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How's Xbox Doing? Here Are The Big Takeaways From Microsoft Earnings

Big numbers for Xbox.

114 Comments

Microsoft today reported earnings for the quarter ended March 31, and the company's Xbox division posted strong numbers. The Xbox business saw revenue rise 18 percent to $2.25 billion, led by gains in software and services, not hardware. Software and services posted gains of 24 percent, and importantly, Microsoft said this was driven "mainly from third-party title strength." It's notable because it shows Microsoft can have a successful quarter, even when it relies on games made by other companies. Microsoft's Sea of Thieves was released on March 20, so it is counted within the quarter, but only for a few days. Still, it's interesting that it's not mentioned in Microsoft's report today, as Sea of Thieves quickly became Microsoft's fastest-selling new IP on Xbox One.

The company's fortunes may improve further still when some of its own big games come out later this year like State of Decay 2 and Crackdown 3, as well as whatever might get announced at E3 in June.

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Now Playing: Most Anticipated Exclusive Games Coming To Xbox One In 2018

State of Decay 2 launches in May
State of Decay 2 launches in May

Additionally, Microsoft announced that the number of "active" Xbox Live users rose 13 percent to 59 million for the quarter. Microsoft said Xbox Live posted "continued growth" across Xbox One, Windows 10, and mobile when it comes to Xbox Live.

Microsoft's Xbox business unit is part of the company's More Personal Computing division, which also includes Windows Commercial and Windows OEM and Surface. The More Personal Computing division posted a revenue gain of 13 percent. Microsoft overall--comprising all divisions--posted revenue of $26.8 billion (up 16 percent) and a profit of $7.4 billion (up 35 percent), so it was good times all around for Microsoft this quarter.

The next big event for Xbox is E3, which takes place in June. Microsoft has big plans for this year's event, and we're sure hoping to see the next Halo and lots more.

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GIO-007-XBL

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The change of the guard is bearing it's fruit. I must admit, Phill Pencer has done an exceptional job with the Xbox division. Also credit should go to Satya Nadella for changing the culture at MS. I'm looking forward to the new Linux based Windows OS just like the rest of you who read the press release.

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kgsg-19-2

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That's good to hear, thank you MS and others for good earnings, just hopefully might save the market under Dump.

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AlexOfBurg

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pretty impressive, can't wait for E3 I love watching all 3 big companies and seeing whats in store for me.

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Xristophoros

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Edited By Xristophoros

x1 hardware sales year over year are in decline by substantial margins i would guess. even sony's year over year total has dropped by 1m units or so and sony is far more successful than microsoft (goes without saying). it would be easy to see x1 sales dropping by 2-3m units per year from here on out.

microsoft has not given gamers many reasons to purchase an x1 this generation... its response to its mistakes is to give people backwards compatibility, as if that is enough to make up for the lack of games THIS console generation? not to mention, a very small number of people actually care enough to play games from the xbox or even the 360 era in the first place. just a giant step backwards for the xbox brand no matter how you look or think about it.

how does microsoft intend to correct this next console cycle? what reason do people have to trust microsoft again with such a poor showing with the x1? i think many people who left for sony will not be going back as they are having the time of their lives on ps4 and will do so again on ps5. in any case, microsoft has a lot of work to do if it wishes to be competitive again.

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XenomorphAlien

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@Xristophoros: Like anyone cares what you of all people think about Xbox lmao

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emptycow718

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@Xristophoros: what do you think is going to happen when everyone has a 4k tv when GTA 6 comes out and the xboxone x has a price drop ? The xboxone x is just getting started. Just watch when microsoft shows halo 6 built from the ground up for the one x. I cant wait for the jaws to drop at e3

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emptycow718

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Edited By emptycow718

@Xristophoros: horizon is a over rated tomb raider clone. The best games sony put out in 4 years is god of war and uncharted 4. Sony fanboys love to think sony has better exclusives but when you really look its microsoft who has a stronger line up of first party games in almost every category lets see. quantum break vs detroit, killzone shadow fall vs halo 5 ,gears 4 vs uncharted 4 .god of war vs ryse ,gt sport and drive club vs forza horizon 2,forza 5,forza 6,forza 7 .knack vs recore ,ratchet and clank vs sunset over drive. Are you starting to see how stupid the " Xbox has no games or exclusives " sounds ? I'm not even going to add in the awesome 4k patch for red dead redemption or the best version of bayonetta outside the pc version. Xbox has games you sony fanboys just like to bash the xbox to make you feel better about owning only a ps4.

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drodriguesaar

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@emptycow718: "god of war vs ryse"

LMFAO

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ssdd_again

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@Xristophoros:

[console I don't like] hardware sales year over year are in decline by substantial margins i would guess. even [company name I don't like] year over year total has dropped by [big number I just made up] units or so and [company I do like] is far more successful than [company I don't like] (goes without saying). it would be easy to see [console I don't like] sales dropping by [big number I just made up] units per year from here on out.

[Company I don't like] has not given gamers many reasons to purchase an [console I don't like] this generation... its response to its mistakes is to give people backwards compatibility, as if that is enough to make up for the lack of games THIS console generation? not to mention, a very small number of people actually care enough to play games from the [console I don't like] or even the [console I don't like] era in the first place. just a giant step backwards for the [console I don't like] brand no matter how you look or think about it.

how does [company I don't like] intend to correct this next console cycle? what reason do people have to trust [company I don't like] again with such a poor showing with the [console I don't like]? i think many people who left for [company I do like] will not be going back as they are having the time of their lives on [console I do like] and will do so again on [the next version of the console I do like]. in any case, [company I don't like] has a lot of work to do if it wishes to be competitive again.

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NativePixel

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@Xristophoros: who are you talking to? It just seems like your just having a convo in your head. There is no PROFIT in selling hardware. It's services that make PROFIT. Sony could sell as many consoles they want but if there is no continued engagement and service, then there is not profit

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Xristophoros

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Edited By Xristophoros

@nativepixel: you're wrong, actually. ps4 hardware was profitable since its first year on the market. as time goes on and components become cheaper, profitability of the hardware steadily increases (typically). you must be confusing the ps4 with the launch models of ps3. your ignorance on this issue is clear to see. you also failed to realize that more hardware sold equates to a larger user base which in turn results in more software sold and a greater number of subscribers. everything is related and not isolated like you think it is.

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bartonaa

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@Xristophoros:
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Edited By skektek

Microsoft doesn't have an "Xbox division", they have an "Entertainment division" that comprises their gaming ventures (which includes Xbox). Rolled into their "Entertainment division" are their Android royalties (probably from FAT patents) which have been as high as $2 billion a year. With this additional padding it is impossible to guage the health of the Xbox brand from division revenue alone (this is probably by design).

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Vegeta-sama

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@skektek: you are incorrect this hasn't been the case since the last reorganization

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DaVillain

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DaVillain  Moderator

Outstanding for Xbox One revenue.

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deactivated-5d14bade6a0c4

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I own every console (except the Switch since I already own its best games on Wii U). Xbox One is the best console I have ever owned. It has the best controller and online services. It has the best apps. It plays many of my 360 games and now is adding my ORIGINAL Xbox games with updated res and fps. Many of the Xbox Live Arcade games I purchased on 360 are popping up in my Xbox One library at no charge. It HAS exclusives and plays all the new 3rd party releases and since mine is the X the games perform the best of any console. I love that when I buy a game like Battlefront 2 digitally that my kid can download it and we can play online together from separate tvs without having to buy the game twice. I am predominately a PC gamer. I understand the argument that PC has all of the games the Xbox One has including console exclusives. The only Xbox One game I can't get on PC is the Halo MCC. But then, my Xbox One plays Red Dead Redemption and my PC can't (unless I subscribe to Playstation Now). Playstation 4 is a great console. I've really enjoyed playing Horizon and God of War, but I have tons of PS1, 2, and 3 games as well and PS Store purchases made for the 10 years before the PS4 came out. The PS4 doesn't offer any BC. That is why I have 8 games on the PS4 and 330 games on the Xbox One. I wouldn't trade my PC for any system, but if I could only have one console it would be the Xbox One X.

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AlexOfBurg

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Edited By AlexOfBurg

@Defender1978: yeah im' in at over 700 on my xbox, 39 on ps4 and 9 on switch

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Xristophoros

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@Defender1978: wait, it is the best console you have ever owned partly because it plays all your favourite xbox and 360 games? let us gloss over the fact that the x1 has the poorest output of exclusives of any xbox platform ever. but, partial backwards compatibility makes up for the poor showing of games THIS console generation? that is possibly the strangest defense i have ever seen.

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AlexOfBurg

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@Xristophoros: 99% of us have about 95% multiplats in our libraries. I go where the best place to play them are. Just as I did the PS4 before XB1X

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deactivated-65d35eb4921a1

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@alexofburg: Pulled these numbers right off your ass, I assume.

I know I opted for PlayStation because of its amazing exclusives. And so did most of my friends, for that matter.

You see, we adults with jobs and family and all that shit have very busy schedules with narrow windows for gaming. I love VGs and consider myself a hardcore gamer, but I only manage to play like 3 or 4 games per year and I like to take my time with them.

Looking back this generation I can confidently say that Sony exclusives have taken most of my time by far. And gladly, since games such as Bloodborne, Uncharted 4, Horizon and GOW are simply a step above any multiplat. IMHO, of course.

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AlexOfBurg

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@gfantini: you are the 1% buddy. Most people have libraries with hundred of games and as i said. Most are multiplats, aldo assuminh i am a teen is foolish as i am 33 , married with 3 kids and own a 300k home with all 3 consoles and over a thousand games combined. So yeah, "we" adults arent all the same. Good day sir

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deactivated-65d35eb4921a1

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@alexofburg: Dude, you ARE 16.

Maybe (just maybe) not chronologically, but definitely mentally.

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AlexOfBurg

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@gfantini: Whatever helps you sleep at night pal

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Xristophoros

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Edited By Xristophoros

@alexofburg: you are underestimating the power and influence of exclusive software. the majority of my favourite ps4 games are either 1st party exclusives, 3rd party console exclusives (also on pc), or 3rd party ps4 exclusives. for ps4 and switch owners, exclusive content is integral to the success of the platform. for xbox, not so much since exclusive content has always been lacking on xbox platforms. it has hit an all time low, however, and is concerning.

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NativePixel

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@Xristophoros: lol "you are underestimating the power and influence of exclusive software" Who talks like that? ???? he has a ps4 ???. The only peopele who are this obsessed and concerned about who games on what plastic box are broke simple-minded adults and kids.

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solidsolo

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@Defender1978: who has room for a PC anyway nowadays? i got rid of my PC years ago... taken over by iPads and such. Consoles are perfect

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Pyrosa

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Edited By Pyrosa

@solidsolo: 90% of my PC gaming has migrated to my laptop. My work demands high-perf laptops each year, so only games like TWWH run like crap. It's the box that's with me when I travel.

100% agreed w/most of what Defender said above. XOX (definitely not the 2014 model XO) is the best console I've ever owned. It's my 4K BluRay player. I have over 1000 games installed, ready to install, and/or on discs now BC from prev two gens and current gen. It's usually my multiplat, but sometimes PC for that too. Most importantly, it's my family gaming platform thanks to MS's amazing family account services. My 4-year-old can likely beat you at Fortnite and/or PVZGW2. ;)

Oh, and my old 2014 XO is also my gamedev test box, thanks to MS's amazing Dev support. Instant Devkit.

BUT... Every single gamer also needs a PS4, whether Slim or Pro, new or used. You CANNOT miss Bloodborne, Horizon, GOW, or Nioh. You just have to play these games, even if used / borrowed.

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jagdedge124

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It's almost eery that i just had this conversation with a fella last night at IGN before turning in. I own both systems, but speaking to my PS friends, i think they were getting a bit too cocky.

Xbox makes a fortune, but it's not necessarily thru games. Given their diversified business, they can make money in what Sony could never, given their Microsoft bonafides, and relationship with apps and Windows.

Which is to say, Sony can sell you a bushel of apples for 20 bucks. Microsoft could sell you a half bushel for the same. Of course Sony sold more apples, but Microsoft made more money, that they can put towards other things for their customers than just apples.

So, if i'm going long ball with investments, i'm going with Microsoft, being they can accomplish much more things, given the monstrous size of their business and how diversified it is as compared to Sony.

In short, Microsoft is too big to fail, and they may not see any reason to have to come with Exclusives, if that's not where the money is.

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deactivated-65d35eb4921a1

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@jagdedge124: Well… not really. Huge mammoths have fallen before, and Microsoft is resting on their past laurels. Yes, it grew to become too big to fail… all of a sudden. But it has been digging its grave for a few years.

It all started a couple decades ago when MS was late to the internet party. Linux rose, and MS never managed to become the obvious choice for internet infrastructure. Then the iMac happened, and Windows steadily lost its absolute dominance in the PC space. And as mobile became the number one device for personal computing, MS saw its efforts in that space go completely awry.

Not to mention… AWS is killing Azure, Google Docs is murdering Office, Steam and Apple Store and Google Play are crushing MS Store and obviously, PlayStation is destroying the Xbox. Wherever I look, I see MS slowly fading away. Sure, they have the means to revert some if these tendencies or even become something else, fight other battles. But I just don't see that happening. MS is too slow… they always seem late to the party.

Don't get me wrong, I'm a big Microsoft fan. I love Windows, I use Visual Studio, I code in .NET, I prefer SQL Server and gosh, I even owned a couple Windows Phones. But I can't help the feeling I'm being the underdog. I don't know man, but I look at the likes of Google, Amazon and Apple and I just don't see MS succeeding in the 21st century.

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GarySan

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@jagdedge124: it is also the way I see it despite being a PS fan. They are simply too big to fail and don’t have to take any risks.

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Kyrylo

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Honestly Xbox one is one of the most pointless consoles ever made. If Microsoft come to their senses, they will kill console, dissolve division and concentrate on online store / game making.

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pmanden

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Edited By pmanden

@Kyrylo: Kill xbox? No way! Imagine a console world with only Sony and Nintendo. Boring. No thanks. I am grateful Microsoft entered the console world after Sega gave up their hardware business.

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Kyrylo

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@pmanden: Than at least we may get new competition that actually tries to add diverse games instead screaming "how it's console more powefull", because it can't do anything else. Back in sega vs nintendo era, both had diverse library. Xbox nowadays is just overpriced PC extention, that honestly pointless.

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pmanden

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@Kyrylo: Agreed. The Sega/Nintendo war was more fun. I loved the Sonic/Mario war.

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dlCHIEF58

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@Kyrylo: This is the most pointless and clueless comments ever. Next!

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Pyrosa

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Edited By Pyrosa

@Kyrylo: LOL... I recommend applying for a job there. Be sure to tell them that during the interview.

"I have this great plan where you guys forfeit $2.25B of quarterly revenue, plus the majority of your access to home entertainment user data."

Really go apply that MBA, chief.

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Kyrylo

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Edited By Kyrylo

@Pyrosa: and spare tons of money on producing garbage hardware that fails to top any of it's competiton? yep

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solidsolo

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@Kyrylo: you should be a Microsoft exec with pearls of wisdom like I just read

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Kyrylo

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@solidsolo: you don't need to have any wisdom ot be xbox exec.

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nedrith

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When the consoles first launched I was like, I'm getting a PS4 first and then Getting a Xbox one in a year. There were a few good exclusives back then. Then most of the good exclusives came to PC, and Xbox One really never replaced many of them. There are very few games to be excited over getting a Xbox 1 for. Not enough to warrant buying a new console.

I recently purchased a 4K tv and honestly even though the PS4 pro won't look as good on it, it's still probably a better value for my money than the X1. Slightly better looking games for my old PS4 games if I replay them + better looking games for future PS4 exclusives while still maintaining the third party support.

Waiting on E3 though before making a decision.

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pmanden

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@nedrith: I am in the same situation as you. I own a PS4 and will either buy a pro or an xbox one x. I'm inclined to buy the xbox one. Otherwise I will miss out on Sunset Overdrive, Gears of War and Dead Rising 3. I'll also wait for E3 and then decide. I'm not going to wait for PS5, however. I highly doubt that it will be much more powerful than the xbox one x.

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Pyrosa

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@nedrith: If you watch movies, there is simply no comparison between a 4K BluRay (for content originally recorded in that format) any anything else.

Add in GamePass w/the XOX, and you have the best of both worlds. No need to choose.

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walbo

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@nedrith: I see where you are coming from but if you already have a ps4 then why not go for the x.the pro is really underpowered than the x so a pro would be a pointless purchase.I olso spoiled myself wit a 4k tv so got an x.I have 144 games on it compared to 8 on my ps4.I'm not sure how close the specs are between the s and the pro but I have a s next to my x to play with my son since splitscreen gaming is dead and the difference between the two is massive so would imagine the same would be with the pro.

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ilukey40

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Edited By ilukey40

@walbo: sadly Xbox fails on great exclusives atm plus so many due on the PS4 by the end of the year I'd be waiting for e3 and a possible PS5 announcement.. I've got the Xbox one x and I do buy games for it but with such a lack of exclusives it's quickly becoming a boat anchor!! PlayStation drops the PS5 and bye bye Xbox one x!

Can't say I'm impressed with ms atm either I don't spend $650aud to play 360 games I spent that to play the best of the best and it is graphically but everything else is just waste of money no exclusives and honestly it's not that much better than PS4 horizon zero dawn looks amazing god of war looks amazing far cry 5 on my Xbox one x doesn't look that much better fact remains Xbox just sucks in solid great exclusives

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walbo

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Edited By walbo

@ilukey40: yes I suppose with me using Xbox as my main console since the start of the gen I don't notice as bad so I benifit from have a massive library of multiplats for the x (144) I only have 8 games on my ps4. (Only use it for exclusives).

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