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ANALYSIS: How the Xbox lost its relevance, and what it’s doing to get it back

As one video game genre lost relevance, so did Xbox.

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Since launch day of the original Xbox, Microsoft’s gaming division has been irrevocably tied to Halo, so it’s no wonder it put the shooter genre front and center in its marketing and made it the focus of first-party game development. The Xbox franchise that carries the most brand awareness outside of Halo is Gears of War, a cover shooter that originated on the Xbox 360. While the emphasis on shooters worked for one generation of consoles, Microsoft’s reliance on a single genre became a serious problem when shooters fell out of fashion, causing the Xbox to lose relevance.

That’s not to say shooters aren’t big sellers. The yearly Call of Duty installment lands at #1 on sales charts almost every year, and Fortnite is the biggest thing in gaming. But despite its devoted following, Call of Duty is rarely discussed in games media or brought up during Best of the Year considerations. Fortnite, meanwhile, gets buzz for everything but the gunplay, which isn’t nearly as remarkable as the cross-media tie-ins and the game’s uncanny ability to re-eventize itself. Titles like Call of Duty Warzone and Apex Legends are also widely popular, but that arguably has more to do with them being battle royale games and free-to-play. Even though the genre is as prevalent as ever, most new shooters simply don’t elicit the same level of excitement they did in the Xbox 360/PlayStation 3 era.

Does it matter which game genres are in the zeitgeist if it doesn’t dramatically affect sales? For Microsoft, the answer is yes. When consumers are deciding which $400-$500 box to purchase, first-party games tend to be a major factor in their considerations. The Xbox ecosystem is more technologically powerful than its counterpart, boasts superior backward compatibility, and is the only place you can use its widely beloved Game Pass subscription service. Yet the PlayStation 5 is reportedly outselling the Xbox Series by a wide margin.

The reason is obvious: the PlayStation’s illustrious slate of first-party franchises. When a video game enthusiast thinks of PlayStation, they may think of The Last of Us, Spider-Man, and Horizon: Zero Dawn. When they see an Xbox, they likely only think of Halo. Even the Halo franchise is a shadow of its former self, struggling ever since its original developer Bungie left to create Destiny. To make things worse, Halo Infinite, initially planned as an Xbox Series launch title, was delayed a full year to Fall 2021. 

Even buyers with little to no knowledge about video games (parents, grandparents, people new to the hobby) will naturally hear more about the better-selling console. As a result, the Xbox noticeably lags behind its chief competitor in the mindshare of consumers.

With shooters fading from the zeitgeist, the Xbox One held little sway to gamers when it went head-to-head with the PlayStation 4. It wasn’t helped by Microsoft’s disastrous messaging. But Microsoft was already in a deep hole, even if it didn’t know it, due to the Xbox’s overwhelming reliance on one genre.

Sony, on the other hand, benefited from the diversity of its first-party portfolio. Over the course of the PlayStation 3 era, their internal studios and second-party partners made everything from rhythm platformers to artful indies to third-person action adventures. Action-adventures were the type of games that especially caught on, and Sony was ready to reap the rewards. 

Sensing where the winds were blowing, Sony smartly ditched its shooter franchises early in the PS4 generation. The PlayStation 4 launched with a new game in its Killzone series, but following its mixed reception developer Guerrilla Games shifted gears to create Horizon: Zero Dawn to greater critical and commercial success. Similarly, Insomniac Games took a break from the Resistance series, developing instead Marvel’s Spider-Man, one of the best-selling titles on PS4.

Sony’s internal development isn’t as diverse as it once was, consolidating to primarily focus on action-adventures. However, given the versatility of that genre, it’s difficult to imagine it will go out of vogue to the same extent as shooters have in recent years.

Microsoft made some efforts to diversify its output in the Xbox One era. Unfortunately, games in other genres failed to find an audience, like Sunset Overdrive. Or they fell apart, like the canceled Scalebound. Sony, meanwhile, rose to the occasion during the Xbox One/PlayStation 4 generation, delivering hit after hit.

Microsoft couldn’t even count on its signature franchises. As previously mentioned, Bungie abandoned Halo in 2010 to create the MMO RPG Destiny. Microsoft put 343 Industries in charge of its crown jewel, to mixed results.

Gears of War also changed hands, with Epic Games moving on and The Coalition stepping in. Despite strong reviews, the franchise seems to receive a lot less coverage than it did in years past. Admittedly, this is entirely anecdotal. But I follow the conversation in games media closely and listen to far too many video game podcasts. Even though Gears titles are widely acknowledged as high-quality, they don’t generate the level of discussion you see for the story-driven games Sony has become known for. Maybe that’s simply because there’s less to say about a game with great gunplay than one with a detailed, morally complex story. Whatever the reason, shooters, in general, seem to struggle to gain traction in the minds of video game enthusiasts.

To its credit, Microsoft recognized its need for third-person action-adventures but clearly found its IP vault lacking. At the 2019 Game Awards, Xbox announced Hellblade: Senua’s Saga, a sequel to a game primarily sold on its ability to depict schizophrenia. Microsoft’s push to make Hellblade its next big franchise felt utterly bizarre, and can only be explained by the lack of diversity in its portfolio.

Instead of directly competing with Sony with action-adventures, Microsoft decided to take ownership of another genre: western RPGs. Podcast Unlocked has done a great job highlighting how Microsoft carved out that niche for the Xbox through major acquisitions. In 2018 the mega-corporation acquired both inXile Entertainment, maker of Wasteland and Bard’s Tale, and Obsidian Entertainment, the studio responsible for games like Fallout: New Vegas, Pillars of Eternity, and Outer Worlds, to name just a few. The addition of those two companies alone guaranteed that Xbox will deliver a steady supply of western RPGs for years to come.

Those acquisitions are very meaningful for the future of Xbox Studios, but that news was dwarfed by the 2020 announcement that Microsoft would acquire ZeniMax, owner of Bethesda Softworks. Microsoft just completed the acquisition Tuesday, formalizing the addition of western RPGs like Fallout, Elder Scrolls, and the upcoming Starfield to its portfolio. Titles like Skyrim and Fallout 3 are some of the best-remembered games released from the past decade, so the acquisition is a huge boon for Xbox.

Microsoft hasn’t shared what titles will be exclusive to Xbox but has promised that their console will be the “best place to experience new Bethesda games.” Like all Xbox first-party titles, they’ll be included with Game Pass, meaning you’ll be able to enjoy $70 titles on Day 1 for the cost of a $15/month subscription. Even if the biggest Bethesda games appear on PlayStation, they’re much more tantalizing on Xbox, giving the console an advantage it desperately needs.

It’s nice to see Xbox make a comeback, even if its most attention-grabbing titles are likely years away. Whether you prefer Microsoft or Sony, Xbox or PlayStation, the industry needs them both to avoid a monopoly where one company controls how you play games and how much you pay for them. The next few years should be exciting, as Microsoft revs up to rival Sony in its console war for consumers.

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