The golden era of video-game console sales is over

Boxed out.
Boxed out.
Image: AP Images/Casey Rodgers/Invision for Microsoft
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On Wednesday (April 20), Microsoft announced that it will stop manufacturing the Xbox 360, the games console it first released in 2005. In the last 11 years, it’s sold at least 84 million units, according to GameSpot, making it the most popular console Microsoft has released—by quite some margin—as well as the fourth-most popular home console of all time.

Only the first two Sony PlayStation consoles, and the Nintendo Wii, a console that challenged the concept of how people play video games, and who plays them, have shipped more units than the Xbox 360.

Microsoft’s follow-up console, the Xbox One, has not sold nearly as well as the 360. In 2008, less than three years after it was launched, the company said the 360 had sold over 19 million units worldwide. The Xbox One was released in 2013, and has sold about 10 million units in roughly the same amount of time as its predecessor.

It’s possible that Microsoft is discontinuing the decade-old Xbox 360 because it’s working on its follow-up to its current console, and doesn’t want to be selling three consoles simultaneously. The Verge reported April 19 that Microsoft may also be working a new version of the One, as well as a follow-up device.

It does seem, to some degree, that the golden age of home video-game consoles may be over. The previous generation of consoles was the last generation that didn’t have to contend for users’ time with mobile games. And you could make a strong case that a large portion of the casual gaming audience that Nintendo attracted for the Wii was almost entirely wiped out by mobile gaming. After all, the Wii was released in 2006—a year before the iPhone launched. Nintendo’s next console, the Wii U, has been the company’s worst-selling of all time. The average consumer may now feel more inclined to just pick up their phone and play Candy Crush or Temple Run than to get up and swing a controller around.

The home console’s saving grace could well be virtual reality. Just about every major tech and video-games company is working on a VR headset—apart from Nintendo, it seems—and early reviews of Facebook’s Oculus Rift and HTC’s Vive headsets have reduced non-gamers to tears. None of the top 10 most popular games consoles of all time have been released in the last 10 years, and VR may well be what turns the slowing console market back around.