With A Dominant PS4 and A Resurgent Nintendo, What Can Microsoft Do To Maintain Its Niche In The Gaming Market?

PS4’s domination continues, and the Switch is far more successful than anyone imagined. Where does that leave Microsoft?

Posted By | On 20th, May. 2017 Under Article, Editorials | Follow This Author @Pramath1605


Until now, the Xbox has been playing second fiddle to the PlayStation 4 in the gaming market- but there has been an argument to be made that being a strong, viable second is not necessarily a poor position to be in. After all, the Xbox One still sells enough hardware and software, albeit not as much as the PS4. In the console gaming market, it is one of the two major brands. Yes, it’s not on top right now, but it’s still maintaining its own place, its own niche. What could be wrong with that? It’s not like Pepsi has to beat Coke to be able to exist in the cola market, right?

Of course, if a new soda brand were to come along and threaten Pepsi’s place – say, Dr. Pepper – then there would be some wisdom in questioning Pepsi’s long term viability in the market. Which happens to be exactly the position that Xbox finds itself in in the market right now. Against the PS4, its position right now is tenuous at best. Some high profile exclusive games have been cancelled, the PS4 has increased its lead in that area in the first five months of this year multifold, and the difference in the install base of the two systems only continues to grow with each passing month. Its hold on its own position was already slipping, due to the PS4 exerting its dominance from a PS1 like state – which still admitted the N64 as a strong second place contender – to a PS2 like state, which took no prisoners. And now, the Xbox One’s market position is under fire from another, second front.

The Nintendo Switch’s success has taken everyone by surprise. Even people who were optimistic about the system’s chances ahead of its launch, like me, didn’t expect it to be doing so well. The most interesting thing here is that the Switch is doing as well as it is right now, worldwide, and over a sustained period of two months and counting- meaning this isn’t success localized to a specific point in time or space. What is even more interesting is that the Switch right now is expensive, and lacks a fully featured games lineup. Which in turn means that when the true big hitters hit the system, and when its price drops, its sales potential will increase beyond what it is right now.

"The Nintendo Switch’s success has taken everyone by surprise."

The problem with this overall scenario is for Xbox, which stands to suffer the most from the Switch’s success. The PS4, owing to its sales lead, as well as its massive games library of exclusives and multiplatform games, has become the de facto default home console for anyone this generation, and that is not about to change. However, the Xbox One at least stood to gain some sales as a strong supplementary console- and now the Switch is edging it out of that niche. Unlike the Xbox One, which has the same value proposition as a PS4, except with less hardware power, and fewer meaningful exclusives, the Switch is an entirely unique proposition, and it buys into an entirely new, fresh, distinct ecosystem of games than the one on PS4. This means that a PS4 owner is far likelier to pick up a Switch than an Xbox One; even an Xbox One owner is very likely to pick up a Switch to supplement their Xbox. In all cases, the Switch’s sales are catch all, increasing its appeal across demographics. If the Switch keeps up its current pace of sales, its total sales will have caught up with the total sales of the Xbox One by the end of its second year on the market. After that, the Switch will have outsold the Xbox One, relegating Microsoft’s console to last place, with the Switch instead becoming the second to the PS4’s dominant first.

The problem for Microsoft, then, is that it is faced not just with a PS4 that is more dominant than ever before, but a resurgent Nintendo- and both are chipping away at its market place. Both have managed to define their places and their niches in the market, and the Xbox’s is growing ever more tenuous as a result. What, then, can Microsoft do to maintain its own place?

Microsoft itself has probably foreseen this series of developments, and it has already started to make moves to a gaming market that isn’t bound by hardware or hardware cycles. Making a continuous ecosystem across Windows 10 PCs and Xbox One is one way that Microsoft is consolidating its place in the gaming market – a gaming market in which it doesn’t need a console to sell well, or even at all, and any sales that it gets are only welcome cherries on a cake that spans an ecosystem of games across several hardware devices.

"It looks like for the time being, Microsoft is doubling down on the hardware market by returning to the identity that defined Xbox in the first place."

However, the move to a hardware agnostic market, if it happens at all, will be slow, and it looks like for the time being, Microsoft is doubling down on the hardware market by returning to the identity that defined Xbox in the first place, and that the Xbox One moved away from to its own detriment. Right now, with the Xbox Scorpio, Microsoft is introducing a high end, obscenely powerful, PC like console- which is what the Xbox and Xbox 360 were. Microsoft is undoubtedly hoping that this return to the brand’s once core identity, and this clear definition and articulation of what Xbox is about, will help it stem the tide that is turning against it, and hold its own. Whether or not that happens is, of course, something that remains to be seen.

Between Xbox Play Anywhere and the Xbox Scorpio, Microsoft has placed a stake in the ground, and is willing to make a stand to define and defend its niche and place in the gaming market, especially against the combined onslaught of the PS4 and the Nintendo Switch. But whether or not this gambit works – whether or not it is even needed (after all, sales for the PS4 may begin to slow down, or the Switch may not be able to sustain its momentum) – is something that remains to be seen. This E3 promises to be a hugely interesting one.

Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to GamingBolt as an organization.


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  • Paul Garrison

    Nothing, it’s over.

  • LifeOnMars

    What Microsoft needs to do is release the the Scorpio at $399 and get some AAA exclusive titles. They need a console that will sell in large numbers as the Xbox One S is selling poorly and sales continue to decline.

    • LDS

      Scorpio is really for small segment of users in the market. They are not expecting Scorpio to outsell xboxone at all. So there’s no point for MS to get it out at 399. It will probably sell about the same proportion to PS4 and Pro at the most.

    • LifeOnMars

      It looks like PS4/PS4 Pro will continue to outsell Xbox One/Scorpio 2:1 then.

    • LDS

      Remember, the company’s primary income source is through xb live and distribution the second. Given that XB1 and Scorpio is the same gen console, Scorpio alone won’t drastically increase the live users so it will be a stupid move for MS to sell the console at a loss. It’s core purpose is to keep the current users stay in the same ecosystem and hopefully attract a few more new users.

    • Eddie Battikha

      U couldn’t have said it anymore truthfully.

    • Starman

      All wrong , xbl is a big source but not the main..

    • LDS

      What is it then?
      I really hope you are not referring to the Windows ’cause anyone who have a sense would know that I am only speaking about XB department.

    • JimboDeadite

      They need to give up making consoles period! They are a joke of a gaming company. They killed Rare, they make horrible gimmicks like Kinect for example, their “exclusives” get released for PC anyways. “scorpio” is pointless and only hardcore xbox fanboys would waste money on it.

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  • Starman

    Funny how Sony’s existence wasn’t in question when MS and Nintendo mopped the floor with them last gen……But here we are with a company that has money longer than train smoke, but their existence in the industry is in question because of a few “hic-ups” (in place already from the previous head of xbox).
    Sony is going deeper in the hole every month , MS has nothing to fear…

    • LifeOnMars

      PS3 has outsold Xbox360 worldwide.

    • traind

      Selling boxes doesnt equal profit. Both were profitable last gen… But every XBOX 360 sold in the US generated more profit due to attach rate of games and other services.

    • LifeOnMars

      That was a reference to fangirl Stardust saying Micr $oft wiped the floor with Sony last gen. America is NOT the world.

    • ShowanW

      This is true Microsoft is NOT the world…

      But people in the United States by more video games software than, some 2or3 other countries combined.

      All 3 want to sell as many boxes as possible. I WONT dispute that. But Xbox Live has clipsed the Xbox Hardware. Something in mega the mega corp wqs bankin on

    • Starman

      MS is the world , without them and their programs ….there wouldn’t be any games or internet…
      If they shut down windows and all their owned programs ,codec etc etc ..you wouldn’t be gaming ..

    • ShowanW

      Now this i can agree with a million times over.

      Microsoft rather on the backend or front end have been a cornerstone in some capacity

      Windows is still the defacto OS forpc gaming (and Xbox now)

      Programming languages etc, infrastructure, ecosystems… Microsoft has had a hand in a majority of it…

    • Dougdec92

      Don’t worry, Apple would happily sell more macs to sympathise with that deathwish, fall and another will take your place swiftly. Even the Roman Empire fell bro.

    • Starman

      You must really be from mars …stfu little girl

    • crazy_black_man- ✓ᵛᵉʳᶦᶠᶦᵉᵈ
    • Starman

      Still up voting yourself , have nothing to say , I’m pointing out facts , and you’re replying like a 12 year old…….almost forgot , STFU ..

    • Dougdec92

      Hiccups you say, I thought they were executive comas, but then, you’re always so modest and that’s why we love you for it.

    • Dougdec92

      And pls, Nintendo did the mopping, we all have browsers you know?

    • J.j. Barrington

      Who mopped the floor with who?

      And if Xbox has all this money, why are they missing out on so many games, have the fewest first party titles, and the least big 3rd party marketing deals?

  • Tga215

    Man who cares just enjoy these great games coming out

  • TwoLiterSoda

    MS is fine and will continue to be fine. In no way does it have to worry about Nintendo Switch as they are totally different markets for totally different gamers.
    Same can be said for Sony, they will be fine and don’t need to worry about the Switch or Scorpio.
    These articles are such a joke and are only made to get a rise out of fans, don’t fall for the click bait which, sadly, are the majority of articles lately. Shame.

  • Riggybro

    Microsoft need to take a leaf out of the 360 playbook unfortunately the Scorpio is looking like a leaf out of the original Xbox playbook.

  • LordCancer Kain

    what is their niche? it isn’t perfect dark, jet force gemini, kameo, fable… it’s games as service and trading their users for whatever whimsical trend dances in and out of popularity. they are not a trend setter but a trend follower, the last one to the party and first to leave. scorpio is a sting without poison, irrelevant and impotent.

  • Roger Heflin

    Scorpio Need to Sale for $399 and Get the VR set up. Some people are going to want VR and Scorpio will be the place to have the best VR experience… as well as Better Multiplatform experience…. I don’t care about VR and have stayed out of this generation so far… I am still playing my Xbox360 and have over 100 games to play… I am interested in the Scorpio and have decided to get one if it is 4 to 5 bills … I am interested in the Witcher 3 and Ace Combat 7… And the Next Elder Scrolls will be best played on the Scorpio… as well as Madden 18. I hope they come out with better Star Wars games like they did for the original Xbox and Baldur’s gate type games… that is what I am interested in….. Scorpio here I come. (Also an new Fable would be great)

  • Dougdec92

    They should just release fresh games for Xbox, when you’re halfway into a game chasing a troll and mjollniring your way with an epic axe, even ps4 users like me forget that there is something called resolution or fps, they should just release games for the Xbox cos games will always make a console, not power alone, remember when Sony was lacking exclusives in the first 1 and half years?,

    • Fweds

      Remember Sony sold their consoles on power not software, as seen for the first two year’s.
      If the Xbox One done 1080p and the ps4 was doing 900p then the Xbox would of sold more.

      Whichever console runs multi format titles best is always going to sell better, it gets all the attention on all the site’s when they do side by side comparison’s etc
      Ask “MrXrat” AKA “Revolver ocelot” , “RhubarbForFingers”. That’s all he used to talk about but has been a lot quieter since the PS Protato has undelivered in performance.

    • Dougdec92

      Sorry to burst your bubble but the ps2 was severely underpowered, the og Xbox took it for breakfast, the wii was just powerless compared to the competition and didn’t play 3rd parties spectacularly but sold more than any console combined in their respective generations, was it their graphical power?, nope dear, it was the games they had, pray MS learns from history or they will have a serious case of deja vu.

    • Mr Xrat

      I remember the PS4 having a much better software lineup than the Shitbox Done since day one, Xgimp.

    • Fweds

      You clearly don’t .

      Xbox one exclusive launch titles, not including indie junk or novelty games.

      Dead Rising 3

      Forza Motorsport 5

      Killer Instinct

      Ryse: Son of Rome

      ——–+

      PS4 exclusive launch titles, not including indie junk or novelty games.

      Knack

      Killzone

    • J.j. Barrington

      Ryse might as well have been a novelty game, Killer Instinct wasn’t much more than indie junk, content wise, and Dead Rising is owned by Sega, isn’t it?

    • Fweds

      Rise is a first party title by Crytek and of course one that the PS4 didn’t have, Killer Instinct is a very popular first party title and was given Free with a new playable character every week, you didn’t and still don’t need to buy new characters and Dead Rising was published by MS that is why that version never came to ps4.

      At the end of the day MS line up was simply better, only fanboys would try and say otherwise Sony simply did not have the same quality title’s and they then went on to push indie games for the next two years.
      Fanboys have short memories.

    • J.j. Barrington

      So now you’re making excuses for why those games count? Ryse was made by Crytek, so it fundamentally CAN’T be first party. KI is pretty low-budget, and that particular Dead Rising didn’t do every well and STILL isn’t first party.

      What argument are you trying to make, really?

      Injustice was a better choice than Killer Instinct, without question. It was also better than that abomination Fighter Within.

      Dead Rising 3 was the lowest rated main entry until DR 4, and Killzone had nearly doubled it in sales by March of 2014. Indeed, the only game that did well critically and commercially was Forza from your list.

      Ryse didn’t do well in either case. And considering how many things people complained about with that one, it’s a little odd you would have chosen it. And even though it reviewed worse, Knack’s getting a sequel and Ryse is… well, not.

      You’re right that fanboys have short memories. So short they- you- forget they’re fanboys.

    • Fweds

      Ahh good to see that you finally mentioned a ps4, launch title though it must of been hard to even mention that abysmal game.

      Why are you talking about game sales that is in no way representative of quality it just shows there wasn’t a lot of choice and that game sales were very low compared to the number of Ps4 consoles sold.

      Anyway my turn to be negative, every game that wasn’t multi format was terrible on the PS4 launch and then you had Sony convince you for the next two years that indie games were the must have thing and so many gullible people who will believe anything Sony say’s went along with it.

      Will you be buying Knack 2 ?

      Looking at your posts I’m beginning to think I’m actually replying to multi. Mrxrat AKA Revolver ocelot, RhubarbForFingers etc

    • J.j. Barrington

      If sales are in no way representative of quality, what must it say about all those games doing more poorly than their PS4 counterparts?

      Every game was terrible? And what are you using to determine that? It’s not your personal experience, so what did you pick?

      You don’t really think anybody falls for your crap, do you? More good games have been released on PS4- even in those early years- than on Xbox. That’s true no matter how you slice it… with the distinct exception of slicing it for an Xbox fanboy like yourself.

      If you’re beginning to think ANYTHING, that’s a step in the right direction; this other stuff you’ve filled your comments with doesn’t qualify as thought. At, not of the independent variety.

    • Mr Xrat

      Filler Instinct was a novelty game so you can strip that out. DR3 and FM5 were mediocre and Ryse flat out sucked. Combine that with sparse first party support outside of Kinect and Halo/Forza post-2011 and it’s no wonder people were tired of Xbox in 2013.

    • Fweds

      But every current PS4 title released are mediocre to as far as I’m concerned.

      But back to the Launch titles I called you out on, start again only without the “i’m a Lapdog for Sony approach”, what title’s were released on the PS4, I listed them for you and you didn’t even want to mention them and you talk about mediocre ?

    • J.j. Barrington

      As far as you’re concerned? Doesn’t that only matter to you?

      And since you’re an Xbox fanboy- as you’ve proven time and time again- why would anybody even take that seriously? You’re calling quite a few games rated higher than pretty much everything Xbox has “mediocre,” and yet there’s absolute certainty that you haven’t played them to know.

    • Fweds

      Any reason why you only replied to my post and not the one I was replying to ? Was that because he was negative talking about Xbox so that’s ok with you, but no one is allowed to reply and mention the PlayStation right ?

    • J.j. Barrington

      Probably because you’re as bad, but don’t actually have anything- like, say, metacritic or sales- to back up your claim. On the other hand, fanboy and troll he might be, but Xrat has those things in his favor when he makes his claim.

    • Mr Xrat

      “as far as I’m concerned”

      Just as well no one cares what you think, isn’t it?

      Your games suck by the way. 🙂

    • Fweds

      But that’s the point I was making, ‘as far as I’m concerned’ or ‘in my opinion’ is missing from your comments, do you understand ?

    • Mr Xrat

      So at least you understand that no one cares what you think. 🙂

    • J.j. Barrington

      Why do you remember things that don’t exist?

  • JimboDeadite

    I have the Nintendo Switch, and it seriously is the best Gaming Device I’ve purchased In a very long time! I haven’t even touched my ps4 nor xbone since I’ve had the Switch, March 3. I don’t see the “scorpio” selling well at all. If you want a High end gaming device, you are better off just buying a PC. Microsoft don’t even have any exclusives for their consoles. They get released for PC anyways, so it’s pointless even owning an Xbox nowadays. For now on it will be Nintendo and PC for me!

    • Luke Skywalker

      I honestly don’t understand the mental make up of people who say things like you just did.
      anyway, you haven’t touched your other consoles since March 3…..sounds like you don’t have a lot of online friends that you play with and that’s the difference with you and a lot of other people.
      you might not see the scorpio selling well because I believe you’re mentally blocked to the fact that lots of gamers (quite possibly the majority) wants to play on consoles and not on PC so the PC argument doesn’t fly. pretty much all of the gamers I’ve asked if they’re getting the scorpio said yes, well they weren’t casual gamers though

    • Riggybro

      “I honestly don’t understand the mental make up of people who say things like you just did.”

      Neither do Microsoft hence why Switch and PS4 are doing so well.

    • Starman

      STFU

    • J.j. Barrington

      Surely, you’ve got a better response than that?

    • ChatterBoxJay

      Ha Ha. this made my day!

    • Learned Handgun

      Selling over 20 million units is not doing well?

    • Riggybro

      It’s up there… with GameCube.

      We also live in different times. The market is bigger now. 20 million today is not comparable to 20 million say 20 years ago or even 10 years ago.

    • Learned Handgun

      Right.

    • J.j. Barrington

      If the market leader is doing 3 times what you’re doing(more like 2 times), then 20 million is NOT doing well. Especially not when you launched at the same time and were, for a little while, selling comparably.

    • Learned Handgun

      you don’t have to be doing as well as the market leader to be doing well. Fortunately for you, there is absolutely no requirement that you buy an Xbox, so I assume you will never be posting on Xbox articles anymore since you don’t want one and aren’t required to get one.

    • J.j. Barrington

      Unless you’re just breaking into the market, how well you’re doing is pretty much always in regards to the market leader.

      Your assumption is asinine and illogical. It’d be best not to make those in the future.

    • Learned Handgun

      You trolling articles about xbox is asinine and illogical. Certainty there are articles out there about things you do like, unless you have really don like Xbox and that’s why you can’t stay away from Xbox articles.

    • J.j. Barrington

      My making comments you don’t like is trolling? That’s not how it works.

      Pretty sure this article is about all three consoles, too. Unfortunately, you’re too busy being blinded by your own bias to even understand that this article is about the relationship between the three.

    • Learned Handgun

      It’s actually about Microsoft’s strategy in light of the other consoles. It is not about the other consoles. That my friend is reading comprehension.

      And as for bias, no one is fooled by your claim to not being a troll. You can’t post only negative stuff on Xbox articles consistently and not claim to be a troll. You probably don’t own an Xbox or have any desire to own an Xbox. That is fine. But seeking out Xbox articles to post negative stuff is asinine and illogical.

      In the end, we both know you are going to continue to troll Xbox articles because either it is actually a really good system or you have nothing better to read about or to do because you suck at life, or a combination. My vote is for a combination.

    • J.j. Barrington

      Okay, so take out the other consoles, and it’s Microsoft strategy in light of…

      See what I mean yet?

      All this stuff about what I “probably” do makes you sound pretty silly. As silly as you thinking I should avoid articles if I have anything critical to say.

      You’re not sounding very learned, here, Handgun. Making such close-minded assumptions confirms your bias- which diminishes your argument both for the article and against me- and shows that you’ve still got quite a lot of learning to do.

    • Learned Handgun

      Well, this was clearly too much of a thought challenge for you. Continue on trolling articles to relieve your pent up dissatisfaction with your sad life.

    • J.j. Barrington

      Wait, lol. Lemme get this straight: you can’t grasp the simple concept that you can’t talk about Microsoft’s strategy for the Xbox without its relation to the competition, but I’M the one that’s struggling?

      And in order to cover for your own inadequacies in comprehension, you take extremely poor shots at a life you know nothing about?

      Talk about sad…

    • Dougdec92

      Wow, I believe I saw this survey conducted by you on CNN on you asking pretty much every gamer about they having a Scorpio and because of the nearly 100% yes turnout rate, it will sell well, I honestly don’t understand your mental makeup of what you just wrote there.
      He not touching his consoles shouldn’t bug you, his Xbox is already self-explanatory… If you know what I mean, his ps4, no sweet exclusive after March, switch came in March so newer games. And the PC is the most powerful platform, get used to it, their best game may be Minecraft, yes, but it plays multiplats better. Also, a lot of switch’s games are multi-player…. Online?…

    • Luke Skywalker

      Woah buddy cool with the nonsense….in no way does him not “touching” his console bug me in the slightest. I only made an abstract observation that if he had online friends that he played with regularly then he would have played with those friends at some point in those 3 almost 4 months (since March 3rd to now).

      The people I asked were people in my circle

      PC might be the main most powerful platform yes but that but as I’ve said not everyone wants to play on PC (so there’s nothing to get used to).

      Also, there’s nothing about exclusives. I’m not an exclusive fanatic like most of you seem to be. I don’t play exclusives, I play games. So whether a game be an exclusive or not doesn’t matter to me one bit, once it’s a game I want to play I am going to buy it and play it.

    • Dougdec92

      Ohk, I misunderstood you then..

    • Dougdec92

      Ohk, I misunderstood you then..

    • traind

      Microsoft will be happy with that as long as you buy some of their games for PC. I hope Nintendo don’t pull a Wii u and screw Switch owners too.

    • Dougdec92

      Hopefully

  • JimboDeadite

    I hope Microsoft just makes games, and stops making pointless consoles. And people complain about Nintendo..At least Nintendo has the Exclusives, and their “Gimmicks” work. Kinect was beyond Awful!!! Trash!

    • Luke Skywalker

      ????

    • Learned Handgun

      Did you ever own a kinect?

  • traind

    Nearly 30 million customers does not equal a niche. Sure, Microsoft would rather have sold 55 million like Sony but their games business is still sound and profitable. Somehow gamers just can’t seem to absorb that fact. XBOX IS PROFITABLE and business Is about profit. Revenue is important but profit is essential. And the XBOX business plays a role strategically in Microsoft’s market approach despite only being a relatively small part of their overall revenue.

    The real trends in the games business are: 1) the overall market continues to grow which helps successful,players be profitable 2) smartphone games will have the biggest market slice by 2018 3) PC is currently the biggest market slice. Console game sales are some $3 billion U.S. behind PC game sales globally and smartphone games will eclipse both very soon. Tablet game sales are a distant 4th. Dedicated handhelds are dying a quick death… not great news for Nintendo although recycling old titles in that market helps keep it profitable for a while.

    So fanboys will argue between which plastic box is best while gaming executives see the pie getting bigger but more of the growth being in other segments.

  • Giselle Brady

    Sell hope, under deliver, and TEH Cloud.

  • Mr Xrat

    Cutting out my usual biting sarcasm and being fully honest: just keep pumping out Halo and Forza. It’s the bread and butter and it’s what’s keeping Xgimps holding on for the most part. Ramp up the microtransactions and add a few more subscription programs to keep profit margins high and they could justify keeping Xbox limping along as an auxiliary.

  • Starman

    Like I thought , nothing to say with substance .. only jibberish comes out of fangirl mouth’s …

  • Starman

    PS4-Pro , PS-now, the music store… game share(for an hr , what a joke) VR , PS-plus …all failed ..facts , but all you little fangirls have to do is troll ms and xb1 ..what’s the purpose …You have too much time on your hands , but no time for your console of choice … PATHETIC..

    • J.j. Barrington

      None of that was fact.You may want to learn what a fact is.

      You know what IS fact: the PS4 and Nintendo consoles have multiple exclusives rated higher than any exclusive on Xbox in these first few months alone. People speak of Nier, Persona, Zelda, and Horizon as GOTY contenders; which new games on Xbox correspond?

  • Ocelot forgot his meds

    Lol
    Xbox live is far more profitable than PSN. More people are playing black ops 2 back compat on Xbox than there are playing any of Sony’s single player one and done exclusives. And MS is just getting started..Scorpio is mine.


 

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