Xbox sales are ‘flatlining’ in Europe as publishers consider dropping support

As Xbox boss Phil Spencer once again hints at a portable device, news from GDC paints a bleak picture of Microsoft’s hardware future.

In June of last year Xbox was enjoying one of its best periods of positive press in years, thanks to its well received summer showcase. By the end of the year though, not only had Starfield proven a disappointment, but reports emerged of how badly the console was selling in both the US and Europe.

The Xbox has never been popular in Continental Europe, but last year console sales dropped by 27%, at the same time as PlayStation 5 rose by 376%.

Now a trusted source has revealed that things have got even worse in 2024, to the point where both third party publishers and retailers are contemplating scaling back or even dropping support for Xbox entirely.

The information comes from GamesIndustry.biz editor Christopher Dring, speaking in a podcast after returning from GDC (Game Developers Conference) in San Francisco. He discusses a variety of industry issues and summarises the two main talking points of the event, as developer apathy towards the PS5 Pro and concerns that the Xbox is on the cusp of becoming irrelevant – at least in terms of hardware.

‘I heard it from a very prominent company and one not so prominent … Xbox’s performance in Europe is just flatlining. You can follow our monthly coverage in the games market and you can see Xbox sales are falling and it fell all throughout last year and it’s falling even harder this year,’ said Dring, who has access to sales figures not usually made public.

‘The major company, who released a big game last year, said, ‘I don’t know why we bother supporting it.’ We’ve mentioned in a previous podcast we’d heard that retailers in Europe were considering, or had already been cutting back, their Xbox stock on their shelves – hardware and games and that kind of thing.

‘And now you’ve got third party publishers going: ‘We’re putting a lot of effort trying to create a Series S version and an X version of a game when, to be honest with you, for us the market is PC and PS5.’

Xbox Series X console — This wouldn’t be the first time Xbox has tried to kickstart a new generation early (Picture: Microsoft)

Dring then discusses the next generation Xbox device, which could arrive as early as 2026, and states that Microsoft ‘need to make sure that it makes sense for studios to continue to make versions of their games for that system.’

‘I know it’s based on PC architecture, so it’s probably not too much work, but… that was the other thing I kept hearing at GDC, was what the hell is going on with Xbox?’

Dring acknowledges that the hardware side of the Xbox business is becoming increasingly less important to Microsoft but points out that it’s still very important for third party publishers.

When it comes to Game Pass, Dring speaks with less certainty, saying that he’s heard that ‘Microsoft’s putting a little bit less focus on Game Pass’ but admits that different sources have heard different things.

Dring doesn’t offer any specific insight into Microsoft’s next generation hardware plans but at the same time Xbox boss Phil Spencer has given an interview to Polygon in which he hinted so heavily about an Xbox portable it’s a wonder he didn’t just come out and announce it.

An Xbox portable inspired by the Nintendo Switch and/or Steam Deck has been rumoured for months now, as either the main form factor for the next generation hardware or some kind of additional model to sell alongside a traditional home console.

The rumours have been fanned in part by Spencer’s habit of liking tweets discussing portable Xbox devices and he’s often spoken of his interest in a handheld Xbox.

His latest comments are his most enthusiastic yet, as he spoke about making a list of things he would do differently with an Xbox portable, compared to Steam Deck style PC devices, so that it would ‘feel like an Xbox.’

Microsoft has already promised to reveal new hardware later in the year but while it’s generally expected to be merely a digital-only Xbox Series X, their situation is such that they’re clearly attempting to fast-forward to the next generation as quickly as possible.