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Xbox Endures Record-Breaking Decline in UK Console Sales for 2025, Down 39 Percent
January 4, 2026In 2025, Xbox suffered its worst year on record for UK console sales, with a 39 percent year-on-year drop, according to The Game Business’ Chris Dring. This marks a sharper decline than competitors, highlighting significant challenges for Microsoft’s gaming hardware division.
Xbox console sales in the United Kingdom plummeted by 39 percent in 2025, establishing the lowest annual UK sales performance recorded for the brand. Industry analyst Chris Dring confirmed, “Xbox console sales were down 39% in the UK during 2025, making it comfortably the worst year on record for Xbox consoles.” In contrast, Sony’s PlayStation 5 saw a less severe market contraction, recording a 12 percent sales dip in the UK for the same period. Major industry sources have linked the Xbox collapse both to unfavourable market conditions and strategic missteps.
Sales of Xbox consoles were down 39% in the UK during 2025, making it comfortably the worst year on record for Xbox consoles. With the return of favourite Xbox franchises in 2026, might things improve this year?
— Christopher Dring (@Chris_Dring) January 2, 2026
Key UK Console Sales Data for 2025:
- Xbox: Down 39% (worst year on record, per Chris Dring, The Game Business)
- PlayStation 5: Down 12% in UK sales (same period)
- Source: Chris Dring via social platform on January 2, 2026
US Xbox Sales See Even Sharper Decline Amid Price Hikes
While UK figures are dire, Xbox’s performance in the United States in 2025 was potentially worse: IGN reported a year-on-year drop in Xbox console sales of 70 percent in the US. Industry commentators attribute this steep fall to two rapid price increases that occurred during the year, striking a blow to consumer demand and market confidence. Although neither Microsoft nor Chris Dring provided specific worldwide numbers, the UK and US reporting shapes a clear narrative of unprecedented global underperformance for the Xbox hardware division.
US Xbox Sales Highlights (2025):
- Reported decline: 70% drop year-on-year (IGN report)
- Major factors: Multiple price hikes, intensified competitive pressure
Market Context, Strategic Shifts, and First-party Focus
All three leading console manufacturers- Microsoft, Sony, and Nintendo- experienced year-on-year declines in hardware sales during 2025, but Microsoft’s Xbox suffered by far the largest drop in both the UK and the US. The sharp decrease arrives amidst broader operational and strategic setbacks for Microsoft, with 2025 seeing thousands of layoffs, the cancellation of major first-party projects (including The Initiative’s Perfect Dark, Rare’s Everwild, and an unannounced ZeniMax MMO), and flagging sales for stalwart franchises, including Call of Duty.
Key Microsoft/Xbox Business Events in 2025:
- Thousands of staff layoffs
- Cancelled projects: The Initiative’s Perfect Dark, Rare’s Everwild, unannounced ZeniMax MMO
- Reportedly restricted marketing budgets, with Xbox not releasing a 2025 retrospective (a “2025 wrapped”-style publication)
- Call of Duty sales flagged on the platform
Historically, profit margins on gaming hardware remain slim, and Microsoft appears to be doubling down on its software business. Reports highlighted a renewed push to maximise reach and sales by releasing first-party Xbox games and the Game Pass subscription service on previously rival platforms. This pivot aims to offset hardware shortfalls and capture revenue from a broader software base.
Outlook for 2026: Xbox Franchise Revivals and Studio Updates
Despite grim hardware figures in 2025, Microsoft is signalling optimism for 2026. Matt Booty, Microsoft’s president of game content and studios, announced that Xbox will host a ‘Dev Direct’ stream later in January 2026, stating, “we’ve got more stuff coming up than we can fit in one show.” Anticipated updates include new information on the highly awaited Fable reboot, the continuation of the Forza Horizon series, and developments from Xbox’s diverse first-party studios. Industry watchers are monitoring whether these product updates and exclusive releases can help Xbox recover from a historic low.
Confirmed for January 2026:
- Dev Direct stream to showcase forthcoming Xbox titles and studio updates
- Focus on Fable, Forza Horizon, and other Xbox Game Studios projects (per Matt Booty)
Xbox remains in a precarious position as the console landscape continues to evolve, with questions persisting about its hardware roadmap and market relevance. The company’s drive to leverage software and services, combined with refreshed exclusive content in 2026, will determine whether it can claw back momentum amid stiff competition.
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