Microsoft’s Xbox games keep ending up as flops according to a new report. The report has highlighted the extent of Xbox’s failures across its game studios, with titles like Avowed, Keeper, and Hellblade 2 falling short of Microsoft’s expectations.
Despite having a pretty strong Xbox Games Showcase, any goodwill generated by Microsoft has quickly dissolved over the past few days. After confirming Gears Of War: E-Day and Clockwork Revolution are Xbox console exclusives, there’s been a lot of confused messaging around the company’s strategy. Additionally, according to reports, significant layoffs and studio closures are expected at Xbox at the end of the month.
Xbox CEO Asha Sharma recently admitted that the company’s revenue has sharply declined, despite a number of high-profile studio acquisitions over the years. The ongoing memory shortage isn’t helping matters either, which is leading to drastic rethinks around its plans for its next console.
Now, a new report has listed a bunch of Xbox games which have fallen short of Microsoft’s sales expectations, emphasising how much they’ve missed the mark over recent years. According to Windows Central, Avowed, Keeper, Kiln, South Of Midnight, Hellblade 2, Forza Motorsport, and The Outer Worlds 2 ‘didn’t come within range of expectations’ set by Microsoft. It’s said this is either in terms of ‘raw sales on external platforms’ or via engagement and retention on Xbox Game Pass.
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Additionally, a number of other games from within Xbox Game Studios, and from third party publishing deals, reportedly didn’t meet expectations either, with Minecraft Legends, Ninja Gaiden 4, Minecraft Earth, Bleeding Edge, Battletoads, Towerborne, and Ara: History Untold all specifically cited. It’s unclear what Microsoft’s expectations were for these titles, especially with more niche games like Keeper and South Of Midnight, but it’s a pretty damning list when lined up in this way. It also doesn’t leave many games left from Xbox which have been a success, with Forza Horizon 6, Microsoft Flight Simulator, and Indiana Jones And The Great Circle, being the only major ones omitted from the list of failures.
Last year, reports claimed Microsoft had placed a 30% profit margin target on the Xbox division – something the company refuted as ‘inaccurate’. According to Windows Central, this 30% margin was actually an ‘average’, with some parts of the Xbox business ‘operating up to a 40% accountability margin’ at the time, to offset shortcomings elsewhere. Since being appointed in February, Xbox CEO Asha Sharma has pushed back against the idea that the company is facing 30% accountability margins, so this may have changed amid the leadership shift. But even without these punishing targets, it’s clear Xbox’s acquisition spree isn’t generating the money they hoped for.
Sharma admitted this in the recent Xbox Reset blog post, describing the business as having ‘over extended’, adding: ‘We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win. At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next five years.’
The mention of third party exclusives is pretty astounding considering Microsoft owns a massive chunk of the Western games industry already. If it still needs additional partnerships when it already owns the studios behind Call Of Duty, Fallout, The Elder Scrolls, Candy Crush, Minecraft, Halo, Warcraft, and Diablo, something has gone very wrong. The key problem facing Xbox is rejuvenating these franchises to make them exciting again. Call Of Duty has been on a downwards spiral in recent years, Halo hasn’t been relevant for over a decade, and Bethesda has been working on The Elder Scrolls 6 for over eight years. Given how long games take to develop, these problems can’t be solved overnight, but the big question is whether Xbox has enough time left to reverse the damage that’s already been done, and make Project Helix the comeback it needs to be.
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