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There have been a few news stories that make it seem like a lot of the XS's early popularity was due to the S version attracting a lot of new audiences. And that would make sense; if you are entering console gaming circa 2020 or 2021, meaning you have no older games to play on your new machine, and one of the options is $200 cheaper with all of the same games? Who cares if it's digital only if you were going to buy your games digitally anyways.

https://web.archive.org/web/20211217034133/https://www.videogameschronicle.com/news/xbox-series-s-set-a-record-for-new-players-at-launch-microsoft-claims/

https://web.archive.org/web/20220118113732/https://www.gamesindustry.biz/articles/2022-01-18-36-million-games-and-3-4-million-consoles-sold-in-the-uk-in-2021-uk-annual-report

Early PS5 shortages probably also helped.