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Xbox Hardware Revenue Grows 4% YoY; Microsoft Gaming Revenue Grows 8%

Microsoft announced its financial results for the second quarter of the fiscal year 2022, related to the period between October 1 and December 31.

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darthv72115d ago

"It’s worth mentioning that we might see the gaming business reported on its own in future announcements following the official creation of the Microsoft Gaming division under Phil Spencer."

Guess they are doing good enough to go back to reporting numbers... in due time.

Sonyslave3115d ago

I see report on the # Ms about to make that 70billion back way before the deal closes.

darkrider115d ago (Edited 115d ago )

Lol. Microsoft did 22 billions in profit... Not the gaming division... So even for Microsoft it will take 4 years to gain back the 80 billion. If you only count the profit of the gaming division how many years? 15, 20 years?

darthv72115d ago

@rider... "Lol. Microsoft did 22 billions in profit... Not the gaming division... So even for Microsoft it will take 4 years to gain back the 80 billion. If you only count the profit of the gaming division how many years? 15, 20 years?"

lol is right dude... This was just the last 3 months, hence why its called a "quarter"

TheGreatGazoo30115d ago (Edited 115d ago )

@darthv72

They still aren't going to report hardware #s, which is what I assume you're talking about. They didn't stop reporting hardware because it was doing poorly, they stopped when MS stopped reporting all hardware numbers and began to report on what matters. Subs, daily active users, growth of those, and Revenue

darthv72115d ago

Things have changed recently so we just have to wait and see.

MrNinosan115d ago

There were no important "subs" 10 years ago when they stopped reporting.
They stopped when PS3 passed X360.

TheGreatGazoo30113d ago

@MrNinosan

Except for little known things like windows, office, and Azure. Microsoft changed their financial reporting to stop reporting hardware numbers because they're irrelevant. Even Sony has said in the last 12 months that hardware numbers aren't a great indicator of success. MS could outsell PS 30 to 1 and they wouldn't report hardware. They point to revenue and subscriber growth because that's what investors care about.

CaptainHenry916115d ago

"4 years to gain back the 80 billion"

I say over 5 years to a decade

Obscure_Observer115d ago (Edited 115d ago )

"Guess they are doing good enough to go back to reporting numbers... in due time."

I disagree. I don´t think they should do it. I mean, "let us hide and/or mask our low numbers AND, in case Xbox consoles start and fly off shelves, we can do a 180° and all will be forgiven and forgotten."

IMO reporting consoles sales numbers, serve no purpose other than fuel stupid flame wars among fanboys.

Zeref115d ago

Monthly active users are the more important number anyway

S2Killinit115d ago

They will not report hardware when they are selling half what their competitor sells. It wouldnt make sense. This type of article is how they will continue to report.

+ Show (2) more repliesLast reply 113d ago
sparky77115d ago

So basically they will make back the $70bl before the ActiBliz deal even closes. Absolutely crazy.

I guess next year will be Take 2 or Sega or both.

Christopher115d ago (Edited 115d ago )

Revenue != profit.

Edit: To those who disagree --- I know you're not disagreeing with the fact that revenue is not profit (I so very hope you're not?), but you have to admit that 8% revenue doesn't mean 8% profit and that they're not going to be making back the cost of making these major moves as quickly as you think they are. This is a very long play by MS being completely shouldered upon the profits of other areas of the company in order to buy a foothold into the digital offering of video games as a publisher/service. It won't be paid off anytime soon by the gaming division and will continue to be propped up by Microsoft as a whole.

Those are just facts. It's why so many people bring up Microsoft's market value, not the market value of their gaming division, when talking about Microsoft buying more studios in the future, not Xbox buying more studios in the future.

115d ago
sparky77115d ago

They made $22.2bl in profit.

Fishy Fingers115d ago

You're absolutely right in saying MSs overall income allows them to prop up one division for potential long term returns (which clearly they believe will happen). When it comes to the consoles manufacturers, thats their strength/advantage and an option the others don't have.

Christopher115d ago (Edited 115d ago )

***They made $22.2bl in profit.***

You're only proving my point. Microsoft made that. Not Xbox Hardware or Xbox Gaming. This is about Xbox, not all of Microsoft. That's not how divisions are managed. Why do you think Sony sold off their divisions that weren't profitable years ago?

If Xbox costs Microsoft billions each year to keep active, then that's not good. Longterm, these divisions need to see huge upticks in profitability, not just revenue.

darthv72115d ago (Edited 115d ago )

Fishy... Sony [as a manufacturer of electronics] is who provides the PS division with all of their units to sell. Not to mention their other divsions like movie & tv [Columbia/Tristar for ex] for providing the content to which they can have their product placement. PS doesnt do it all alone. They get the backing from the parent (Sony corp) just like XB does with MS.

Nintendo would be the one who does it all themselves because that's who they are, it's what they do.

115d ago
sparky77115d ago

MS brought ActiBliz not Xbox.

You can spin it all you want. They are all the same company.

Fishy Fingers115d ago (Edited 115d ago )

Darth I'm not saying PlayStation doesn't have the backing of their parent company, quite the opposite, it's largely their most dependant, consistant division. But Sony nor Nintendo (and their shareholders) could sign off on $80bil of investment in one fiscal year even through they're both leading in the sector.

The xbox division/MS in one year invested more than half of Sony cops entire net worth. $155bil vs $1.6tri companies. They're not really comparable as a whole.

115d ago
Christopher115d ago (Edited 115d ago )

***MS brought ActiBliz not Xbox. ***

Xbox needs to make a profit, not just MS.

It's like you're only paying attention to that part of the conversation you want to.

***Well the only thing keeping sony a float is its gaming division, which is the exact opposite problem Microsoft has.
I guess you don't see that as an issue though ***

On a gaming forum, you think I'm, as a gamer, having an issue with the gaming division being the most profitable in a multi-billion dollar company?

Why would *anyone* have that problem? I'm not here to talk about camera lenses or the like. And their gaming division is standing in its own.

Let alone the topic is an about MS and not Sony.

115d ago
Lightning77115d ago

MS is spending that kinda money not the Xbox division. Satya is signing the checks while Phil pitches or sells the idea to Satya. The Xbox Division doesn't generate that sort of profit.

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Christopher115d ago

***No, it doesn't. Microsoft can run xbox at a loss for the rest of time and be subsidized by the rest of the business.***

That's not how stakeholders see it.

***Obviously, Sony is at a huge disadvantage when they have to not only fund PlayStation but prop up other underperforming parts of the business with revenue from gaming.***

They literally sold off multiple divisions so that PlayStation wasn't propping them up.

***don't want to Sony get steamrolled by Microsoft, who can sell their consoles at a bigger loss, pay more for game development, and swallow the whole industry up $70 billion dollars at a time.***

Predatory pricing and monopoly laws exist to prevent that.

115d ago
Atom666115d ago

I guess my handful of MS shares makes me the authority here? (I certainly can't do worse than the kids above who keep showing us why they failed 3rd grade math).

Well, as a "stakeholder," idgaf about ROI on a deal that is a year away from closing. Also don't really care about profits from a division that is in its expansion phase, where we reasonably expect maturity won't be reached for another decade +.

People need to stop applying lemonade stand economics to massive corps like MS. From an investment side, they can continue to use Xbox (and maybe Surface too) as their consumer-side goodwill branding if it helps their other divisions.

So subsidize it, break even if you can, and I'll worry about those margins in 2040.

P_Bomb114d ago

“Well the only thing keeping sony a float is its gaming division”

Spider-man: No Way Home is on pace to make just shy of 2 billion dollars (without China). Just saying.

114d ago
Christopher114d ago

***Well, as a "stakeholder," idgaf about ROI on a deal that is a year away from closing. Also don't really care about profits from a division that is in its expansion phase, where we reasonably expect maturity won't be reached for another decade +.***

Zune and Windows Phone were going through the exact same thing. As was their attempt to get into streaming.

***People need to stop applying lemonade stand economics to massive corps like MS. ***

People need to stop ignoring how 10 years of losses in a division looks on the books.

***Shareholders only care that the entire buisness is doing well,and shareholders will NEVER see a breakdown that shows the losses incurred by hardware or software ***

Yes they do and they literally see such information at the end of each FY. We literally report on those conference calls on N4G.

***Let me tell you something about Sony, they aren't putting games on PC because they want to sell a few million more copies. They are putting them on PC because if PlayStation goes under, they at least can keep all their employees at their studios employed. ***

Holy made up BS Batman. It's literally for the money and enhanced market reach.

***You honestly think that after some of the mega mergers like Comcast and AT&T...***

1. What I was replying to was the idea of Microsoft using tactics the FCC literally was created to prevent.

2. Bend Studios, Insomniac, Naughty Dog, Sony San Diego, Sony Santa Monica, and Sucker Punch are just as American as any other company.

3. Your idea of prioritizing America only in a global market when more States earn more taxes from PlayStation than Xbox seems to not understand what the government is standing up for in the end.

114d ago
Atom666114d ago

You know you're making a good argument when you pull out Zune and Win Phone...and no, they weren't going through the same thing. Unless you're thinking it's 2014?

Instead of investing further and expanding, they cut their losses and moved away.

10 years of losses is either assumptions or fabrication. I'm looking at 30% gains in just one year, and close to 200% since dipping back into MS shares. Please tell me more about your concerns lmao...

Funny enough, not a single investor even mentioned the Activision deal during the last call. Maybe it was because current P&Ls of that division have nothing to do with a deal that hasn't even closed.

Maybe they also recognize that Xbox isn't the reason we're getting such great returns.

Again, check back next decade and we'll talk.

Christopher113d ago

***Instead of investing further and expanding, they cut their losses and moved away. ***

After investing tens of billions in IP-related buyouts...

***I'm looking at 30% gains in just one year, and close to 200% since dipping back into MS shares.***

Not in the Xbox division, which is what this discussion is about. You just want to move goal posts to ignore the loss and equivocate overall gain as the only priority. That doesn't make it go away nor does history show that it's a winning method in the long run.

Microsoft's biggest competitors are in cloud-based ventures. They're moving to this model to compete more in that and prevent them from obtaining a foothold. But it doesn't stop the competition from continuing to fight, and they're all growing because of such ventures at this time.

Eventually, the reality of those ventures will subside and see who wins what. And when that comes, the profitability of Xbox will go under the microscope if it is still being funded by other divisions.

+ Show (21) more repliesLast reply 113d ago
roadkillers115d ago

You need to look at Net Income not Revenue. Revenue is before expenses. If I’m correct, it will take a year for the entire company to return $70Billion if they can reach that high.

EasilyTheBest115d ago

Insane amount of money. I can definitely see Microsoft buying another big studio further down the line, now that they are all in on gaming at last..

darthv72115d ago (Edited 115d ago )

would be funny if they went after Embracer next. People talk about a monopoly now... with them in their corner, THEN it would be a monopoly.

I dont think it will happen though. They could go for someone smaller like say... T2 or Ubisoft.

TheRealTedCruz115d ago

I'm still betting on Sega.
They've been corporate buddies for two decades now, and they're starting to gain traction in the Eastern market.

darthv72115d ago

@ted, I'd be down for some Sega but only if they would make a promise of bringing back some of their classic arcade games to XBLA and resurrect some of their other classics like otogi, gun valkyrie and of course jet set radio.

Activision115d ago

If Microsoft acquired Embracer Group it's still no where near a Monopoly.

Atom666115d ago

Dig into a MS exec named Noah Musler. He's a big reason Obsidian and inxile came on board.

He's also a former SEGA guy.

+ Show (1) more replyLast reply 115d ago
TheGreatGazoo30115d ago

My guess is still WB when it becomes available again. That locks up DC University and Harry Potter for them. Konami has so many IPs it makes sense too.

Christopher115d ago

I don't see this happening as I don't think they'll sell the licenses to make DC games to a company and would rather sell to the complete IP package, which is worth way more as a package, than just parts of it.

darthv72115d ago

ATT is not going to give up on them so soon... not after they fully understood what they were sitting on.

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TheGreatGazoo30113d ago

@darthv72

AT&T pivoted, largely due to an advocate investor, and is out of the content creation game and focusing on core delivery services. Videos games will be part of that. They will sell those studios at some point.

+ Show (2) more repliesLast reply 113d ago
DarthMarvin115d ago

Revenue means nothing, what's their total profit?

Activision115d ago (Edited 115d ago )

Microsoft just made $18.8 billion profit in one quarter.

DarthMarvin115d ago (Edited 115d ago )

Cool. Imagine how much higher that figure would be if Xbox wasn't bleeding money.

ThatsGaming115d ago

Profit on a yearly basis means nothing.

EBITDA is the true measure of a company's financial state.

115d ago
DeusFever115d ago

This is Microsoft’s power in the gaming biz. Windows and Office are solid money makers. Microsoft can use those profits to buy up any gaming company it wants and keep dumping money into GamePass to build marketshare.

Bladesfist114d ago

You forgot the biggest money maker for Microsoft, Azure.

"While Microsoft’s three core business segments are still well balanced in terms of revenue, the intelligent cloud business is gradually pulling away. Productivity and Business Processes, which includes Office, LinkedIn, and Dynamics, makes up around 33 percent of Microsoft’s revenues. Intelligent Cloud, which includes Auzre, server products, and cloud services, now generates 38 percent of Microsoft’s revenues. That leaves More Personal Computing, which includes Xbox, Windows, and Surface, with around 29 percent of Microsoft’s overall revenue."
Quote from the verge.