Xbox might be in “real trouble” as a hardware manufacturer, according to head Christopher Dring. And some third-party publishers reportedly wonder whether it is worth making versions of their games for Microsoft’s console.

Report: Xbox might be in "trouble" as console manufacturer, with its sales in Europe "flatlining"

Dring shared his observations on the GI Microcast podcast after speaking with various game publishers at GDC last week.

“I heard it from a very prominent company and one not so prominent — was Xbox’s performance in Europe is just flatlining,” he said (thanks VGC). “You can follow our monthly coverage in the games market and you can see that Xbox sales are falling, and it’s been falling all throughout last year and it’s falling even harder this year.”

According to the GSD data, Xbox Series X|S sales in Europe fell 47% year-over-year in February. PlayStation 5 and Nintendo Switch also experienced declines, but not so dramatic, with their sales down 2% and 17% YoY respectively.

As a result, some third-party publishers are wondering whether releasing their games on the Xbox platform is sustainable from a business perspective. One company told Dring that they are “putting in a lot of effort” to make Series S and X versions of their game, but “for us the market is PC and PS5.”

“I don’t know why we bothered supporting it,” another company that released a big game last year said.

For Microsoft, console hardware is only a small portion of its business, and it has been investing heavily in its multi-platform content strategy this whole generation. But Dring believes that the company needs to make sure that it makes sense for third-party partners to continue releasing their games on Xbox.

Earlier this year, Microsoft also announced its plans to port four first-party games to PS5 and Switch, with Pentiment and Hi-Fi Rush having already been released. Although there are no official plans for more, some industry folks believe that the company might eventually follow with more ports. And this strategy is something that third-party publishers should also take into account.

Dring also shared what game companies think about the upcoming PS5 Pro, saying that he “didn’t meet a single person that understood the point of it.” The main issue is that devs didn’t seem like they needed the new version of Sony’s hardware, as “they weren’t really making the most of the PS5 in the first place.”

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