Microsoft's Xbox update fails to keep up with leaked roadmap

Microsoft unveiled three new Xbox models yesterday at Summer Game Fest 2024, but anyone who's been following the barrage of leaks over the past year may have been surprised at how little has changed for this mid-cycle refresh.

If you haven't been following the trial between the FTC and Microsoft over the past year, things went pretty well for Microsoft and ended with the company acquiring Activision Blizzard. One thing that didn't go so well was the editorial side of things. The court filings included a wealth of internal documents, including one about the future of Xbox – or at least a possible future that Microsoft is considering in May 2022.

Xbox boss Phil Spencer told the FTC in October 2022 that the “Roadmap to 2030” document was “a presentation from our device organization to the gaming leadership team,” and said he disagreed with some of the projections. The slides outlined the team's plan for its mid-cycle console refresh, codenamed Fairhaven, and its next-gen console. Essentially, then, a pitch deck that included some things that were definitely happening and others that needed funding to become a reality.

Let’s look at what was (not) announced:

Chronologically, May 2024 should be the debut month for Sebile, the codename for a brand new controller. Sebile should ship with new wireless technology, referred to in the document as “Xbox Wireless 2.” Even more exciting for gamers, it would also feature advanced haptics like the Switch and PS5 controllers, as well as a Stadia-like direct cloud connection to reduce input latency in Xbox Cloud Gaming.

Then Xbox's big 2024 summer show (which, in the real world, took place yesterday) was supposed to bring a pair of new Xbox consoles. First, a cylindrical Xbox Series X redesign codenamed Brooklin, which was supposed to be a $500, 2TB, all-digital machine with WiFi 6E, Bluetooth 5.2, and a Sebile controller. Second, Ellewood, a $300 Series S refresh with 1TB of storage, with the same improved wireless connectivity and the Sebile controller, but without the major redesign.

The document noted that all three devices were “funded,” but also listed two contingencies: one that would “limit Fairhaven's investments” and another that would realize “Fairhaven's full vision.” The first would limit the new controller's features and cloud connections, but would reportedly include a new industrial design.

Fast forward to Summer Game Fest 2024, where it seems we didn't get to see either of those two future scenarios. We already thought the Series S wouldn't be updated, as Microsoft has been selling a 1TB version for $350 since last fall. But Microsoft's vision for the Series X was unclear, and we ended up getting a rather odd pair of configurations: a 1TB all-digital Series X console for $450, and a 2TB special edition Series X with a disc drive for $600. If there's improved wireless connectivity, Microsoft didn't mention it, and we haven't heard anything from Sebile at this time; the new consoles were announced with standard Xbox controllers.

These are good updates on their own, but Microsoft found itself in the unenviable position of having to compete not only with Sony and Nintendo, but also with itself in the form of these leaked plans.

A $450, all-digital 1TB console and a $600 2TB special edition are disappointing compared to Brooklin, the $500, all-digital 2TB console with a shiny new controller that the leaked deck touted. The $450 console is almost a price hike, as Microsoft and third-party retailers regularly sell the original 1TB Series X at that price. (It's worth noting that Sony actually raised the price of the PlayStation 5, with the disc-less model costing $450, rather than the $400 it cost at launch.) The $350 1TB Series S is essentially the same console we got last fall, but even that's a poor value compared to the leaked $300 reissue.

Plans change, especially plans dated May 2022. But how they change can give an idea of ​​what Microsoft thinks about Xbox right now. In 2022, Series X and Series S sales largely kept pace with Xbox One. That's no longer the case. Estimates put the total number of Xbox Series consoles sold since launch in November 2020 at between 28 and 29 million. Even in the US – Microsoft's strongest market by far – Xbox Series consoles are 13 percent behind Xbox One, according to retail analyst Circana.

One particularly telling slide in the May 2022 document predicted that 25 to 29 million of the mid-cycle consoles could be sold in three years. As of today, that would mean more than doubling the platform's total sales. At the time, Microsoft's hardware team probably didn't expect sales to be as dismal as they are now. Microsoft ended the last console generation with around 58 million Xbox One consoles sold, a significant drop from the more than 85 million Xbox 360 consoles it sold.

Microsoft doesn't talk about console sales numbers unless it has something positive to say, but third-party analysis suggests that a typical week for Xbox in 2024 will see 60,000 to 80,000 consoles sold, with Nintendo doubling that number and Sony often tripling it. Simply put, Xbox is falling further behind every week. It's unlikely we'll find out what Microsoft's expectations are for the updated consoles, but it's probably not 25-29 million.

The difficult thing for the Xbox team is that Sony and Nintendo are, by and large, going their own way and doing pretty well at it. Sony has sold 58 million PlayStation 5s and is preparing to launch a Pro variant that will be significantly more powerful than the Xbox Series X. The company is also opening up to releasing on PC and just announced a game coming to Nintendo Switch. Nintendo has sold over 140 million Switches, regularly outsells Xbox, and has announced a successor console that can presumably handle current-gen games (including Call of Duty!) with fewer compromises. Meanwhile, Microsoft is struggling to sell its existing consoles, failing in its plan to boost Game Pass subscriptions, and seemingly dashed its hardware team's dream of a bold mid-cycle refresh.

One thing that does exist is game developers making games. Disappointing new console SKUs aside, Microsoft's big Summer Game Fest was a reminder of how much of the industry it now owns and how many games it currently has in development. We have updates on fable, Perfect darkness and the future of Gears of War. We have a new Call of Duty and a new Doom. There are still countless developers under his wing who do not have an “announced” project, and big games that were previously announced but never came out, like Marvel's Blade by Arkane Lyon, The Outer Worlds 2 of Obsidian, Everwild by Rare and Hideo Kojima Revised. Microsoft's game studios have a lot to offer, but since all of their titles come out for PC (and some for PlayStation and Switch), great games on consoles are unlikely to translate into big sales.

Phil Spencer has commented on last year's leaks a few times. He tweeted almost immediately that “so much has changed” – which was clearly true, though perhaps not for the better. Separately, he said something pretty crazy in court about Microsoft potentially getting out of the gaming business if Game Pass didn't achieve a better player mix by 2026 or 2027. Game Pass' growth has slowed significantly since February of this year, so… uh-oh?

I don't believe for a second that Microsoft would spend the better part of $100 billion on developers to get out of the gaming business, but I firmly believe that the company's console business is artificially kept alive and it doesn't need shiny new hardware to make a ton of money from gaming. The gaming leadership team, to which Sebile, Ellewood and Brooklin were presented with the idea in May 2022, clearly thinks so.

Stay up to date with all the latest news from Summer Game Fest 2024 right here!