Xbox consoles won't be phased out or discontinued, games hardware still important for Microsoft

Xbox gaming CEO Phil Spencer tells employees that Microsoft isn't giving up on console hardware.

2

Rumor has it that Microsoft will take select first-party Xbox exclusives to other platforms. Fans think this could kick off a death spiral that eventually gives Microsoft a logical and reasonable exit from the gaming hardware market. Apparently, this isn't true, and Microsoft has no plans to discontinue Xbox consoles.

The news comes from an internal all-hands meeting at the Xbox games division. Sources have told Inverse editor and games reporter Shannon Liao about Xbox's town hall gathering. In the meeting, Microsoft gaming CEO Phil Spencer says that Xbox hardware will "continue to be part of a strategy that involves multiple kinds of devices."

Read Also: Next-gen Xbox coming in 2026, may have dedicated AI acceleration via NPU processor

The original belief is that Microsoft wants to stop making Xbox consoles for a number of reasons. The first is that Xbox hardware is sold at a loss--consoles aren't sold at a profit, and Microsoft attempts to recoup these losses through software and services.

The second is that Xbox is being utterly demolished by the competition, at least for now. PlayStation consoles are out-selling Xbox by quite a bit; analyst firm Ampere Analysis forecasts the PS5 outsold the Xbox Series duo by nearly 3:1, and other data from IDG Consulting suggests a smaller 2:1 ratio.

The recent rumors, which said that multiple high-profile first-party games could cross-over to PlayStation and potentially make Microsoft into a third-party company going forward, sparked mass controversy in the gaming sphere. Gamers who shelled out $499 MSRP for the Xbox Series X are worried about their digital content libraries should Microsoft exit console gaming.

The main concern is that Microsoft and Xbox could bow out of the console market entirely like SEGA did in the 1990s and leave just Sony and Nintendo as the remaining Big 2 platform-holders. Microsoft would ideally keep making games and instead release them on Nintendo, PlayStation, Steam, and any other nascent platforms that could pop up over time.

But Xbox's Phil Spencer indicates that is not the case. Xbox hardware is still being made, and more information will be revealed sometime tomorrow during an official Xbox showcase.

Plus, Microsoft had confirmed in 2021 that it was already working on new console hardware.