During the Kinda Funny XCast interview before the Xbox "not E3" event in June, Microsoft Gaming CEO and Xbox lead Phil Spencer conceded that the division couldn't "out console" Sony PlayStation. Sony's lead in the so-called "high-end" console market has extended to 2:1 according to most reports, and could conceivably extend further still to 3:1 in the coming years based on current trends. Indeed, Microsoft's Xbox hardware output was down 13% year-over-year in its quarterly earnings, although services like Xbox Game Pass and an expansion into PC gaming have helped keep Xbox in growth overall.
I wrote an article a little while ago noting that with Xbox's focus on its huge Activision-Blizzard acquisition, Xbox cloud gaming, and PC, the Xbox console experience is suffering. Development on the Xbox console dashboard has slowed to a snail's pace, and many fan-requested improvements have simply not been implemented, although we have seen a trickle of new features for things like Discord and the like. Meanwhile, Sony is plowing ahead with a much-expected 2024 redesign of its PS5, ahead of a more powerful PS5 Pro for 2024 or 2025. From what I've heard, Xbox is not exploring a major power revision for the Xbox Series X by comparison, and will likely complete the gen with only minor refreshes like the Xbox Series S Carbon Black — although I wouldn't call that confirmed information as of right now.
