Claire Jackson writes, "A graphics card requirement of 1200W means we might have enough spare power for a particle accelerator"
Who would have thought that giving games away for free would be so lucrative?
Microsoft Chief Executive Officer Satya Nadella shared a bullish report on the performance of the Xbox gaming business also on PlayStation.
I'm kind of hoping they drop most hardware support here with a 'good enough console' next generation and focus more on being a publisher. Obviously that is doing well for them and they can still push cloud gaming since it's going to tons of smart TVS and devices. They're now the largest video game publisher in the world, if they aren't doing the most sales and pre-orders, then they would be in trouble. They aren't.
They're gonna try again with a new gen console. If they want to compete they need to actually be competive. Say games like Halo, Blade Elder Scrolls or whatever big game it is. Needs to only be on Xbox and PC. If those games go multiplat it needs to be after a few years or at least a year later definitely not 6 months as a good portion of ppl will wait. Knowing MS they'll probably try and compete, then when things don't go there way they pivot and change the metrics again.
I don't think you're reading the tea leaves here. Leadership hasn't used the word "exclusive" in quite a while, and they're now boasting about PS sales. They're probably done with consoles and exclusive at this point.
I don't think they'll try. They have been beating a dead horse for so long now and they have finally realized it isn't going nowhere.
MS is going to drop being hardware exclusive, they are going publisher and subscription. You will be able to buy a Xbox, but you will be able to play on any platform, that's their new goal. After the hit with Oblivion remastered and major sales on PS5, no more Xbox/PC exclusives long term..
I think with the latest price hike on their console, they’re well on their way to axing hardware.
Hardware axing entirely is bad news. They've sold most of their hardware on the Series S this generation. I think if they capture a lower hardware market that can still buy games (especially on sale), they'll actually hit a good market considering how the economy is going. Especially in the U.S. People are going to want to keep gaming and streaming isn't that good for online gaming at all.
@crazy they've stated multiple times they're going another gen. The next gen Controller even got leaked.
Tired of repeating myself whenever it comes to this subject of Xbox having another gen.
Xbox consoles are done, all we gonna get is some branded 3rd party shite at best, ms aint interested in being a console manufacturer no more, this much is obvious.
Microsoft has too much money for that. They are rumored to release a PC/console hybrid in 2026. They will push all you hope as a publisher while having new hardware next year, so the games will appear on their platform and every other platform which is good to me if the goal is to sell software. If that is where the money is why would anyone fault MS for that? The prices are going to be insane for the next PlayStation and console from Microsoft, though, but it is what they voted for, so this is what we got.
“We continue to transform the business and focus on margin expansion as we bring our games to over 500 million monthly active users across devices. We ended the quarter as the top publisher by pre-orders and pre-installs on both Xbox and PlayStation Store.”
Amazing news!
Xbox reigning within rival territory.
Big slap in the face of haters who used to crap on Xbox´s games and its quality.
One minute he says that they will NEVER go third party
Now he's all for it like this was Microsofts grand master plan all along.
@-Foxtrot
"One minute he says that they will NEVER go third party"
Fact.
"Now he's all for it like this was Microsofts grand master plan all along."
False.
Never said it was Microsoft´s master plan all along. But it is REALLY working for us, as the fact that you´ll be able to enjoy Xbox gamers isn´t killing us. Rather the contrary, we are happy that everybody is funding our games on Gamepass.
Specially now with the imminent new $80 price tag for Xbox first party games.
It is what it is.
He loves it. Now he gets to support the trillion dollar company even more by giving them more of his money.
I agree.. great news for Microsoft and tbe xbox brand. Your Playstation is now a xbox. Microsoft wasn't kidding around when they said xbox will be everywhere. Now they are laughing all the way to the bank. Imo sony needs to do similar things. They're putting their biggest titles on PC. Might as well bring them over to other consoles too. They aren't making much on console sales.
Theres been one game in the last few years that's been good. Indy. Long way to go before you start talking about their games and their quality
Xbox gamers really are the strangest demographic. Not so long ago you are all saying PlayStation isn't the competition Amazon is because Phil said so. You love to parrot what your corporate talking say. That wasn't actually true Xbox and PlayStation were in direct competition but because Xbox was losing so badly Phil had to act like they weren't.
Cut to present day and Xbox and PlayStation aren't competition because Xbox has no hardware presence it's zero. In fact Microsoft is now a third party publisher and they need PlayStation they don't need Xbox or Xbox gamers they need PlayStation gamers and PC gamers and mobile phone gamers and switch gamers.
You're here cheering for the fact you've become irrelevant because you think it's important that your uncle Phil is making money. You think PlayStation gamers are upset if Microsoft releases more good games in a year than sony does. when Microsoft makes a good game you shout take that playstation!
PlayStation gamers simply say thank you I will third party publisher that makes me games
I think you're confused. Microsoft never saw Sony as their biggest competitor. They've reiterated it for years. Sony is doing the same thing by putting their biggest franchises on PC, which is OK with Microsoft. Their will be more playstaion games coming to Microsoft ecosystems. Maybe not to xbox consoles but playstation won't be the only place you can play their games. Kind of how it is now. I would bet that they are making plans to do just that but they probably fear the backlash from their fanbase which is silly because noone is gonna stop playing games just because it's on on another platform.
"Cut to present day and Xbox and PlayStation aren't competition because Xbox has no hardware presence it's zero."
If that was remotely true you wouldn´t be so mad about Xbox gamers getting day one games on Gamepass that you have to pay full price for.
"PlayStation gamers simply say thank you I will third party publisher that makes me games"
And we´re thankful for Playstation gamers supporting Xbox games funding our day one games on Gamepass.
Like I said: Everybody wins.
We brought two of the biggest publishers in the world, cost thousands of people their livelihoods and consolidated a huge part of the industry, look how successful we are at gaming!
Top Secret Strategy for How to Become the Biggest Publisher in the World:
1. Buy everybody
And this has been standard business practice in every industry. Don't hate the player hate the game! lol
I have no doubt that the vast majority of developers and studios will be looking at Microsoft as far job security is a concern.
Microsoft will allow its studios to release their games to every single platform, which means more investment on new games, more money, more jobs positions, better payment, benefits and recognition among gamers worldwide.
You though MS would crash and burn
You want MS to leave gaming forever but GAMERS clearly wants otherwise.
You said MS doesn´t know how to make great games but Xbox games dominating sales on Playstation clearly says otherwise.
Now you also have Playstation gamers to blame for helping the rich to get richer.
I warned you. You were on a fool´s errand all the time.
Now all you can do is watch as MS and Xbox gaming grows bigger and better than ever and release games for everyone!
At the end of this road, Bethesda, Activision, etc, will still be releasing games for everyone and Xbox consoles will be no more.
If that's what you claim to have foreseen, then congratulations, you win.
You think three major publishers no longer competing and thousands fired to feed the piggies at MS is a good thing, I don't.
More and more owned by fewer and fewer is what you're cheering for, all that leads to is $80 first party games kid.
Microsoft announced its financial results for Q3 of fiscal year 2025, including an update on its gaming business.
Replies(1)
That's not how that works.
Gaming revenue is already a balance of Content and Services +/- Hardware. So it's simply one step forward. Microsoft's gaming business is growing, and has been growing pretty much forever.
...two steps forward and one step back still amounts to one step forward, does it not?
@darthv72: But in this case, it's more one step forward that would be pretty large, but is held back by some weight, so it's instead a bit smaller, but it's still a sizable step forward, since hardware weighs a lot less than content and services. Your comparison would work if C&S and Hardware were equivalent.
Revenue is not profit. So, we don't know if they have actually been growing or playing catch up.
Darth is correct by the way.
I imagine we would have to know the profit they make off of each category. To be able to access how much of an impact the negative console sales have on the whole. If they barely squeak a profit out of hardware or better yet, are in the negative for each sold. It won’t impact the other categories as much. Considering the bulk of the profits come from software. But just my take.
Care to reassess your statement? Xbox is officially dead in the water now, console wise. No one was buying it before and they damn well wont be doing so going forward. They just raised the cost on their controllers, consoles, and pushed the price to $80 on games. Gamepass will be soon be seeing another price hike as well, book it.
Really depends on your goal. I was told by Microsoft that they were still pushing hardware, so I don't know what to believe.
One step forward toward becoming a 3rd party publisher. But yes one step forward.
Hardware revenue will probably sit somewhere between 800M - 1B for the quarter.
And content & services make up around 75 - 80% of total gaming revenue. Total gaming revenue is up 5%.
While positive numbers are positive, I don't find +5% year-on-year in total revenue a great, not even a good result considering what they've been throwing into the pot since their last Q3.
I don't think they are happy with only a +5% payoff since and compared to last year's Q3, which was abysmal, despite these numbers are indicating "Positive!" at 1st glance.
Especially since in terms of revenue, hardware doesn't contribute a lot to overall revenue anymore ("only" -6% down, because there's no hardware really being sold anymore).
Edit:
"Hardware revenue will probably sit somewhere between 800M - 1B for the quarter."
Was too optimistic.
It's estimated to be at ~330M in Q3.
This means hardware revenue contributed ~6% to Xbox total gaming revenue.
Which then means that 94% of Xbox total gaming revenue in their Q3 '25 was driven by content & service.
And that big portion is up 8% compared to last year's Q3, dragged down by -6% hardware revenue, totalling +5% overall.
Is that really a good result for an up to now 94% "content & services segment", considering that, after last year's Q3, there were Call of Duty, Indiana Jones, Stalker 2, Flight Simulator & other 3rd parties being put D1 into GP?
And considering that subscriptions themselves also fall into content & services segment?
+5% is growth no matter what, sure. No denying.
But ... looking at what they've been throwing into their "content & services" playground since Q3 '24, I don't really see how +5%, while being growth, is a good result business-wise (ROI).
I'm thinking the same thing. This year is kinda like a sugar high for MS. Lots of great games coming out of the pipeline, plus relatively "free" revenue by cashing in on prior opportunity costs by putting prior exclusives on PS. This year, if any, should be gangbusters for them. I can't imagine next year being as good with all these studios back in the development phase...
@crazy
Last Q3 '24, their overall revenue was up 61%. (Thanks to ABK.)
What's left?
5%. In 12 months.
After they increased GP for an average of +18% across all tiers.
After they put Call of Duty (!) D1 into GP.
5%.
That's crazy if you asked me.
Missed that:
Because the actual question for them today is:
• Let's look at retail revenue we've lost from games being D1 in GP, e.g. Call of Duty (just to name the biggest one).
• And ask ourselves: would we've had gained more than +8% in content & services with the retail model?
Keep in mind there was a price increase of GP tiers which came effective in Sept. 2024.
And Sept. 2024 was, logically, after (!) their last Q3.
So - no, +5% in revenue (!) ain't good.
Well what do you know. When you release good games, good consecutive 1st party you output you actually make money.
Minus hardware of course.
I'll give credit where it's due. MS is starting to capture that old 360 energy when it comes to games and releases. It took them 14 years of having a clue but they seem to be doing it now. All will be lost if they step on rakes like they're known to do. Who knows how long it'll last.
It took them essentially going third party but still making hardware to capture that energy.
Revenue is revenue.
If by, 'make money', you mean profit, there's nothing here to show they made a penny of profit.
I'd imagine profit margins are either razor thin or non-existent. But I also think this will change over time. The one thing I can't wrap my head around is Microsoft's desire to create a next-generation console. No one is interested. Last month Xbox sold an estimated 50K units outside of the US. A 6% drop may seem like a low percentage but it's a drop from already low starting point, signaling that interest in Xbox hardware is approaching rock bottom.
It's really just the 4090 that's huge and needs a 1000w power supply and for the 4080 you need a 750w PS. The 40 series has to be the worst price to performance ratio cards in a long time and Nvidia has gotten greedy because of the Scalpers. You can thank them for that.
We've gone too far bro. I'm out.
SLI might be worth reconsidering at these prices. No matter how poor performance scaling was, it pales in comparison to today’s price scaling (scalping).
Power efficiency went out of window when talking about 4090, any hotter and it can doubles as a stove, worth every penny lol NOT.
But will you hear as much complaining as you did when the PS5's size was discussed? No.