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Microsoft has a problem with Xbox that it can't buy its way out of

Business Insider | Feb 10, 2018, 09.30PM IST

Microsoft's Xbox group is in a weird place.

An estimated 30 to 50 million Xbox One consoles have been sold, putting Microsoft in a distant second place in the console race behind Sony's 70-plus million selling PlayStation 4 console. And Nintendo's Switch console? It's a runaway success.

Super Mario Odyssey

Nintendo

"Super Mario Odyssey" is only available on the Nintendo Switch. Over 9.7 million copies were sold between its launch in October 2017 and the end of the year.

In under a year, Nintendo sold over 14 million Switch consoles - it's the fastest-selling console in US history. Nintendo attributes this success primarily to one thing: A lot of really good games you can only play on the Switch.

"We were able to offer multiple hit titles early on for Nintendo Switch that serve as powerful drivers for hardware sales," Nintendo president Tatsumi Kimishima said in the company's latest financial presentation.

The Xbox One, by comparison, isn't doing so great. On paper, it's competitive with or outright better than the competition from Sony and Nintendo.

Starting at $200, the Xbox One is low in price, and jammed with great games, to boot. Even the lowest-end model of Xbox One supports HDR, a high-end video technology that makes games look better on TVs that support. It does everything a set-top box like the Apple TV does, like let you watch Netflix - plus it plays high-end blockbuster games.

xbox one s

Florence Fu / Business Insider

The Xbox One S, the entry-level model, retails for a cool $199.

In reality, though, it's the console I'm least likely to suggest to any would-be buyer.

If you don't own any consoles, the PlayStation 4 has many of the same games, like the latest "Assassin's Creed," and a bunch of great exclusive games, including the critically-acclaimed "Horizon Zero Dawn."

Though the Nintendo Switch doesn't have many third-party blockbusters like "Call of Duty," it has a big edge in terms of exclusives - there's no other way to play the latest "Super Mario" games. That's a pretty big advantage.

And if you already own a PlayStation 4 or PC? There simply aren't many major Xbox exclusive games that make the Xbox One worth owning.

Playerunknown's Battlegrounds

PUBG Corp.

"PlayerUnknown's Battlegrounds" is only playable on Xbox One and PC, making it a "console exclusive."

So, what's Microsoft going to do? That's the big question.

Here are some ways they could go:

Get the latest Microsoft stock price here.

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