Nobody has made a decision not to buy an Xbox because of the existence of Series S. They've not bought Xbox because:Shrug. seems like decently positive results to me.
It has occurred to me recently and a poster stated it here, I think it's likely Satya ordered Xbox not to take hardware losses this holiday. It definitely wouldn't have been Phil's call to say that. Phil would want to maximize his division and it isn't his money.
I'm not really sure the long term thinking there. We can try to understand.
It's become clear for a while, Microsoft is going to be a REALLY big publisher even while Xbox hardware is struggling. I dont necessarily know what their strat is. Perhaps a windows protection play?
It should be obvious that being multiplatform offers a sustainable level of software success that even one core console+PC cant match (while thats the second best option)
Phil is very right that all the most played games are multiplat (or as he called it I believe "on any screen"). I've been saying it for years. But how this all ties into Xbox hardware, which is clearly going forward next gen as has been confirmed multiple times, is a bit unclear.
It will be extremely interesting if Xbox sales begin to recover while all their games are multiplat. It would validate a lot of things I've said for years. However, it will be difficult to find hardware success this gen due to (IMO) Series S and apparently, a lack of subsidizing hardware going forward.
I havent had trust in Phil in a while now, but his most recent comments I found very sophisticated and I could see myself drinking the Phil kool aid to some extent again soon. I just dont think he ever understood how damaging the Series S was, but tbf almost noone does. Combine all that with a big slate of good games hitting GP right and left recently and in 2025. Even as I'm on record not believing in the GP model for gaming.
1) their market presence outside of the Anglosphere is very poor and Xbox have made no attempts to mitigate that (for 2 consecutive generations). Playstation's improved performance in the Anglosphere (caused in part by the group of high profile American studios now driving PS) is therefore clawing away MS' one competitive region
2) their 1st party software production has been disastrous from day 1 (Halo Infinite delay on the eve of a hardware launch, Forza Motorsport and Redfall's abysmal launches, Starfield's underperformance)
3) Their digital services offering was their one unique selling point and both PS/Switch have now established services offerings of their own, and Steam now completely owns the "enthusiast services" featureset while offering Xbox' own games. Meanwhile they've offered 1 new unique product (gamepass) and abandoned its unique selling point to reduce it to an Xbox-branded version of PS+ tiers
As long as Microsoft's leadership refuses to allow hardware investment on the level of Xbox/Xbox360 again, Xbox definitionally cannot compete on the level of PS/Switch. The last 2 generations have completely wiped out any gains made by X360 and they're arguably in a worse position than the end of the original Xbox generation. Bowing out of hardware is a situation Microsoft's leadership is causing to happen as long as they're in this penny-pinching mode following the Activision purchase. I personally think it's incredibly wasteful because there is certainly a gap in the console market that someone is going to step into and absorb those 30% royalties (probably Sony/Nintendo/Valve between them rather than anyone new) - and establishing a position in the console market is incredibly difficult to achieve.