Xbox Series X and S face a significant decline in sales across Europe, trailing behind the dominant PlayStation 5 and even the older Nintendo Switch. With the PlayStation 5 sales surging by 143% and the Switch maintaining second place despite a drop, Xbox sales plummeted by 52%. The lack of momentum is startling, with month-on-month sales also declining for Xbox while competitors experienced growth.

Analysts point to a lack of impactful exclusives as one reason for Xbox's struggle. Even with the release of Starfield, which garnered 10 million players within weeks, it failed to sustain a boost in console sales. Industry experts also suggest that Microsoft's strategy of releasing games directly to Game Pass, while consumer-friendly, may be affecting console sales negatively in contrast to Sony's approach with their PlayStation exclusives.

Despite acquiring Activision Blizzard and the promising future releases such as Diablo 4 and Modern Warfare 3, their impact on Xbox Game Pass is not expected until 2024. Microsoft is also reportedly working on releasing more first-party titles from its studios by 2024, including new games from Bethesda and franchises such as Fable and Hellblade 2.

Microsoft's potential shift towards PC and mobile gaming could be strategic, given that leaked documents suggest a mid-gen refresh for Xbox Series X and S consoles in 2024. However, with significant losses in market share within Europe, it's uncertain whether these efforts will reverse Microsoft's console sale trends before its next-generation console release, estimated for 2028.