Yesterday, Microsoft announced that it made 31 percent less off Xbox hardware in the first quarter of 2024 (ending in March) than it had the year before, a decrease it says was "driven by lower volume of consoles sold." And that's not because the console sold particularly well a year ago, either; Xbox hardware revenue for the first calendar quarter of 2023 was already down 30 percent from the previous year.
Those two data points speak to a console that is struggling to substantially increase its player base during a period that should, historically, be its strongest sales period. But getting wider context on those numbers is a bit difficult because of how Microsoft reports its Xbox sales numbers (i.e., only in terms of quarterly changes in total console hardware revenue). Comparing those annual shifts to the unit sales numbers that Nintendo and Sony report every quarter is not exactly simple.
Context clues
To attempt some direct contextual comparison, we took unit sales numbers for some recent successful Sony and Nintendo consoles and converted them to Microsoft-style year-over-year percentage changes (aligned with the launch date for each console). For this analysis, we skipped over each console's launch quarter, which contains less than three months of total sales (and often includes a lot of pent-up early adopter demand). We also skipped the first four quarters of a console's life cycle, which don't have a year-over-year comparison point from 12 months prior.
This still isn't a perfect comparison. Unit sales don't map directly to total hardware revenue due to things like inflation, remainder sales of Xbox One hardware, and price cuts/discounts (though the Xbox Series S/X, PS5, and Switch still have yet to see official price drops). It also doesn't take into account the baseline sales levels from each console's first year of sales, making total lifetime sales performance on the Xbox side hard to gauge (though recent data from a Take-Two investment call suggests the Xbox Series S/X has been heavily outsold by the PS5, at this point).