Amid diagnoses that the US console market is facing its "most precarious situation since the 1980s," Microsoft has reaffirmed its direction to make the console a core pillar once again for the next-generation Xbox.
Mat Piscatella, Executive Director at market research firm Circana, recently evaluated that the US console hardware market is in its "most precarious situation since the early 1980s." Through August this year, Xbox hardware sales in the US fell 33% year-over-year, while PlayStation sales declined 25%. Xbox reached its lowest level since tracking began, and PlayStation hit its lowest level since 2013.
Rising prices are also cited as a burden. During the same period, the average price of an Xbox sold in the US rose 26% year-over-year to $529, while PlayStation rose 20% to $597. Both platforms reached record highs in the US market. Piscatella explained, "Price sensitivity is becoming a real issue."
As uncertainty surrounding the overall console market grows, Microsoft is instead re-emphasizing the importance of consoles in its Xbox business.
On October 6, Windows Central reported that Xbox CEO Asha Sharma outlined strategies for Xbox Series X|S and the next-generation Xbox during an internal town hall for Microsoft gaming staff. The outlet stated that it had obtained a transcript of the town hall and verified its contents through separate sources.
Sharma described Xbox's future strategy around four pillars—Core, Content, Creation, and Connection—stating that while the console market itself is not currently growing in the gaming industry, Xbox needs to invest more in this area. In particular, she remarked to the effect that if Xbox cannot properly support its core console users, it will not earn the right to expand its business beyond consoles.
The next-generation Xbox, 'Project Helix,' is also an extension of this strategy. Sharma revealed plans to structure the 10th-generation Xbox not as a single product, but as a "family of devices." While keeping various form factors in mind—including handhelds—she explained that the starting point remains the console.
Sharma said, "There is not one device that fits all," adding, "We will certainly have a great console first, but we also know that many players will be on the go." Microsoft plans to manufacture some devices directly while collaborating with partner companies for other form factors.
This stands out as Xbox, which had focused heavily on platform expansion through cloud, PC, and Game Pass in recent years, is once again clearly defining its existing console user base as the core of its business. At the same time, for the next generation, it maintains a direction of tying various hardware form factors into a single Xbox ecosystem rather than relying solely on a single traditional home console.
However, the market environment is challenging. As sales of current-generation Xbox and PlayStation consoles in the US have sharply declined simultaneously while average selling prices have climbed to record highs, factors such as price and supply stability—not just performance—are likely to become crucial variables for next-generation consoles as well.
Ultimately, 'Project Helix' will emerge as a next-generation platform at a time when the growth of the console market is faltering. In a situation where the market is even evaluated as being at its most unstable point since the 1980s, the solution Xbox has chosen is closer to holding onto its core user base once again rather than giving up on consoles.
