Xbox Redefines Competition, Now Views TikTok as Its Main Rival

Xbox is completely redefining its competition. In the future, it will no longer be mainly other consoles such as Sony’s PlayStation or the Nintendo Switch, but rather TikTok and films.

Xbox fights against TikTok instead of PlayStation

Microsoft is not only revamping the Xbox Game Pass and introducing a new subscription structure, but it is also working on next-gen hardware despite rumors that the Xbox console will be discontinued after 25 years. However, Microsoft could not pursue a new strategy until the next version of the game console. This is also what the statements from Matt Booty, the head of Xbox Game Studios, suggest. The strategy aims to reach people where they are, rather than tying them to specific hardware. As part of the surprise announcement that the upcoming Halo remake “Halo: Campaign Evolved” will also be released for PlayStation 5 in 2026, Booty told the New York Times:

Our biggest competitor isn’t another console. We’re increasingly competing with everything from TikTok to movies. Matt Booty, Head of Xbox Game Studios

This realignment reflects a fundamental shift in Microsoft’s gaming philosophy. The company is increasingly recognizing that traditional console boundaries are blurring and gamers are dividing their time between a variety of digital activities.

Game Pass is stagnating despite a billion-dollar business

The realignment comes against the backdrop of stagnating Game Pass numbers. The subscription service reached around 35 to 37 million users by mid-2025, after Microsoft reported 34 million subscribers in February 2024. In the fourth quarter of 2024, sales in Microsoft’s content and services division increased by 61 percent, but hardware sales fell by 42 percent. These numbers illustrate the shift from a hardware-centric to a service-centric business strategy.

Netflix as a pioneer of the attention economy

Microsoft’s argument is reminiscent of Netflix’s statements in 2019. The streaming giant said at the time: “We compete more with Fortnite than with HBO,” emphasizing that thousands of competitors are fighting for consumer attention in a highly fragmented market. At that time, Fortnite had reached over 200 million players, while Netflix had 139 million subscribers.

The parallels between the statements from Netflix and Microsoft are clear. Both companies no longer see their competition only in direct competitors, but in everything that demands the attention of their target group. TikTok, for example, has over a billion daily active users who spend an average of 95 minutes per day on the platform.

Criticism of new strategy

While exclusive titles and hardware performance used to attract users, today availability, convenience and price-performance ratio are the focus. Xbox Cloud Gaming already enables Microsoft customers to play AAA titles on smartphones and tablets from anywhere, at any time.

However, it is questionable whether the company can use this increased availability to convince potential players to spend less time on TikTok and more time playing video games. The gaming industry is in a state of flux between traditional console competition and the fight for attention in the digital world.