simple. I have no reason to buy an Xbox (and both the one and series X are fugly as hell), I'll stick with PS5 and still enjoy almost every game Xbox enjoys, and if not, I will just find the PC version.

They are mismanaged and dumb.

How the hell is a Series X ugly? It's just a small PC tower.....

 

[TheinsanegamerN]

How the hell is a Series X ugly? It's just a small PC tower.....

It looks like an RGB shoebox. There is no "design" there, and it doesnt fit in at all with most media centers. Sticks out like a sore thumb.

PC sales are up at the expense of Xbox sales. Make exclusives, make new games, support the Xbox, and you will soon have a base of customers with software attachment rate of 7 games to one Xbox like you did on the 360.

The majority of 360 games were not made by MS. They've never had a strong first party lineup. And frankly, after the failures from halo team to deliver anything good, do you really think they can start just pumping out good exclusives like its 2004?

The only people that would be pissed are people that spend a thousand dollars to 2k on graphics cards. They can still make their RTS games on PC ...

I dont think you understand, the PC is now outselling ALL console sales. Not just xbox, but Playstation and Switch as well. All 3 consoles COMBINED produced less in software sales then the PC did. So, lets say Microsoft did what you suggest, and pulled all their PC support. Assuming the Xbox magically went from their pitiful sales currently, to selling as much as the Switch....

Their market would still be less then half the size it is now.

And for what? To prop up a brand that consistently loses money on hardware sales? Short of making a console that sells 300+ million units in 5 years, you'll never see the software sales the PC manages, and that is why "console exclusivity" is a stupid proposition. The consoles lose money per sale, its the software that makes money. Keeping software exclusive only hurts your bottom line.

Only Nintendo bucks this trend, by profiting from hardware sales. Even then, there is a sizeable market they miss, largely because Nintendo is a very traditional company, they dont even understand how to make a proper online service, let alone sell games on PC.

 

[starfals]

It's really simple and they refuse to understand:

the 360 was successful because they focused on original games, and exclusivity. Every game just about now is multiplatform. Nintendo is successful because their games are only on their console, I mean, imagine if Ninendo ported their games to PC and Playstation because they want to sell the widest audiance possible... their console hardware division would be bankrupt in 5 years. . It's that simple. I have no reason to buy an Xbox (and both the one and series X are fugly as hell), I'll stick with PS5 and still enjoy almost every game Xbox enjoys, and if not, I will just find the PC version.

They are mismanaged and dumb.

While ur 100% right, i think it was the right call. They ignored PC gaming for far too long. The fathers of modern PC and OS. It was a big disgrace. They were the laughingstock of everyone for more than 15 years. Yes, putting their games on the PC made the Xbox useless. I dont care. We, PC gamers waited far too long for this moment. Btw, you can say the same thing about PS5. Why buy it? I got GoW Ragnarok, Spider-Man 1 and 2... why even bother? People that want consoles will just get consoles, that's also a fact PC is not for everyone, and its way way more expensive. Not everyone can build 1, i literally just build my first PC after 30 years of being a PC user. It wasn't hard (for me, but it is for everyone that i know), but it took awhile.. and bios settings, compatibility issues and stuff. It took research. People just wanna buy and forget under 500 bucks. GL gaming on a 500 bucks PC. That's total trash.

 

[Sound_Card]

Nintendo is successful because they marriage their IP with their hardware. I don't know why that is hard to understand. If they ported their games to PC, they would fade into obscurity like SEGA in less than a decade. Both of you think that a larger market must mean more sales, but you are not thinking about the entire picture, ironically. That is actually not what would happen and that is not what IS happening.

-10,000 customers could mean 10 million in more revenue.

Sony is no different right now with the PS5. They are porting their games over to PC, but they are actually hurting because of it.

 

[DaemonForce]

GL gaming on a 500 bucks PC. That's total trash.

Close enough to my 2019 Ryzen build with the same CPU. Took maybe 5min.
I think it's okay if you want to be a waste of space, that's okay with me.
But this isn't the way to do it. I've seen others game (and stream) on much worse.
This system was enough to keep me on 1080p144 and VR until 3rd gen RTX and the Quest killed them.

My point is one attempt does not make you a builder. Your research will eat DAYS just sorting things out on one system.
A $500ish system doesn't meet a $500 upgrade. Every one of us knows that and it's how most gamers operate.
Many of us also have more than one system. You can be MIA from building for 30 years. I was out 10 years until Ryzen.
You pick a platform, piecemeal and change out one component for later. That's how this works. We can't do that to consoles and wouldn't try.
Consoles democratize access to gaming, which isn't a PC problem anymore.
If the companies behind these consoles add features that appeal to gamers, that's less trouble in the PC space.
Instead that's not happening and it's causing a weird encroachment on the way we evaluate hardware against games.

 

[Vayra86]

I think they should go the opposite direction: Make their vast catalog of games exclusive to xbox for at least a year, and abandon the PC market.

It really comes down to this simple fact:

The PC is the best gaming device.

Commerce has tried really hard, with sabotage, walled gardens, services, marketing to make consoles beat the PC, or make them look like they are. How many times have we not said to each other 'this is the death of the PC'? Game streaming... P2W.... cheat-heaven... expensive hardware... shitty Windows... it is all attributed to the bad bad PC and its wild west of developers and games.

But that is really its strength. The PC is vibrant as a platform, innovative, will always surpass consoles in one way or another simply because it constantly evolves and it does so way faster than a few companies can update their walled gardens - the PC is powered by the same community that powers the internet: everyone. Good luck fighting that... its folly.

Consoles moving to x86 was the first nail in the coffin for Sony and MS trying to keep hold of their fortresses. Sony learned the hard way its way too expensive to do anything else. Then came the demand for cross play, and how both companies saw themselves forced to accomodate in one way or another. In the meantime... on the PC platform... Epic started delivering so much free content and opened up the digital distribution market further than what Steam had already offered us. Now, all bets were off: content overload. You don't even know WHAT to play first these days... there is an overabundance of choice. Why, now, would you force yourself into a walled territory when the very same stuff can be had elsewhere, cheaper, or even free?

The next step is the democratization of gaming itself. Already, engines have lowered the barrier of entry to develop something. AI will make it go down further. We won't see bucket loads of great games come from this... but it WILL again solidify the PC as the go-to-innovative gaming machine. You have a PC, or you are just a lowly content consumer that has no options. The absolute bottom of the gaming ladder, that, where you overpay and get undercooked crap laced with predatory business models, or you pay yet again to get ancient game XYZ on your new device. The PC is the only platform that offers options to try (that) content for free.

Consoles will also remain, but its clear their unique selling points are dwindling fast, and barely even exist at this point. Really the ONLY USP consoles will be able to guard, and even that is questionable at this point given the accessibility and 'install and play' nature of the PC nowadays... is the plug and play illusion. But consoles are firmware and game-update dependent much the same. There's barely a technical difference, and the practical difference is you click a few more times on an install button. But that is the same process people go through to use ANY technology these days. The PC is not the unicorn here. Any phone requires you to do the same thing, all the time, as you shop for new apps.

I really don't care what console makers do. Enjoy screwing around in the margins, it ain't gonna do jack shit. The devices are subpar to a platform that constantly strives to chase the cutting edge, and is community powered, but at the same time covers everything before it, with full backwards compatibility. Now that content is getting remade because people are out of good ideas, this reality starts to sink in with people: content is content, and its age is not really that relevant, it just needs to be fun.

 

[chrcoluk]

Game variety has nosedived.

We have an over supply of MMO's, online Shooters, GAAS, and dark soul/DMC type clones.
Under supply of platformers, puzzle, story based games, traditional RPG style games.

What do Microsoft do? they buy a game company that is primarily about shooters and GAAS. Not only did they buy it, they brought it for obscene amounts of money.

Xbox 360.

Fable games. (they closed the studio, morons)
JRPG's funded by Microsoft.
Their arcade collection, including loads of indie platformers etc.
Loads more games released per year, vs less releases with blockbuster budgets.

I brought my xbox series S so I can play 360 classics on newer CPU hardware. That says it all really. Xbox one didnt interest me at all.

Sony have a similar issue, but they have a stronger brand (at least in the UK) which seems to be carrying them, but the games library for PS5 is a joke. Both vendors carried really by backwards compat, its saved them. They wasted huge sums on a fortnite clone. Idiots. Think of how many single player RPGs, platformers etc could have been out of that budget. Wouldnt surprise me if we find out one day 60% of Sony revenues during PS5 era is people buying replacements for broken controllers.

 

[Acuity]

It's really simple and they refuse to understand:

the 360 was successful because they focused on original games, and exclusivity. Every game just about now is multiplatform. Nintendo is successful because their games are only on their console, I mean, imagine if Ninendo ported their games to PC and Playstation because they want to sell the widest audiance possible... their console hardware division would be bankrupt in 5 years. . It's that simple. I have no reason to buy an Xbox (and both the one and series X are fugly as hell), I'll stick with PS5 and still enjoy almost every game Xbox enjoys, and if not, I will just find the PC version.

They are mismanaged and dumb.

What you say is true, but the world has changed and today it is no longer possible to support an exclusive video game because it costs too much to create them.
Nintendo manages to maintain exclusives because its games are made with a small budget compared to the triple A xbox and playstation, that's why we have seen exclusives disappear in recent years.

 

[Neo_Morpheus]

Personally, I prefer the Xbox to the PlayStation.

Really enjoyed the 360, even though had to RMA it 3 times.

Even though the design of the Series X is generic, its very smart design for thermals and in my eyes, more elegant that the PS5.

I like the PC and Xbox releases.

That said, they keep making stupid mistakes after stupid mistakes.

1- Cut the price of the Series X.
2- Same for the Series S, but maybe just cancel that one, people don't appreciate what they tried to do with it.
3- I hate exclusives, but its a given to survive so release on Xbox first, wait a couple of months, then PC. To hell with Sony and Nintendo releases.
4- Gamepass is nice, but its not good for everyone and the prices are creeping up quickly to a point where its not a good value for everyone.


One more thing, people need to remember that they were forced to distribute some games on PS and Nintendo, in order to be allowed to buy Activision.

About the console vs PC, listen, not everyone has the time, knowledge or desire to make a gaming PC.

My gaming PC was way harder to configure, build, etc than my Series X. Not to mention, everything simply worked on the Series X.

After a whole day fighting computers, servers, people, etc, I simply want to pick up the controller and play, no deal with more BS. Must admit, when my gaming PC was running ChimeraOS, that thing was as trouble free as my Series X.

Also, normally, consoles always have a price advantage over PC when they are launched.

PS I already sold my Series X because MS convoluted communication and other reasons.