Xbox Series X 5th anniversary: a great console until Microsoft lost interest

The irony is that this fate has befallen Xbox on the heels of what might be its best console hardware ever — or at least since the ugly but impressively specced beast that launched Microsoft’s console initiative in November 2001. The title ought to belong to Xbox 360, with transformative online features that were undoubtedly the high point for the brand. But that console’s disastrous failure rate due to poor heat management, which led to the infamous “red ring of death” error, disqualifies it. And the less said about the misbegotten Xbox One, and its hastily abandoned ambitions to be a multimedia set-top box, the better.

Considered in isolation, the Xbox Series X and S are great machines. Delivering on the promise of the Xbox One X mid-generation upgrade, Microsoft’s engineers and designers hit every mark. The consoles are reliable, fast, and seamlessly easy to use; Quick Resume, better implemented than PlayStation 5’s alternative, is a quality-of-life feature that genuinely improves the quality of your life. The controllers have been perfected. Both consoles run silently and have been thoughtfully designed and updated with power efficiency in mind.

The Xbox Series X matches the PS5 for power almost exactly, and it does so in a chassis that’s less bulky, better packaged, and (to my eyes at least) much more attractive, with its clean, minimalist lines. Like the PS5, it is ultimately something of a disappointment in terms of pure power, delivering neither the frame rates, nor the raw 4K resolution, nor the next-gen wow factor that might have excited players. But within the parameters of this underwhelming console generation, it does almost everything more elegantly than the competition. For Microsoft — a software company that had been playing catch-up to Sony’s vast experience in consumer electronics for two decades — this represented a kind of triumph.

Then there was the Xbox Series S. The legacy of this junior console is complicated. But we can say that the motivation behind it showed foresight, sincerity, even generosity. Microsoft knew that console prices would not come down this generation — in fact, they’ve risen — so it moved to keep a low barrier to entry open with a no-frills device aimed at 1080p displays. The Series S has obvious compromises in power and storage, but you can’t fault Microsoft’s engineers for coming up with a genuinely affordable, appealingly simple entry point for next-gen gaming in a gorgeous box about the size of an original PlayStation 2.

On the surface, it was a wise move; Microsoft is opaque about sales figures, but the Series S appears to have sold at least as well as its big sibling, better in some markets. But it might also have been a strategic error. Developers chafed at Microsoft’s insistence that all Xbox games support both consoles. At best, this added hassle and expense to developing games for Xbox. Some also claimed that Series S held back their overall ambitions, even lowered the tech ceiling for the entire generation. At worst, it meant Xbox got games late, or not at all; in 2023, PlayStation was handed an accidental timed exclusive on one of the hottest games of the year, Baldur’s Gate 3, when developer Larian Studios couldn’t get it working on the Series S. Microsoft had to parachute in its own engineers to help.

Meanwhile, the PS5 continued to handily outsell both Xbox consoles combined at the same price point as the Series X, suggesting that demand for cheaper alternatives was limited. Perhaps Microsoft’s idea was ahead of its time; faced with what looks like an even more expensive console generation next time around, it’s easy to see demand for an affordable option increasing. Whether anyone will want to attempt one after the Series S is another question.

If the Series S was a strategic misstep, it was an almost insignificant one amid the wider maelstrom of Microsoft’s gaming strategy. Before the Xbox Series X and S launched in 2020, Microsoft was already thinking beyond consoles — and it was doing so in ways that all but guaranteed its commitment to the new generation would be half-baked. In-house Xbox games started getting day-and-date PC versions as far back as 2016. Xbox Game Pass, the ambitious subscription service, launched in 2017. Xbox Cloud Gaming launched in beta in November 2019, a year before the new consoles came out. Throughout this time, as Microsoft sought to build back from the humiliatingly fumbled launch of Xbox One, Xbox executives would tell anyone who would listen about how the audience they were after wasn’t just people on consoles, it was everybody with a screen.

The other thing those executives were doing was buying game studios left, right, and center. In theory this should have helped the Xbox Series X’s cause; an ill-advised retreat from first-party development under a previous administration had left the Xbox One’s stable of exclusive games looking rather bare, and here was a chance to bounce back. But it didn’t pan out. Due to ever-lengthening development times and endemic mismanagement at Microsoft, games from most new acquisitions didn’t materialize for years, or at all. The grandest of the pre-Series X acquisitions, Bethesda, was embarrassingly obliged to release two timed exclusives for PS5 before it could get around to serving Xbox with a semi-exclusive — and when it did, with 2023’s Starfield, it was something of a damp squib.

But Microsoft’s ambitions, fueled by the pandemic gaming boom, only grew. Just over a year into the generation, it announced its intention to buy Activision Blizzard, and with it many of the biggest game franchises in the world, including Call of Duty. This was the kind of console-war-ending megaton that had been the stuff of fanboy dreams for decades. But if this gigantic $68.7 billion deal did contribute to the end of the console war, it did so in favour of the other side.

In order to appease regulators, Microsoft had to promise to release Call of Duty on rival platforms, including PlayStation. The truth is it would have come to that conclusion on its own. As a game publisher, Microsoft was suddenly much bigger than its own platform, Xbox, could even remotely support. A distant third in the console market, the Xbox audience was just too small, and even for a company as rich as Microsoft, there was no time to invest what it had bought in growing it. It had taken on colossal development costs and needed to release games on every available platform, as quickly as possible, in order to claw back the maximum amount of sales.

This is how the Xbox-exclusive game died. Forza Horizon 5, arguably the best first-party Xbox game of the generation, was released on PlayStation 5 this year, as was Indiana Jones and the Great Circle. Soon enough, Starfield will join them. We already know Forza Horizon 6 will come to PlayStation eventually. In a sense, this was inevitable. The economics of AAA game production are making single-format releases unviable, and even Sony is slowly releasing its games on PC (sometimes even on Xbox). But Microsoft made no attempt to manage the decline of its console business. In the space of a couple of years, it has dropped it like a hot potato.

If all Microsoft’s games will eventually come to PlayStation — which still does have exclusives — why buy an Xbox now? It’s not such an easy question to answer.

The one remaining Xbox console exclusive worth a damn is Game Pass, the subscription service which looms large over so much of Microsoft’s decision-making, including the Activision Blizzard deal. This vision of an all-encompassing service for gaming content — very much modeled on Netflix, whatever Microsoft execs might say to the contrary — has been an aggressive land-grab for Microsoft, perhaps made in anticipation of the cloud-gaming future. It has driven many of the studio acquisitions, certainly more so than the Xbox platform has.

The result has often looked like a fantastic deal, but only for a certain kind of player who gets through a lot of games every year. That’s a market with a ceiling; everyone plays video games, but most people only play two or three games a year, rather than moving from one to the next like with TV and film. Game Pass has always been dogged by questions about how it can make economic sense for both Microsoft and for developers, and as that market ceiling approaches, panic appears to be setting in. After a 50% price hike, it’s questionable how good a deal it is any more, and whether it would be worth buying an Xbox for (setting aside the fact that Microsoft would definitely put Game Pass on PS5 if it could).

Perhaps you can trace the end of Microsoft’s love-affair with consoles back to 2014, when it bought Mojang and Minecraft. Here was a game that could be (and was, and still is) everywhere; a game that made the idea of exclusives look silly; a game that was the platform. It’s this scale that Microsoft has been chasing ever since. Next to Minecraft, Xbox looks small — even at its 84-million-selling height in the 360 era.

The Xbox Series X and S, fine consoles though they are, have been hampered at every turn by factors mostly of Microsoft’s own making. Five years in, we find the Xbox project as a whole in a messy, perilous state. Fans feel betrayed by escalating costs, canceled projects, shuttered studios, and exclusives that slip through their fingers. Meanwhile, Microsoft’s ambitions within gaming remain sky-high but saddled with unrealistic profit margins. Microsoft is bigger than ever in gaming, but its consoles have never been less significant. The Xbox brand encompasses more, but means less. If everything is an Xbox, what is an actual Xbox for? Microsoft has no answer.