Xbox continues to see declines in Microsoft's financial reports, and new CEO Asha Sharma says that “we know we have work to do.” The brand has struggled quite a bit in recent years, as Xbox has failed to compete against industry leaders such as PlayStation, Nintendo and Steam. Console sales in particular have struggled and the company seems to lack a real identity at the moment.
Asha Sharma took over as head of Xbox in February, replacing Phil Spencer. In a short span of time, Sharma's tenure has seen a number of changes in the company. The changes seem designed to fix some of the issues on the Xbox, from small quality-of-life improvements to the brand's overall perception.
Xbox is hosting a new Helix Console event next week
A new Xbox event will take place next week, with new information about the successor to the Xbox Series X/S, codenamed Project Helix.
Financial battles on Xbox
In a post on Twitter, Asha Sharma reacted to the division's declines seen in Microsoft's third quarter financial reports. The Xbox boss wrote that “we know we have work to do.” Microsoft's financial reports show a 5% drop in content and services revenue compared to the same time frame last year, as well as a 33% drop in hardware revenue. The latter is not too surprising; Xbox consoles saw several price increases last year. Players are used to taking comfort in prices dropping late in their lifespan, rather than getting more expensive. With the company openly discussing its new Project Helix console, gamers are unlikely to buy an Xbox Series X that now costs more than it did at launch.
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The decrease in revenue from content and services is similarly attributable to price increases for Xbox Game Pass. Although Xbox has not offered information on the number of subscribers to the service, many gamers balked when the cost of the service increased last year, and that could have led to a drop in subscriptions. An Xbox Game Pass Ultimate price cut was one of Sharma's first actions, with the caveat that Call of Duty games no longer advance day one. It's unclear whether that change will lead to an increase in revenue, but the move could lure back lapsed subscribers.
Sharma is clearly looking at ways to improve the overall Xbox experience. One of the more controversial moves by the company in recent years was the decision to start offering first-party games on platforms like the PS5 and Nintendo Switch. While the move has generated increased sales for games such as Forza Horizon 5it also makes people question whether it's worth owning an Xbox console. Sharma says Xbox will “reevaluate” how exclusives are handled, but it remains to be seen if gamers can expect to see an actual change.
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Fans have spent the last few years questioning what the future holds for Xbox. Sharma took over for Phil Spencer while Xbox's Q3 was already underway, and it will likely take time for any proposed changes to take effect. A stronger Xbox is good for the overall video game industry as it can stimulate competition and lead to better products and games across the board. Sharma is right that it may take a lot of work to turn Xbox's current perception around, but hopefully things will start to improve for the company in the near future.
