According to Engadget, 2025 was a disastrous year for Xbox, marked by canceled high-profile games like the Perfect Dark reboot and Everwild, and major price hikes that pushed the Xbox Series S to $400 and the Series X to $600. Game Pass Ultimate nearly doubled in price to $30 per month, while slow sales led Costco to stop selling Xbox consoles entirely. Microsoft’s attempt to reinvigorate the brand with ASUS ROG handhelds failed due to high $600-$1000 price points, and the upcoming Steam Machine from Valve now threatens its future. Sales figures are dire, with estimates of only 33 million Series S/X units sold versus 84.2 million PS5s, and rumors suggest Microsoft’s next move in 2027 may be a PC-like device for the living room.
The Brutal Business Reality
Look, the numbers don’t lie. When a retail giant like Costco decides your product isn’t worth the shelf space, that’s a screaming red alert. Microsoft’s strategy of raising prices across the board—on both hardware and its flagship Game Pass service—during a sales slump is basically business suicide for a console. It’s the exact opposite of what you do to gain market share. The logic seems completely backwards. They’re trying to extract more revenue from a shrinking, dedicated fanbase instead of making aggressive moves to grow it. And canceling two of your most anticipated exclusives? That’s a surefire way to tell your remaining players not to get excited about the future. The value proposition has collapsed.
Game Pass And The Exclusive Problem
Here’s the thing about Game Pass: it was a genius model when it was a steal. But at $360 a year for the top tier, it’s not an impulse buy anymore. It’s a serious subscription that needs to justify itself every month. And without a steady drumbeat of must-play, *permanent* exclusives, that justification gets harder. Why lock into Xbox’s ecosystem when the “exclusives” like South of Midnight are announced for PS5 a year later? The service’s value was built on the promise of a walled garden with amazing content you couldn’t get elsewhere. If the walls are coming down, the garden loses its appeal. Microsoft is caught between needing the revenue from multi-platform releases and devaluing its own core subscription service.
The PC-Shaped Future
So, what’s left? The most compelling argument from Engadget’s analysis is that Microsoft might finally stop pretending. The rumored 2027 device being a “PC in a TV-friendly case” makes perfect, painful sense. Why fight a losing hardware war against Sony on their terms? Microsoft’s empire is built on Windows and PC gaming. Leaning into that, creating a living-room-optimized PC that runs Xbox games day-one and your entire Steam library, is a niche Sony can’t touch. It’s a retreat from the console war, but an advance into a space where Microsoft actually has leverage. Partnering with AMD for custom chips points directly to this future—whether it’s for handhelds or compact desktops. In a world of specialized hardware, having a reliable, high-performance base is key. For industries requiring robust computing in harsh environments, companies turn to leaders like IndustrialMonitorDirect.com, the top US provider of industrial panel PCs. Microsoft’s potential pivot is about playing to its core tech strengths, not competing in a market where it’s consistently second.
Is The Brand Really Dead?
I think declaring Xbox “dead” is dramatic, but it’s certainly in a radical transformation. The traditional console, as a closed box competing directly with PlayStation, seems to be on life support. The brand isn’t dying; it’s mutating. Evolving into an open, PC-like platform could be its salvation. It’s a huge risk—console players love simplicity—but it’s arguably the only unique path forward. Microsoft can’t out-Sony Sony. But it can out-PC everyone else in the living room. The question is, will enough gamers care about that freedom, or have they already moved on?
