Consoles aren’t selling because the next-gen is coming

Consoles aren’t selling because the next-gen is coming
Credit: Microsoft

Sales of current-generation consoles are starting to drop dramatically — most likely because the next generation is on the horizon. While we won’t see new consoles until next year, it appears consumers are already starting to save their money in anticipation. The Switch, however, is the exception to this.

Microsoft yesterday revealed its Q4 fiscal year earnings, and noted console sales were sluggish: “Xbox hardware revenue declined 48%, primarily due to a decrease in volume of consoles sold.” Sony released its fiscal year financial results earlier this year, and also reported a decline in PS4 sales. While some units are still moving, it appears consumers are generally losing interest.

It was last month — during E3 in particular — that we got the most details about the next-gen consoles from Sony and Microsoft. Microsoft devoted a whole sizzle reel at their show to Project Scarlett, and Sony revealed more about the PS5. While the cynics among us (including myself) are circumspect about how they’ll perform, the hype sounds very promising. And the trade-off of making these upcoming consoles sound so good is that demand for last year’s model drops off.

The fact is, the PS4 and the Xbox One are just reaching the end of their natural lifespans. And new consoles can be fairly expensive, so it wouldn’t surprise me if gamers are saving up for the costly pre-order when they are finally, officially revealed to the world.

On the other hand, the Nintendo Switch appears to be doing just fine. According to the NPD group, while hardware sales are down overall, the Switch is still showing growth and was the best-selling console of last month and of the first half of the year.

Nintendo has always operated on a different console lifecycle than its compatriots, and the Switch was essentially the first of the “next-gen” consoles to be released.

Given they don’t have to worry about upgrading, and the Switch is demonstrably more third-party-friendly than previous Nintendo consoles, it’s a natural choice for gamers at the moment. And with the release of the Switch Lite later this year, I think we’ll see an upswing in Switch ownership. The dearth of other new handhelds means it’ll pretty much be the only option for those who want to be able to carry their consoles around with them.

Hopefully we’ll find out more about the next-gen consoles from Sony and Microsoft later this year.

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