summary
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Xbox has significantly improved its software sales in its recent quarterly revenue report.
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While hardware sales continue to decline, digital services may remain high.
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Xbox continues to move away from console sales, focusing on software and streaming.
At the start of this generation, the influence of Xbox as a console producer waned, revealing that the more popular PlayStation 5 is selling the series X/S all over. But when everything seemed lost, Microsoft has made the great decision to stop focusing on the console.
From last year’s “This is an Xbox” campaign to powerful additions to Xbox Game Passes such as Indiana Jones and the Big Circle, Xbox’s software Crusade has grown steadily. Additionally, many first-party titles have been ported to the PlayStation, and even the Nintendo Switch has significantly expanded its reach.
It took a while, but the console war may finally end. With the Xbox Shift strategy, it feels like the console market is no longer limited. Even CEO Phil Spencer seems to be making clear that streaming and software are Xbox’s new frontier.
Microsoft recently released its 2025 Q3 Revenue Report. Also, while hardware sales appear to continue to decline, software and content sales are up 8%, so Xbox’s outdoor strategy may actually be paying off.
One important thing to note is that Xbox Game Pass sales are not fully included in this report. That said, a massive 30% increase in subscribers on the last revenue call means they are likely still sitting neatly on Game Pass sales.
Apart from Indiana Jones, recent ports like Call of Duty on Game Pass, and PS5’s Forza Horizon 5 could be pushing this last quarterly wave of Microsoft’s content sales.
As shown in the report, an 8% increase in revenue is very important. While it hasn’t skyrocketed in itself, shifting away from the console proves that it’s not as harmful to sales as you think. After all, Xboxes had already lost money on each Xbox sold.
Given the recent tariff risks, Microsoft’s migration to cloud services, game passes, and game production will likely allow them to stay away from the market and stay in their own bubble. For example, Nintendo may face unique challenges in future hardware sales for the Switch 2.
Xbox appears to have more control over what they are selling and how they are selling, not tied to hardware. Like Steam, it’s one of making games, and another to own a platform where the games are streamed and sold.
Plus, there have always been constant rumors about what the upcoming Xbox consoles will look like. Some rumors have spread the idea about possible Xbox handhelds, while others have released about another full console release on the scale of the series X/s.
But honestly, I think Xbox is pretty happy wherever you are for now. With Game Pass subscriptions being boosted and less stressful to compete with PlayStation and Nintendo, these seemingly essentially quarterly sales seem like a big indication of the future for Xbox.
