
Phil Spencer is gone. Sarah Bond is gone. The new CEO came from Microsoft’s AI division, gaming revenue is down ten percent, hardware sales reportedly fell by nearly a third in the last quarter, and half the internet has taken that as their cue to write the obituary.
I’m not writing an obituary. I’m writing a defence.
Not because I’m a blind Xbox apologist — I’ve got enough Achievements gathering dust on my account to prove I’ve earned the right to criticise the platform when it deserves it. But because the “Xbox is dead” argument is built on a metric that Xbox itself has deliberately, strategically, and quite correctly decided to stop caring about. And until we’re honest about that, the whole conversation is a waste of everyone’s time.
The Wrong Scorecard
Here’s the thing about console sales: they’re a great measure of how many people bought a box. They are a genuinely terrible measure of how healthy a gaming business is in 2026.
Sony sold more PS5s than Microsoft sold Xbox Series consoles.
This is true.
This is also, increasingly, beside the point.
Microsoft Gaming now reaches over 500 million monthly active users. Sony’s PlayStation Network has roughly 116 million monthly active users. These are not comparable numbers. They are not even in the same conversation. And yet every time someone writes the “Xbox is losing” piece, they compare console unit sales and declare a winner — as if streaming subscribers don’t count, as if Game Pass on PC doesn’t count, as if the Xbox app on your Samsung Smart TV, your Meta Quest headset, your phone, or your Amazon Fire Stick doesn’t count.
You don’t measure Netflix’s health by how many DVD players they sold. The metric changed. The business changed. The scoreboard changed. Only the discourse hasn’t.
This isn’t to throw shade at PlayStation. The PS5 is a brilliant product and Sony makes excellent hardware and, frankly, excellent games. But PlayStation and Xbox are now selling fundamentally different things. PlayStation is selling a premium, curated hardware experience — the best version of a specific console generation. Xbox is selling access to a gaming ecosystem across every screen you already own. Comparing their console sales figures is comparing apples to oranges and then concluding that apples are winning.
In Defence of “This Is an Xbox”
I want to say something that might be slightly unfashionable right now, given that the campaign’s chief architect, Sarah Bond, has just left the building: the “This Is an Xbox” campaign was right.
Was it flawlessly executed? No. The internal reaction — reports that it “offended” Xbox hardware staff — tells you something real about the identity tension baked into that message. And yes, it became a meme – The internet did what the internet does. But the underlying idea? Completely, obviously, defensibly correct.
For too long, Xbox relied on the presumption that its target audience had a basic understanding of Xbox’s product offering — which, when you say it out loud, sounds pretty ridiculous. Game Pass is genuinely one of the best value propositions in gaming. The ability to play hundreds of games across your devices for a flat monthly fee is, by any rational measure, extraordinary. And yet the awareness just wasn’t there. The campaign was an attempt to fix that.
‘This is an Xbox’ was designed to show that almost anything with a screen was now a portal into a huge library of games available via download or cloud streaming. That isn’t marketing spin. That is a factual description of what Xbox has become in 2026. My Series S under the TV and the Xbox app on my PC are the same ecosystem. They share my saves, my achievements, my subscriptions, my friends list.
That is not nothing — that is the whole point.
The campaign didn’t fail because the idea was wrong. It failed, to the extent it did, because the execution got ahead of the infrastructure. Cloud gaming still has latency issues in some regions. Windows on handheld devices is still a rougher experience than it should be. The promise of “play anywhere” runs slightly ahead of the reality of “play anywhere, perfectly.” But that’s a delivery problem, not a strategy problem.
The New Boss, and What She Actually Said
So: Asha Sharma. Previously president of Microsoft’s CoreAI product division, she steps into the role with a background in large-scale consumer platform operations and a track record of building services that reach enormous audiences. Unsurprisingly, the gaming press and the online brains’ trust has spent two weeks nervously speculating about whether an AI executive running Xbox means Xbox becomes an AI product.
What Sharma actually said in her opening statement is worth reading carefully rather than reacting to. Her three commitments were: great games first, expanding the platform, and growing the community. On great games, she was unambiguous — “Everything begins here. We must have great games beloved by players before we do anything.” That’s not the language of someone who wants to turn Cortana into Siri.
She has also signalled a “return to Xbox” that re-anchors the brand emotionally around consoles, while still supporting PC, mobile, and cloud — a noticeable pivot from Bond’s “Xbox everywhere” approach. And here’s where I think the new leadership is threading an interesting needle: they’re not abandoning the ecosystem vision, they’re just reordering the emotional hierarchy. Console first in identity. Everywhere else in practice.
That’s not a reversal. That’s an excellent communication correction for a brand refresh.
The Engagement Economy
Here’s the business argument that I don’t think gets made clearly enough: in 2026, the most valuable thing a gaming company can have is not hardware market share. It’s time. Specifically, it’s the aggregate amount of time that hundreds of millions of people are spending inside your ecosystem, exposed to your IP, subscribed to your service, and buying your games.
Microsoft Gaming now reaches over 500 million monthly active users and is a top publisher across all platforms. That is the number Satya Nadella leads with. Not console sales. Not hardware revenue. Monthly active users — the same metric by which every streaming service, every social platform, every subscription business on earth is measured.
Why does this matter for monetisation? Because engagement scales. A player who subscribes to Game Pass on their phone might never buy an Xbox console. But they’re in the ecosystem. They’re playing the games. They might buy DLC. They will almost certainly stay subscribed. And as Microsoft’s first-party catalogue — which now spans Halo, The Elder Scrolls, Fallout, Call of Duty, Minecraft, Diablo, and World of Warcraft — continues to release major titles, the value proposition for staying subscribed only grows.
Sony’s model is elegant and it works beautifully for Sony. Sell the hardware. Drive exclusives. Capture the premium end of the market. But it is structurally limited by how many people will spend several hundred dollars on a new console. Xbox’s model is structurally limited by how many people have a screen and an internet connection. Those are not equivalent ceilings.
The Hardware Isn’t Dead Either
I want to be clear about one more thing: the next Xbox console is coming. Sarah Bond, before her departure, described the next Xbox as “a very premium and high-end curated experience,” suggesting it’ll bridge the gap between PC and console. Satya Nadella himself has suggested the console-PC divide is a false one: “It’s kind of funny that people think of the console and PC as two different things. We built the console because we wanted to build a better PC.”
The handheld space is also real and growing. The ROG Xbox Ally may have had a rougher landing than Microsoft would have liked, but the category itself — portable PC gaming with Xbox branding and Game Pass integration — is not going away. Valve proved the market exists. Microsoft intends to (try and) serve it.
Older hardware remains part of the ecosystem too, and this is underappreciated. Xbox Series S is still being sold, still being supported, and still giving players without three hundred dollars to drop on a Series X a legitimate path into Game Pass. That isn’t a sign of weakness. That’s platform thinking. Hell, even my Xbox One still gets fired up from time-to-time with plenty of older games on Game Pass still working perfectly on the older hardware.
What The Obituary Writers Are Missing
The story of Phil Spencer’s tenure is not a failure. Over 38 years at Microsoft, including 12 years leading gaming, Spencer nearly tripled the size of the business and expanded Xbox’s reach across PC, mobile, and cloud. He shepherded the Activision Blizzard acquisition — a $75 billion bet that made Microsoft the largest games publisher on earth. He oversaw the creation of Game Pass. He kept Xbox alive through a console generation where it definitively lost the hardware war and somehow came out the other side with a bigger audience than it had ever had.
That is not the biography of a dead platform or a failed executive.
Xbox isn’t dead, and if you scratch the surface just a little bit, it’s hard to even think it’s restructuring. If anything, it’s recommunicating. It has a new CEO who comes from outside the traditional gaming industry, which is either terrifying or exciting depending on your disposition. It has a content chief in Matt Booty who knows where every skeleton in every studio is buried and has the relationships to keep the creative pipeline moving.
And it has 500 million monthly active users who, whatever the obituary writers say, are still showing up.
That’s not nothing.
That’s not even close to nothing.











