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Was Microsoft’s biggest E3 2016 announcement a huge mistake?

Published Jul 21st, 2016 6:00PM EDT
Xbox One vs Project Scorpio

Having struggled to keep up with the PlayStation 4 for nearly three years, Microsoft knew it was going to have to bring the big guns to E3 2016. Rather than just announcing new games and peripherals, the company actually announced not one, but two (2!) new versions of the Xbox One console last month.

On paper, this sounds like a surefire way to reinvigorate a fan base. In reality, it might have unintentionally stalled Xbox One sales.

DON’T MISS: Xbox One S launches on August 2nd for $399

Let’s go back in time for a moment.

It’s the morning of June 13th, and Microsoft has officially unveiled the long-rumored Xbox One S. Scheduled to launch in August, the Xbox One S is 40% smaller than the original Xbox One, comes with a brand new Bluetooth-enabled wireless controller and provides HDR support for Xbox One games.

Less than an hour later, Microsoft one-ups itself with the reveal of Project Scorpio — a 4K-capable, VR-ready Xbox One console that will be on store shelves before the end of 2017. New hardware is always the most exciting part of E3 2016, but based on the latest financial reports, these announcements might have backfired.

According to Eurogamer, Microsoft’s gaming revenue decreased by 9% in the fourth financial quarter of 2016 (ending in June) while Xbox hardware revenue dropped by a precipitous 33%. Microsoft says that this was due both to the lower cost of the Xbox One console itself and declining sales.

Best case scenario: Microsoft makes up a chunk of the revenue it lost last quarter with a massive windfall in August due to the launch of the Xbox One S.

Worst case scenario: Gamers decide it’s probably best to wait for the upgraded Scorpio console, and Xbox One sales continue to stagnate throughout 2016.

Jacob Siegal
Jacob Siegal Associate Editor

Jacob Siegal is Associate Editor at BGR, having joined the news team in 2013. He has over a decade of professional writing and editing experience, and helps to lead our technology and entertainment product launch and movie release coverage.