Xboxmay be losing the battle on hardware sales, but it’s continuing to position itself to win the war – or, at least, to win an entirely different battle.

Recent reports indicate thatXbox Series X|S sales are lagging behind the PS5’s by approximately 12 million units. All things being equal, those aren’t great numbers for Xbox.Microsoftwould surely prefer to see the Xbox lead thePS5, and the console warriors who refuse to be normal would love to be able to have the stats to prove that their box is more popular than the other box.

two ps5s, an xbox series x and a series s

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But all things aren’t equal. Xbox’s lack of sales is a natural result of Microsoft’s pivot to a model that emphasizes subscriptions over hardware. As TheGamer’s Josh Coulson noted in his recent article on these sales numbers, Game Pass subscriptions hit an all-time high during the last three months of 2022.

This console generation, Xbox has essentially abandoned the idea of next-gen exclusives. Sure,Forza Horizon 5looks and plays a lot better on Xbox Series X where there are no loading times and increased graphical detail, but you can still play it on a launch Xbox One. Sony, meanwhile, is sticking to the old, proven business model, incentivizing players to upgrade with games that are exclusive to its new machine. Big franchise entries likeGod of War RagnarokandHorizon Forbidden Westhave opted for cross-generation launches, butRatchet & Clank: Rift Apart,Returnal,Demon’s Souls,The Last of Us Part 1,Ghostwire: Tokyo, andDeathloopwere PS5 console exclusives.

More than two years into the PS5’s life cycle, that isn’tthatmany exclusive games, but it’s far more than Microsoft has released. I wrote recently about how annoying it was thatHi-Fi Rushwasn’t natively available onXbox One. But even then, Hi-Fi Rushisplayable on Xbox One through the Cloud. It’s also playable on your phone and on certain TVs (without a console attached) through the Xbox app. Sony is sticking to a tried-and-true model for games; Microsoft is leveraging advancements in cloud technology to blaze a new trail (that really isn’t all that different from the path tech has taken since the advent of the iPhone).

The combination of Xbox Game Pass and Xbox Cloud Gaming has made Xbox an app that players can use without the need to buy new hardware. I know, because that’s how I’m engaging with Xbox at this point. I have an Xbox One S that I purchased back in early 2020, and despite the fact that I wouldliketo have an Xbox Series X, I haven’t shelled out for one because I can still play the games I want through the older console. If I can’t, I play on my PC instead. I would rather play on the couch, and I would rather have the latest hardware, and I would rather play games like Hi-Fi Rush natively, but Microsoft has given me a lot of excuses not to upgrade. Meanwhile, I knew back in 2020 that if I wanted to play Demon’s Souls, I was going to have to buy a PS5.

The numbers indicate that there are a solid 12 million people out there in a situation similar to mine. The question is whether that matters to Microsoft. Right now, it doesn’t seem like it does. It may never matter again.