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Xbox's biggest crisis right now isn't games. It's hardware. (Opinion - Jez Corden)
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I don't think it's hardware. It's a differentiator. Tell me why I (or whoever) should pick an Xbox over a PlayStation?
Microsoft tried to answer that question with Game Pass, seemingly going all in on that concept, paying or outright buying publishers to bring their games to Game Pass. Some people may love Game Pass, but most people I know either never subscribed to it or only tested it when it was like 1,-€ for a month or whatever.
What else differentiates it from the PS5 in a positive way? Sure, the Series X is a bit more powerful than the PS5, but it's close enough that it basically results in slightly different behavior for games with dynamic resolution scaling, with the PS5 sometimes even pulling ahead oddly enough (probably a more mature SDK, not sure).
The controller is...well, a decent controller. It doesn't do anything special like adaptive triggers, yet it costs almost the same as a DualSense, and if you count in the optional (!) battery pack, it's quite a bit more expensive even.
Playing online costs just as much as on PS5 (why do you have to pay extra to play online in 2023, anyways?).
Of the few mentionable exclusive games, most are honestly just mediocre (also in terms of critical acclaim).
What's left? Backwards compatibility for 360 games? Sure that's nice, but surely not a system seller for most people, especially when they don't already have a ton of 360 games.
I just don't see many cases where someone would prefer the Xbox Series X to a PlayStation 5, without even taking into account what platform their friends are on.
If you want to win market share, deliver a better product. With better services. With better conditions. For lower prices.
That is how it works. Crying to the public about how unfair it is because Sony has such a large installed base already because of how Microsoft fucked up the Xbox One generation (at or even before launch) is NOT how it works.
The thing is, it's not even Games Pass or the hardware. For me, as a PC gamer, having an Xbox would be redundant. Anything an Xbox can do, my PC just does strictly better without a cumbersome UI and additional online subscription.
I own a PS5 for access to Sony exclusives when they launch, instead of waiting 1-5 years for the PC ports. I also get access to PS Plus' extensive classic collection and indie collections, which, regardless of the price of the subscription, broadens my gaming library extensively--something Xbox simply doesn't do.
Why would I purchase a console that only gives me access to the same games on a worse system vs a console that expands my library considerably?
The console experience is different enough though. I have a PC I can game on with no issue, but I rarely do, because i love my sofa, my LG OLED and my soundbar. At the end of a tiring working day, after taking care of my chores, putting the kids to bed, I just can't get back to the computer, especially if I had to use it all day long for work...
But, at the end of the day, it's all a matter of preference: do you like PS 1st party kinds of games? Go for PlayStation. Are you more eclectic? Go for Game Pass. Your kids want a potent enough machine for Roblox and Fortnite? The Series S is there for you. Do you travel a lot? Go for a Switch or a Steam Deck (loving mine btw).
Plus, the ultimate question: How much does a PC/a console or a new game cost in your country?
Those are the days I Miracast my PC to my TV and curl up on the couch with a wireless controller.
My soon-to-be 7-year-old has a Switch that fits his Minecraft / Pokemon / YouTube needs, and I have my PS5 for exclusives that don't have a PC port yet (I'm currently playing through FFXVI, for example.
I currently live in the States, so any average price you look up in USD will apply. I built my own PC, I purchased my PS5 on sale, and I will build myself a new PC when my son is old enough to be trusted (under supervision) with my current PC, if any of that matters.