Why did Xbox go bankrupt and what does this mean for gamers?
Xbox is officially back online after a major service outage that left everything from the Microsoft Store to online play inoperable for over three hours. If you’ve tried gaming on your Xbox Series X, Xbox Series S, or Xbox One (not to mention Xbox Cloud Gaming or PC Game Pass) during this time, you might be left wondering what went wrong and what the news means for the future.
First, it’s important to establish why this outage occurred. For context, thousands of businesses around the world are currently facing serious IT issues, not just those in the gaming sector. This includes major US airlines like Delta and United, which have canceled flights in response, as well as Sky News and even the National Health Service (NHS) in the UK.
The root cause appears to be a broken update released by cybersecurity firm CrowdStrike. You may not have heard of them, but they are a major player in the cybersecurity industry, providing software and systems that power many of the world’s largest companies, including Microsoft.
According to a statement from the company, many customers are reporting multiple blue screen of death (BSOD) error screens. This can cause a recovery boot loop, a well-documented condition in which a malfunctioning computer can get stuck on a recovery screen and won’t boot. It’s like getting the dreaded red ring of death on your old Xbox 360, but instead of a console in your living room, it’s affecting some of the most important computers in the world.
It is currently unclear if this is the issue that caused Xbox to go offline. Given the timing and the fact that it is affecting many other online services, it seems safe to assume that it is related.
But what does this mean?
At the most basic level, the outage is bound to make for some pretty annoyed customers. No one likes to be locked out of their games, especially for hours on end. If you just got off work when the outage started and were itching to get into a multiplayer game, I can’t imagine you’re going to be too happy about it.
All of this comes at a particularly inconvenient time, as the long-awaited EA Sport College Football 25 was released earlier today. Early sales figures suggest it will be a huge hit on the platform and, with thousands of players flocking to the online matches, these technical issues have almost certainly disappointed many.
Since the outage also broke the ability to purchase digital games in many regions, it seems almost certain that some sales were lost during those few hours. There’s no telling how big the difference will be until we get our hands on concrete data, but this downtime could have been disastrous for struggling indie titles.
There are also some implications that are much harder to quantify. Will it affect the perception of Microsoft’s gaming offering? The Xbox brand has come under increasing scrutiny in recent months, thanks in no small part to disappointing hardware sales and the unexplained closure of multiple first-party game studios including Tango Gameworks and Arkane Austin. A widespread sense that Xbox’s online services are becoming unreliable is the last thing Microsoft needs.