The last 24 hours have not been pretty for Xbox. Beyond the blockade of the CMA to the purchase of Activision, now we must add the most recent tax report from Microsoft. Those of Redmond announced that Xbox Series X|S sales plummeted 30% in the past quarter.
“Xbox hardware sales revenue was down 30% compared to the prior year, which benefited from increased console supply.”
The figure, of course, is surprising, especially since it has nothing to do, according to Microsoft, with the scarcity of launches that the Xbox brand has had in the last year and a half. The company ensures that The main cause of this situation is still linked to problems in the supply chain.
Although the technology sector began to recover late last year from component shortages, some companies, including Microsoft, are still not seeing the light at the end of the tunnel. The Xbox Series X and Series S, and especially the first one, are not selling well because they have not even managed to meet the demand in various territories of the world.
The panorama contrasts significantly with that of its main rival. Sony has been reporting record numbers for the PS5which has already surpassed the sales rate of the PlayStation 4. The Japanese claim that stock problems are a thing of the past and, for months, their hardware can already be found in stores around the world.
Now, although the Xbox hardware is not going through its best moment, we cannot say the same about the services. This division, which includes proposals such as Xbox Game Pass and Xbox Cloud Gaming, grew 3% year-on-year during the third quarter. From Microsoft they mention that their game subscription continues to be the great driver of growth.
These data, without a doubt, are excellent news for Xbox, since the absence of an exclusive AAA title in 18 months has not had too much of a negative impact; at least in economic terms. Not so in image, since the platform has been widely criticized for going unnoticed in terms of launches first party it means. If no more obstacles arise in the way, the drought will come to an end with the arrival of Starfield next September.
CMA puts brakes on Xbox’s ambitious strategy
This Wednesday, the CMA, the UK regulatory body, announced that will block the purchase of Activision Blizzard King by Microsoft. It was a move that few to no one expected, since in recent days various financial media, including the Financial Timesassured that the approval was imminent.
According to the CMA, its ban is not grounded in concerns surrounding the fate of call of dutybut to the dominance that Microsoft has in the sector of the Cloud Gaming, considered the future of video games. The death of Stadia, coupled with the slow growth of Nvidia GeForce Now, Amazon Luna and PlayStation Plus, leave Xbox Cloud Gaming as the best standing for the future.
“The deal would strengthen Microsoft’s advantage in the market by giving it control over important gaming content like call of duty, Overwatch and world of warcraft. The evidence available to the CMA indicates that, absent the merger, Activision would begin offering games via cloud platforms in the foreseeable future.”
Despite all, Microsoft and Activision plan to appeal the decision. The problem is that a new review process could have updated determination until 2024…