Xbox "regrets" losing Genshin Impact to PlayStation and reportedly wants a Chinese hit of its own

After failing to secure Genshin Impact for Xbox, Microsoft is now reportedly pursuing Chinese games with renewed urgency in the hopes of finding new breakout hits among the country's burgeoning output.

That's according to Reuters, which describes Genshin Impact as a turning point for Microsoft's interest in the games coming out of China. A new report claims Microsoft spoke to Hoyoverse (then Mihoyo) early in the game's development but "did not reach a deal."  

The company has apparently "regretted" missing out on the game ever since. This is presumably partly because Genshin has since become a lucrative PlayStation console exclusive. 

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Data from Sensor Tower shows that the majority of Genshin Impact's revenue is generated on mobile platforms – $3.7 billion as of September 2022, making it the third highest-grossing game on the platform since 2020 – but there's little doubt that PlayStation has seen a non-trivial chunk of the game's money as well. "Picking up Genshin Impact made Sony a lot of money," one source told Reuters.

That said, Genshin is only a PS4 and PS5 console exclusive for the time being. As recently as this May, Hoyoverse affirmed that a Nintendo Switch port for Genshin Impact is still in the works. (As GamesIndustry reported earlier this year, the Switch is notably the leading console within China itself.) However, there's been no word of an Xbox release, and this report may shed some light on why. 

After losing Genshin Impact to Sony, Microsoft is reportedly looking to attract and invest in Chinese developers as more and more Chinese games begin to seek – and, importantly, find – global appeal and success. This includes independent Chinese studios, Reuters reports, some of whom are already signed on for Xbox-exclusive and/or Game Pass releases in the years ahead. These deals are apparently being led by an in-house team Microsoft assembled specifically to scout Chinese games. 

Genshin Impact's explosive launch has been widely described as something of a breakthrough for Chinese games, though Chinese developers had been producing excellent games well before its 2020 debut. In an interview with GamesRadar, Chinese developer Hotta Studio, the makers of the MMO Tower of Fantasy which recently saw a global release, argued that Genshin "set a new standard for the industry."

Fueled by Genshin's success, Hoyoverse opened multiple new studio locations and has at least three new games in the works: the roguelike brawler Zenless Zone Zero, turn-based RPG Honkai Star Rail, and a currently unannounced title said to be a AAA open-world action game.