Xboxes faced a challenging year in 2025, recording a staggering 39% drop in console sales in the UK, making it the worst year on record for Microsoft in this market. In comparison, the PlayStation 5 experienced a decline of around 12% during the same period. These figures align with broader trends seen in global sales, particularly in the US, where Xbox sales plummeted by 70%. A major factor contributing to these disappointing numbers seems to be two consecutive price hikes followed by many layoffs and several canceled games. Despite this bleak scenario, Microsoft remains hopeful, with intentions to host Dev Direct streams later this month, offering updates on upcoming titles like Fable and Forza Horizon.

How will Microsoft's Xbox address the significant drop in console sales in 2026?

Microsoft aims to revitalize console sales in 2026 by focusing on bringing first-party games and its Game Pass service to rival platforms, potentially broadening its customer base. Additionally, the company is gearing up for announcements related to highly anticipated games during an upcoming Dev Direct stream.

Launched in 2020, the Xbox Series X/S represents Microsoft's latest efforts in the console market, aiming to compete directly with Sony’s PlayStation 5. However, with changing gaming habits favoring subscription services and cross-platform play, Microsoft's strategy may pivot further in 2026 to encompass broader accessibility to its gaming ecosystem.