Halo on PS5 isn’t really shocking, but fans could be right to bemoan the death of Xbox exclusives

This weekend, in the eyes of many players and industry pundits, Xbox as a console business officially waved its big white flag.

The announcement of Halo for PlayStation 5, in terms of megaton gaming headlines at least, is as gigantic as it gets. Seeing Bungie’s community director, wearing a PlayStation t-shirt, proudly proclaiming Xbox’s historic flagship series will be on PS5 “going forward,” is as dramatic an image as nearly anything I can remember covering, since Sonic the Hedgehog first strutted onto a Nintendo platform in 2001.

Except, it’s not really that shocking. Despite the (now dubious-sounding) promises Microsoft’s executives told fans last year about their initial intentions, the evidence has long been mounting that Xbox is finished as a traditional platform holder that keeps its first-party games exclusive to its own console hardware.

After the infamous “just four games” reveal early last year, in which CEO Phil Spencer insisted its announcements of a range of PS5 ports were “not a change to [Xbox’s] fundamental exclusivity strategy”, the floodgates opened. By the time Indiana Jones and the Great Circle, Forza Horizon 5, and Gears of War: Reloaded had been released for PS5 earlier this year, you’d be hard pushed to find anyone who genuinely believed any significant form of console exclusivity had a future under this Microsoft leadership.

So why has there been such an emotive reaction from many Xbox players to this weekend’s announcement? Understandably, for many hardcore fans, Halo represented a historical red line that’s propelled them further along the spectrum of grief, from denial to anger. For much of two decades, the shooter series represented the number one reason to purchase Microsoft’s box over rivals. Without Halo, it’s debatable whether Xbox would exist at all. If Halo can release on PS5, anything can.

Of course, this sentiment is stuck in the past. Although Halo is, and forever will be, associated with the Xbox brand, it’s since been well eclipsed in importance by other Microsoft-published games like Forza Horizon, Minecraft, and Call of Duty – all of which are already available on PS5. And Microsoft’s gaming business has quickly benefited from its shift away from hardware to a multiplatform strategy, with many of its games now topping the PS5 sales charts.

But just because Microsoft’s graph is going ever more skyward, it doesn’t mean it’s irrational to bemoan the death of Xbox exclusives and question whether there will be downsides to the end of its red lines. Because, as I see it, depending on what happens next, it could well be a far more bland future for one of gaming’s most important companies.

Xbox’s decision to shift its strategy away from hardware to focus on multiplatform games and services is motivated by one thing: cutting costs and boosting profits. According to a recent Bloomberg report, Microsoft CFO Amy Hood slapped a huge profit margin target of 30% on its gaming division in late 2023 – right as its acquisition of Activision Blizzard was completed, and just a few months before the first wave of PS5 ports were announced.

I probably don’t have to remind you that in the two years since, Xbox has been ravaged by layoffs, studio closures, and game cancellations. Games axed in the latest wave of Microsoft cuts included Rare’s Everwild, an original Zenimax Online IP, and a Perfect Dark reboot. Notably, these are exactly the types of games you’d expect to inspire frowns in the boardrooms of third-party publishers, with Take-Two reportedly passing on the opportunity to save the latter. And with Microsoft’s CFO now applying pressure on Xbox, it’s difficult not to feel that these are just the start of the casualties.

“Xbox’s decision to shift its strategy away from hardware, to focus on multiplatform games and services, is motivated by one thing: cutting costs and boosting profits.”

Yes, Microsoft insists it will remain in the console hardware business. But early leaks around Xbox’s next platform suggest that it will very much be a PC, just like the recently released ROG Xbox Ally portable, and it’s difficult to believe this hardware will play as significant a role in Xbox’s future, given its direction of travel. The more cynical might even call it a convenient way for the corporation to off-ramp its console players to PC.

So far, Microsoft has steered the conversation around console exclusives squarely towards gatekeeping. ‘Preventing PlayStation owners from playing our games won’t make you them enjoy them more’, it says, and its games are still releasing on the Xbox Series consoles, day one on Game Pass.

This thinking, however, overlooks a fundamental role of the console exclusive: delivering experiences players can’t get elsewhere, because normal game publishers won’t build them. With much of the Western games industry seemingly on fire in 2025, the third-party game publishers left are taking fewer risks than ever on expensive triple-A titles, simply because in a world where the majority of playtime is dominated by a handful of old live service games, it’s simply not worth it.

But console manufacturers can still take on riskier or more niche bets, albeit with the gargantuan development time required to put out modern blockbusters. Some of the most memorable Xbox Game Studios titles of recent years include the likes of Hellblade, South of Midnight, Psychonauts 2, Indiana Jones, Grounded, and Pentiment – arguably the sorts of games you’d struggle to see coming from Take-Two or Electronic Arts.

But will those sorts of games continue to meaningfully exist in a post-hardware Microsoft, dominated by Call of Duty and Minecraft, with pressure to hit even higher profit targets?

Genuine console exclusives are declining on PlayStation too, of course, though it has recently insisted it’s sticking to its strategy of bringing games later to PC, and it does also continue to put out smaller games like Astro Bot and Returnal, with big original IPs on the horizon in the form of Saros and Intergalactic.

Meanwhile, Nintendo’s big Christmas title, Metroid Prime 4, won’t be anywhere near Nintendo’s Switch 2 top sellers by the end of the generation, but Nintendo has backed its eight-year development stretch regardless. As Christopher Dring, founder of The Game Business, explains, console manufacturers can take on riskier bets than traditional gaming publishers because the success of their titles is measured beyond just sales.

“For a platform holder, even a niche game can hold tremendous value if it helps widen the audience of the platform,” he says. “For example, Xbox’s recent investment in Japan, publishing games like OD and Ninja Gaiden 4, isn’t necessarily about driving huge profits, but about expanding the Xbox audience in that market.”

Similarly, if Metroid Prime 4 brings a new audience onto Switch and Switch 2, who then go on to buy other games, it’s justified its production costs for Nintendo. However, if Nintendo were a third-party company, it’s difficult to imagine it would back such a niche franchise at the same level as it currently does as a console giant.

“The reason console manufacturers are able to take on slightly riskier bets is because the success of these titles is measured in more than just sales.”

One PlayStation executive during the PS4 era once told me that the reason it made so many cinematic single-player titles was partly because third-party publishers were struggling to financially justify them at the time, leaving gaps in its platform library.

Perhaps the most notable example of how a franchise can work for a platform holder, but not outside of it, is PlatinumGames‘ Bayonetta, a series cancelled by Sega after its first release, that went on to receive three sequels as a Nintendo exclusive.

If Xbox does fully leave the console market, says Dring, it’s still a ‘platform holder’ of sorts via Xbox Game Pass and the Windows Store. “So, I believe it will continue to invest in unique and niche games… But those might prove a little harder to justify, particularly if the bulk of game sales are coming on PlayStation, Nintendo, and Steam, where Microsoft will be required to pay store fees — typically around 30%.”

So, depending on what happens next, there could be a legitimate reason to question whether a multiplatform Xbox will be anywhere near as interesting as it has been in the recent past, in terms of the types and sizes of the games it publishes – especially if its multiplatform bet doesn’t pay off.

Circana’s senior director, Mat Piscatella, says it’s tough for anyone, let alone Microsoft, to predict how Xbox’s plan will play out amid the current transition in the games industry. However, he speculates that the number of games it releases in the future could well depend on the growth of Game Pass across different platforms.

“I’d say anyone who says they know exactly where all this is going to go in a year, 3 years, 5 years, whatever, they’re either being dishonest to themselves, others, or both,” he said. “And while Xbox (and every video game company for that matter) always has a long-term plan, things tend to change quickly, which can lead to dramatic strategic shifts (shoot, just compare the window prior to Call of Duty hitting Game Pass and today). Xbox has a plan (all video game companies do), but not even the folks at Xbox really know where all this will eventually go.”

If Xbox’s new direction pays off, Piscatella says, players could continue to see more smaller, niche games from Xbox. But if it doesn’t, and Microsoft ends up focusing more on Windows as a gaming platform, it could make fewer, bigger bets. “Or it could not go either way! Who knows. The only certain thing at the moment is the uncertainty.”