Once a giant, Xbox faces tough challenges that may redefine its future
Seattle: The gaming landscape shifted dramatically in 2025, a year that many will underline as the beginning of an existential crisis for Xbox. After its underwhelming launch during a pandemic-riddled 2020, the Xbox Series X lost steam to Sony’s PlayStation 5. Microsoft failed to provide the sought-after games that keep gamers engaged, despite their notable acquisitions. Meanwhile, Sony capitalized on the loyal fanbase cultivated by the PS4 and released highly anticipated titles that drew gamers in. As prices for gaming consoles soared due to global supply chain issues, buying an Xbox became less enticing, even for budget options like the Series S.
In 2025, Xbox found itself floundering, seemingly without a plan. With the cancellation of promising titles such as the Perfect Dark reboot and Everwild, gamers were left with a thin lineup of future releases. Even worse, Microsoft jumped on the price-hiking bandwagon, stating the Series S would now cost $400, and its more powerful sibling, the Series X, sat at an eye-watering $600. In light of such pricing, retailers like Costco chose to stop selling Xbox consoles altogether. Why bother marketing a product no one wants?
Game Pass once touted as the best deal in gaming, saw a drastic price increase, nearly doubling to $30 per month. Sure, Microsoft attempted to add more enticing content, even revamping its cloud streaming service, but without must-have exclusive titles, Xbox lost its appeal. One might wonder about the future of games like Avowed, as many potential hits are now rumored to make their way to other consoles like the PS5.
Trying to shift the narrative, Microsoft launched the ASUS ROG Xbox Ally and Ally X handhelds, but their pricing—$600 and $1,000—virtually alienated average gamers. Coupled with issues like Windows optimization for portable play, these devices didn’t hit the mark. Competing against other established handheld consoles such as the Steam Deck, priced starting at $549, became a challenging uphill battle.
Speaking of the Steam Deck, Valve’s newly revealed Steam Machine created more buzz than excitement surrounding Xbox. This device operates similarly to a gaming desktop optimized to run Steam OS, allowing flexibility that Xbox simply doesn’t offer. It gives users the freedom to install anything—including Windows! That’s a significant draw for gamers seeking alternatives.
Reflecting on past successes, the Xbox 360 held its ground against the PlayStation 3, notching achievements with features like Xbox Live and solid online support. In stark contrast, the Xbox One era tarnished Microsoft’s reputation—initially marketed as an “always online” system with stringent DRM. These missteps lost the company the backing of likely supporters, paving the way for Sony to dominate with stellar sales figures for the PS4.
Fast forward to now, and the numbers tell a troubling story. Estimates suggest only around 33 million Xbox Series S and X consoles were sold by July, compared to Sony’s impressive 84.2 million PS5 units. Such statistics indicate a grim outlook; if this trend persists, the competition could see Sony selling three times as many consoles during this generation.
Recognizing this challenge, Microsoft may rethink its strategy. Collaboration with AMD could signal a pivot towards a PC-based model, enabling an Xbox that caters to a different gaming demographic. Why restrict themselves to traditional console battles? With new games going to PC right after their release, the lines are certainly blurring. Such a transformation could breathe life back into the Xbox brand, marking a distinct turn that would be challenging for Sony to replicate.