Xbox Is Losing the Console War—but That’s a Good Thing

First off, let's get one thing straight: The "console wars" don't exist. The idea that Sony's PlayStation and Microsoft's Xbox are engaged in some kind of dogged winner-take-all battle is both outdated and toxic. It lets fans indulge in the idea that they're noble partisans, which in turn gives them an excuse to say offensive things about their so-called opponents. The videogame market is a big one and has more than enough space for multiple game devices from multiple manufacturers.

That said, if there were console wars, the Xbox One would be losing—but that's not a bad thing.

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As far as anyone can tell, the Xbox One is currently getting outsold by Sony's PlayStation 4. (Eventually, the Nintendo Switch could lap both of them, but Nintendo's goals are so far removed from the "core gaming" market it seems unreasonable to force them into this race.) It's hard to tell for certain if that's true since Microsoft is being tight-lipped about Xbox sales numbers, but based on information from videogame publishers, it seems as though the company is trailing Sony by a fairly large margin. And from Microsoft's perspective, being outsold certainly matters. It informs the company's strategy and affects its profits. But there are benefits to second place. Or, at the very least, opportunities.

We've been here before. This time during the last console generation, the story was flipped. The PlayStation 3, after launching at an outrageous price and undergoing heavy criticism for its hardware design and controller limitations (no vibration?!), failed to capture a market share competitive with Microsoft's Xbox 360. So what did Sony do? It got creative.

If past is prologue, it would seem being in second place has a paradoxical effect on consoles: without the scrutiny of the largest audience possible, there's less pressure from fan bases to stay the course, which offers an opportunity to try new things. At the same time, the perceived failure of the product requires experimentation in order to find ways to capture a lost audience.

For the PlayStation 3, that meant ventures like PlayStation Home, a Second Life-esque social platform that was meant to be the backbone of its online service, or the PlayStation Move controllers, a clear attempt to marry the populist appeal of the Wii with the structures and audience of a hardcore gaming console. Neither of those experiments were exceptionally successful, but they were interesting, and in the Move's case helped to build a backbone of existing hardware that would allow Sony's later foray into VR on the PlayStation 4.