Dive Brief:

• Xbox this week unveiled a stories feature in its mobile app. The feature by the Microsoft-owned brand will let gamers show off their skills in short videos they can post and share with friends, according to a press release.
• Stories will have its own section on the Xbox app where users can create and share their favorite gaming moments. The feature is currently available in Australia, and will roll out to other Xbox-supported regions soon. Bundled with the stories news, Xbox introduced Quality of Service Tagging to protect gamers from connection issues.
• The announcement comes just two week after Microsoft said it may bring ads to Xbox, and months after market research found the PlayStation 5 (PS5), owned by Sony, greatly outperformed Xbox Series X/S sales by 1.7 times.

Dive Insight:

With Series X/S console sales lagging behind PS5 sales, Xbox is looking for a way to distinguish itself from the competition, positioning the platform as potentially more community-centric than its rivals. While Xbox is a bit late to the “stories” game — Instagram, Spotify, TikTok, LinkedIn and Netflix all debuted stories features more than a year ago — the new addition in the app has the potential to make it the TikTok of gamers. Xbox’s move could help it to take things beyond its main gaming platform and may signal that parent company Microsoft will adopt a more TikTok-like approach in the future to keep people engaged.

The introduction of stories could also be another step in Microsoft’s efforts to monetize Xbox. The company recently announced it was working on a program that would bring ads to free-to-play Xbox games in a way that is non-disruptive to gameplay. The need to monetize continues to grow, especially as gaming audiences diversify and the broader gaming industry expands.

It's no surprise that apps and web platforms are taking a page from TikTok to make deeper connections with their respective communities. TikTok is the most visited website in the world, dethroning Google for the first time last year. Its ad revenue recently surpassed Twitter and Snapchat combined, suggesting significant engagement and revenue opportunities for platforms that follow suit.

However, Microsoft’s slow uptake to the trend could be detrimental for its Xbox app, as some gamers may have already migrated to other apps, including TikTok. The social video app has a robust gaming community, with #GameTok boasting 14.8 billion views. It is unclear if Xbox’s app will be able to chip away at TikTok's lead, especially as only those with an Xbox can get the full benefit.

But Xbox's move to add a stories feature may signal Microsoft's shifting priorities. As sales lag behind rival Sony, Xbox is looking for additional revenue streams. Stories may help to draw in users and keep them engaged, bringing more eyeballs to Xbox's ad-supported mobile app.