It's no secret Xbox has struggled in recent years, to the point that many gamers, either happily or sadly, have declared the console “dead”. While it's certainly not down and out yet, it would be disingenuous to pretend that nothing is wrong with the Xbox right now, as it has suffered a major fall from grace.
During the Xbox 360 generation, Microsoft seemed unstoppable. The console's main competitor, the PlayStation 3, struggled to produce must-have exclusives in its first years on the market, and a higher price didn't help either. Eventually, however, the tables turned. The PS3 began to prioritize home-run exclusives such as Uncharted 2 and The last of usand the release of cheaper devices made the console that much more accessible. Xbox, on the other hand, stumbled through the marketing and launch of Kinect, a motion-tracking device that was placed at the forefront of the console's branding strategy despite under-delivering on its lofty promises. This set the stage for the next console generation, which Xbox undeniably lost, according to former Xbox Gaming boss Phil Spencer. Things may be on the up, but it's going to take a lot of work to get Xbox back to where it needs to be.
'We know we have work to do' Xbox boss reacts to Q3 2026 revenue decline
New Xbox CEO Asha Sharma shares her thoughts on the company's latest earnings report, which shows year-over-year declines.
Xbox is gearing up for a strong 2026
Xbox has spent the last few years eroding much of the goodwill it once had with its consumer base. There are a few reasons for this, but perhaps the biggest is an ongoing lack of once-promised exclusives. At the start of the current console generation, Xbox gobbled up a number of beloved studios and IPs, including all those under the ZeniMax and Activision-Blizzard umbrellas, preparing for an onslaught of Xbox exclusives to compete with the likes of God of war and The Legend of Zelda.
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The promise of these exclusives is why many gamers bought an Xbox Series X|S rather than a PS5 at launch. But in the end, Xbox gamers once again ended up without any real exclusive games, watching from the sidelines as the PlayStation received well-received exclusive games in addition to Xbox's highly acclaimed first-party titles. With a disastrous Game Pass price hike and the inappropriate “This Is an Xbox” promotion, the Xbox Series X|S took the role of the industry's most optional console.
The good thing is that Xbox seems to know this and is initiating major leadership and operational changes to address these issues. Most notably, Phil Spencer's four-year term ended, and he was replaced by Asha Sharma as CEO of Microsoft Gaming. I still have some concerns about Sharma, mainly due to her lack of experience in the games industry and her previous position in Microsoft AI, but so far she has done all the right things. Under her leadership, Xbox has scaled back the recently elevated Game Pass to provide a more balanced value proposition, unpopular Xbox features like Microsoft Copilot integration have been heavily scaled back, and a promise has been made to rally around the Xbox console experience.
We'll see how indicative these decisions are of Sharma's long-term plans for Xbox, but in the meantime, the brand has some silver bullets in the chamber. Forza Horizon 6 has landed wonderfully with fans and critics alike, with many hailing it as the best in the franchise, and with the promising looks Fable reboot that will be released later this year, we could see opinions about Xbox begin to develop in a more positive direction.
What Xbox will need to succeed in the long term
You may have noticed that I've referred to Xbox as a brand several times, and that's because, for better or worse, that's how it's been defined this generation. The differences in performance between the Xbox Series X and the PS5 are negligible at best, and if you can play almost any Xbox game anywhere else, what good is the console itself? That's been the narrative that has surrounded the Xbox for years, and it's what will need to change for it to re-establish its dominance in the market. It needs to be less of a brand and more of a must-have console.
Sharma has hinted at a return to true console exclusivity, although I'd imagine many Xbox games would still launch on PC as well. Blocking future Xbox games from coming to PlayStation and Nintendo platforms would still be the most obvious way to make the Xbox a more important device. Right now, when it comes to exclusives, getting an Xbox is all cons, as there are tons of games that the console will never get, but virtually none that it will exclusively get. This needs to change if Microsoft wants to move consoles, and by extension, further solidify gamers within its ecosystem.
Returning to traditional exclusive practices could be tricky for Xbox, as it could be seen as simply taking games away from PS5 and Switch 2 users, rather than actually giving Xbox users something new. Still, there is a toll that may have to be paid.
I don't want to sugarcoat anything: public perception of Xbox is probably still at an all-time low. It will take further bold decisions, such as Sharma's reversal of Copilot and recontextualization of Xbox Cloud Gaming, to change the narrative. I'm not sure what those next steps will entail, but as long as Xbox keeps strong, entertaining gaming experiences (rather than unwanted AI features, for example) at the core of its strategy, then future years could see its return to glory.
