Following in SEGA's Footsteps? What's Happening with Xbox and What to Expect in the Future

The Xbox brand is primarily associated with Microsoft's consoles, but it’s unlikely to stay that way for long. Recently, the company has undergone a dramatic shift in strategy. While the Series X and Series S are still on sale and Microsoft swears it will continue producing gaming hardware, its priorities are changing. According to the new vision, Xbox is no longer just a "box" in your room but an ever-evolving ecosystem accessible on as many platforms as possible. The transformation resembles what SEGA went through years ago, only on a much larger scale.

To understand why any change is necessary, just take a look at the financial "success" of the hardware. According to recent reports, Xbox consoles are struggling, to say the least. In 2024, Microsoft sold fewer than three million units. For comparison, Sony shipped four million PlayStation 5 units in November alone.

Marketing for the Series X and Series S has almost completely stopped. During the winter sale in most regions, Microsoft didn’t even release any special holiday bundles for its consoles.

At the same time, the company continues aggressively promoting Xbox Game Pass. The priority is clear: subscription revenue remains the main source of income for Microsoft’s gaming division. Hardware is taking a back seat — if not third place, then definitely second.

Phil Spencer has made it clear that he doesn’t believe in platform-exclusive games. In gaming industry terms, this is akin to the fall of the Berlin Wall. Spencer has promised to release more Xbox games on competing platforms — and he’s keeping his word. For example, this year, Microsoft will publish the Outer Worlds sequel, Doom: The Dark Ages, and Indiana Jones and the Great Circle on PS5.

Spencer wants games to be developed "for gamers, not platforms." Whether players are on PC, mobile devices, or PlayStation 5, as long as they buy Microsoft games or subscribe to Game Pass, they are part of the Xbox audience in the company’s eyes.

This new approach is likely appealing to studios under Microsoft's wing. After all, many developers dream of having their games available to as many players as possible.

Spencer has assured that Xbox-branded devices will continue to be released. However, Microsoft’s gaming division no longer aims to "bring all players to Xbox." The goal is to provide more options, allowing gamers to decide where they prefer to play.

That said, it’s difficult to say with certainty whether we’ll see another traditional console like the Series X in a few years. Rumors suggest that a Steam Deck-style device is more likely. Even Phil Spencer himself has acknowledged the existence of portable Xbox prototypes.

Although Xbox has plenty of internal studios, game development has been slow. The recent Avowed, for example, took six years to develop. Since games are now the main focus of Microsoft’s gaming division, it’s no surprise that the publisher is looking for ways to increase efficiency.

The company is betting on AI. Recently, it was revealed that Microsoft Research, along with studios like Ninja Theory, is exploring how artificial intelligence can speed up game prototyping, populate large virtual worlds with NPCs, or optimize older games for new hardware. Company representatives insist that AI will assist rather than generate content entirely.

Xbox’s shift mirrors SEGA’s path after the Dreamcast’s failure. Despite once being a major console manufacturer, SEGA fully transitioned to a software publisher in 2001. Sonic games and franchises like Yakuza and Persona started appearing on multiple platforms, including those of SEGA’s former competitors.

However, in Xbox’s case, this is more like the birth of a "super-SEGA." After acquiring Bethesda, id Software, and Activision Blizzard, Microsoft now holds far more renowned franchises than SEGA ever did. If SEGA successfully adapted to its new strategy, there’s little doubt that Microsoft’s gaming division can do the same — perhaps even more smoothly.

Once again, Microsoft isn’t giving up on Xbox devices despite its shifting priorities. However, in some ways, it’s fair to say that Sony has effectively won the more than two-decades-long console war between the two companies.

Still, PlayStation fans shouldn’t pop the champagne just yet. The fact that Xbox games are coming to PS5 is great news. But Microsoft exiting the hardware race could allow Sony to become complacent. Without strong competition, what’s stopping the Japanese company from releasing fewer blockbusters or implementing questionable business practices? You can read more about PlayStation’s situation in our dedicated article.

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Hardcore Xbox fans may feel betrayed by the brand. But if we set fanboyism aside, is it really so bad that Microsoft wants its games to be accessible on more platforms? A "future without barriers" is far more consumer-friendly than "buy another $500 console just for exclusives."

What do you think about Xbox's new strategy? Share your thoughts in the comments.