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Microsoft's Q3 earnings are here, and its hardware division suffered a 31% earnings drop, but the arrival of a new Xbox console may change that. A fresh hardware release would brew rejuvenated interest in the brand's consoles and boost its public image.
This article discusses the need for a new Xbox console and how it can elevate the brand's hardware revenue.
Note: This article is subjective and solely reflects the writer's opinions.
Why does Xbox need a new console?
Microsoft's console division had quite a contrasting Q3 earnings report. On one hand, Xbox content and services saw a massive 62% rise in earnings, which includes earnings from the Xbox Game Pass service that recently saw a boost from the Activision deal. While on the other hand, its hardware saw a huge 31% dip in sales.
The Xbox console is not selling well, and the February 2024 rumors of the Xbox hardware division shutting down and mostly focusing on the games may have further contributed to that. This came after another rumor suggested that a few Xbox-exclusive games like Hi-Fi Rush, Sea of Thieves, and Starfield may arrive on PlayStation.
This put X users into a frenzy thinking the Xbox hardware division may shut down. The brand's official account went silent for a few days, which fueled the flames. On February 12, 2024, Xbox announced a business update for February 15, where it cleared the air on the rumors, but the damage was done.
This is why Microsoft needs a new Xbox console. It would not only generate new attention but also lift the state of Xbox's public image. Also, as revealed by the Xbox Business Update event, Xbox is not shutting down. In fact, Microsoft stated the opposite by revealing exciting hardware news is on the way, and it plans to deliver the largest technical leap ever.
Microsoft could be referring to the mid-gen Xbox console refresh leaked during the FTC trial, or it could be a completely new device like the rumored handheld. We did get a lot of exciting news from the FTC leaks, and if they come true, it will be a win for both Microsoft and its users. Also, Sony is planning to bring the PlayStation 5 Pro, which is almost confirmed at this point.
Even Nintendo might be planning to bring the new Switch 2. So, Microsoft desperately needs a new Xbox console that is ready to launch by the time its competitors come out, and it better have some exclusive games with that launch.
How does the rumor of a new handheld Xbox console fit into this?
The rumors about a potential Xbox handheld console have been swirling around the last decade. But this got new traction when Phil Spencer, head of Xbox, said he had tried all the handled devices on the market, including ROG Ally and Lenovo Legion Go, but wondered how he could make them more like an Xbox. This was part of his interview with Polygon.
While he didn't directly say anything about an upcoming Xbox handheld console, he did share his desire to bring his software innovations over to the hardware side of things. A handheld Xbox console allows Microsoft to tap into a gaming market that was previously left unexplored.
Will a new Xbox console help elevate revenue?
A new Xbox console is bound to bring in more sales and elevate the revenue of the hardware division, so long as it doesn't keep repeating the same mistakes it did in the past.
