Microsoft's Gaming Revenue & Xbox Hardware Revenue Decline 13% Year-on-Year

Microsoft announced its financial results for the second quarter of the fiscal year 2023, including details on the performance of its Xbox business.

Read Full Story >>
The story is too old to be commented.
darthv7213d ago

Declining growth... job layoffs... battling with FCC and other regulators...

crazyCoconuts13d ago

Isn't it kind of early to experience hardware declines? I mean, the supply issues should be letting up now.

Orchard13d ago (Edited 13d ago )

The economy was far stronger a year ago. Crazy inflation right now and lots of people losing jobs and struggling right now.

A lot has happened in the last 12mo, heck, a year ago the war in Ukraine hadn't even started.

Brazz13d ago

Likely connected to the fact that séries X/S are sold on loss.

Lifexline13d ago (Edited 13d ago )

We’ll considering in 2021 they released halo and forza and in 2022 they released nothing to that caliber. It shouldn’t be surprising that a game console needs games to sell. Someone needs to tell MS that to make games lol.

But 2023 already is looking like a better start already so hopefully they keep it up or they shouldn’t be surprised their sales decline.

darthv7213d ago

Im not exactly sure how they figure all that out but I know comparatively that the Series had a 21% increase in units sold to last year. There must be other stuff bringing the % down.

SullysCigar13d ago

^ @darthv72, they've been selling the series S at a ridiculously low price for the past 3 months, which may help explain how units can increase at the same time as hardware revenue declines.

That said, their gaming revenue was down too, which would include gamepass. This could be the catalyst for the price rises Phil spoke of.

crazyCoconuts13d ago

@brazz, these numbers are revenue so it has nothing to do whether it was sold at a loss or not. It's just plain sales numbers

sparky7713d ago

It could be they are selling more XSS than XSX now since it's just revenue not unit numbers.

13d ago
Hofstaderman13d ago

You only buy the console once. You buy games multiple times. Problem here is two fold, there are no big AAA releases and GamePass is cannibalising them as it has fostered “I will wait for GamePass” or “It’s free Day One on GamePass” attitude. In short MS made their own bed.

FinalFantasyFanatic12d ago

My guess? People just don't have a reason to purchase them, Sony and Nintendo consoles are still selling like hot cakes.

+ Show (7) more repliesLast reply 12d ago
Jin_Sakai13d ago (Edited 13d ago )

• Gaming Revenue Down 13%
• Xbox Content and Services Down 12%
• Xbox Hardware Revenue Down 13%
• 1st party and 3rd party content Declined
• Game Pass Subscribers Grew

“$4.74B in quarterly Xbox sales. The lowest since FY 2020 Q2”

Looks like the saying from 2011 was true after all.

“If we lose our way with Halo, we lose our way with Xbox," says Spencer

crazyCoconuts13d ago

So after the huge expense of taking on Zenimax to barely move the bar in revenue, they're about to finally release a few games this year. Zenimax would have released those games to every platform, but not MS. They'll sacrifice a chance to finally get some sales by giving it away on GamePass and cutting out paying Playstation customers. Brilliant. If I was Satya, I'd have my foot up Phil's posterior right about now...

darthv7213d ago (Edited 13d ago )

I think I (and many others) read this wrong. They are talking about this last quarter as it compares to the previous year for the same time. Not the year in its entirety. That makes sense now as I knew units increased over last year but seeing as they take a loss on the S more than the X, and the S sold so much more (cheaper point of entry) then they still had a decline in revenue while units increased compared to the same time in FY22.

Lightning7713d ago

This is what happens when you don't release the big games. This is what it always comes down to.

Chevalier13d ago

I know right? Like releasing Games for a Game console shouldn't be such a stretch

Ra303013d ago

Crazy that a Software Company can't seem to make Software for its hardware.

LabRat12d ago

This 100%. They have now like 15 -20 first party studios after all these acquisitions....Where the F are the games?. Zero excuses anymore, they are just a very mismanaged company in terms of there Xbox division and it is starting to show greatly.

lelo2play13d ago (Edited 13d ago )

Microsoft really don't understand the gaming business. Without exclusives, sales will decline. If you don't have exclusives to launch, purchase 3rd party exclusives the way Sony does. That's how you outsell the competition.

Contrary to popular belief, Phil really is doing a lousy job in front of the gaming division.
Microsoft need a great showing tomorrow, with quality exclusives.

Christopher13d ago

Most people buying the cheaper Xbox and tons of people utilizing Game Pass instead of buying games.

1Victor13d ago

I’m surprised that no one has put 2 and 2 together haven’t anyone noticed that since the ABK acquisition proposal Microsoft first party games have been basically non existence and the games GP gets are medium to low quality at best.
This is all part of the plan to lower their footprint on the market take a lost and go to court with a see we are loosing money and need this to slingshot compete with Goliath ( Sony ).
2022 was supposed to be the year of Xbox but as soon as ABK got announced games that was supposed to be ready to go all of the sudden needed more time to finish polishing pushing them to 2023+.
This supposed down time that we are having for some reason is only hitting Xbox hard because “they didn’t see it coming“ are they going to sit there and say “good for Sony to raise their consoles prices citing the economy but we’re good we don’t need the economy to run them into the ground “.
Is Microsoft Xbox leadership so inept that they couldn’t see what Sony saw a mile away or maybe I’m giving them too much credit

S2Killinit12d ago

That is a interesting take. I wouldn't be surprised if this was true considering how full of shit MS has proven to be over the years.

jznrpg12d ago

@Ra3030 they’re a software company but not a gaming software company is the problem. They buy games and IP . Eventually they have issues having not grown a culture of making games but buying games . Halo is near death , Forza devs have all left , so they HAD to buy Zenimax . If those games start going downhill (some of them have been before purchase imo Fallout/ES being the biggest 2) then they will want to buy more IP which they are trying to do now .

+ Show (4) more repliesLast reply 12d ago
Orchard13d ago

Can't say I'm surprised really, the entire industry is going down in this economy. This will be a trend we see a lot as we enter into the Q2 financial reports season.

Abriael13d ago

Microsoft isn't surprised either. This is pretty much in line with what they said it would be in October.

Sgt_Slaughter13d ago (Edited 13d ago )

More like Xbox has no games to compel people to buy their products so the brand is stalling out. Companies like Nintendo and Sony are thriving month after month (Pokémon S/V just sold 10M+ units in under 72 hours and the PS5 hit 28M+ systems sold in just over two years and that's WITH supply chain issues). Not to mention even when you look at the industry as a whole, it's only down 5% Y-o-Y which means Xbox is struggling big time @ 13%. They're at almost triple the downturn comparatively, they're the exception not the rule.

Orchard13d ago

Saving this comment. Let's see how well it ages when Sony, Nintendo, EA etc have their earnings calls :)

No one is immune to this economy.

"Not to mention even when you look at the industry as a whole, it's only down 5% Y-o-Y which means Xbox is struggling big time @ 13%."

That's... not how that works. Microsoft make up a small portion of the industry, so their 13% could be 1% overall.

crazyCoconuts13d ago

@orchard, I am indeed interested to see hardware revenue specifically for Sony and Nintendo. All indications so far have been that those numbers have been INCREASING as console sales have increased as supply issues have subsided. Even with that, they can't keep the PS5s on store shelves. I thought the XSX was in the same boat, but that can't be based on these numbers.
Sony selling PSVR2 and the Edge controller is going to help in their next period as well.

darthv7213d ago (Edited 13d ago )

@orchard, Sony will likely post a gain to their hw division while MS posts a loss. this is because the PS5 being the same technical specs between two skus vs there being a delta between the series s and x. No doubt people buying the series s are getting in on the ground floor and helping to increase those GP subs but they are doing so with the cheapest point of entry. those buying a PS5 are just deciding on if they want to spend that $100 for an optical drive or not. Otherwise they are the same machine.

In fact, i think both S and X are sold at a loss but obviously MS makes even less $$ on sales of the S than X (S is sold at an even more considerable loss than X) So if they sell 1m X at $500 vs 2m S at $300... you can see how even though they sold double the number of units, it only amounted to a $100m difference. Im sure they are happy to sell units but would be even happier if those were all X and not S. Either way it is getting units into consumers hands and GP subs in the process.

S2Killinit12d ago (Edited 12d ago )

“That's... not how that works. Microsoft make up a small portion of the industry, so their 13% could be 1% overall”

Um, Thats not how percentages work. If you are down 13% on your own sales, and the rest of the industry is down 5%, you are doing worst than the industry. Doesn’t matter that you are a small part of the industry.

+ Show (1) more replyLast reply 12d ago
Lifexline13d ago (Edited 13d ago )

Yeah it’s pretty much in line with everyone else. They did release halo, forza in 2021 and 2022 nothing so no one should be surprised. But yeah they need big games to make sales up. They really shouldn’t expect the Xbox to sell like hot cakes if it doesn’t have big name exclusives. Maybe this year will be better for them. A game console needs a constant stream of games who would have thought.

They are giving us smaller games that are great like high on life, pentiment etc which is great for consumers but not good for their bottom line. They need big games as well.

Orchard13d ago

Yep, they really need to make sure at least Forza + Starfield land this year. Can't afford for those to move out into 2024.

Lightning7713d ago

That's what I been saying for awhile now.

Look I know Redfall and Starfield needed to get delayed to polish up. It hurt MS, it's fans, it's console and services and overall fan fair last year. If Star Field and Redfall released broken and terrible. That would do long lasting damage beyond recovery and their console, sales, revenue would tank WAY more than it is now. Everything will be down and MS would might as well see themselves out on a permanent basis if they released those games in a bad state. A delayed game has a better chance of becoming good, than a badly rushed game.

1Victor12d ago

@lifeX “ A game console needs a constant stream of games who would have thought. ”

Who would had thought that after over 20 years in the video games industry Microsoft haven learn that basic concept 🤦🏿

shinoff218313d ago

The economy isn't great but it's not as bad as some would lead you to believe.

SullysCigar13d ago

Yeah,'s worse for Microsoft. It always is. Like the pandemic was the reason they weren't putting games out... and lockdown meant they had to fire 10,000 staff, despite Satya Nadella taking a 10% pay rise. It's not their fault. And now the FTC is being mean too, the big bullies!

EvertonFC13d ago (Edited 13d ago )

Hasn't stopped playstation from releasing great AAA games since launch during a pandemic and cost of living crisis which can't be said for Xbox who let's be honest apart from Forza, they've released nothing of any note for 2 and bit years since launch.
Halo failed and although flight sim is fantastic it's not really the Xbox gamers type of game if we're being honest.

purple10112d ago

Can't say Im surprised either when here in the UK, both X & S are being sold at below retail rrp. For instance

This deal here. Is now expired but was a good £30 below rrp

And everyone knows series S is available less than rrp everywhere too.

Meanwhile playstation raised price by £30 and continues to sell well!

SierraGuy12d ago ShowReplies(1)
+ Show (4) more repliesLast reply 12d ago
The3faces13d ago

Not just MS but pretty much every major Tech company are dealing with declining profits hence all the layoffs.

crazyCoconuts13d ago

This is just revenue. God only knows if there are any profits here

Flawlessmic13d ago

Mehh, if anyone can take the hit it's MS, they literally recorded record profits last yr with 187 billion dollars.

Flawlessmic13d ago

Lol people down voting facts

Thundercat7713d ago

Interesting to see for how long MS will keep taking a hit from Xbox and covering up with windows money.

Flawlessmic12d ago (Edited 12d ago )

Gaming is the biggest entertainment media today and only getting bigger.

Ms will wear whatever cost they need too, to make it happen.

70 billion on acti is proof of that.

There in a position where unless you have multiple billion dollar failures they will be fine.

Which is why I love them in 3rd place, it keeps Sony honest, while at the same time giving us great value for money trying to catch up to sony with no risk of them going bust.

As consumer we win cause the competion is in the game and the ones in last place have endless pockets and can continually try and add more value.

jznrpg12d ago

They can’t be losing money forever on Xbox . Eventually they will split it off or sell it . .

DeusFever13d ago (Edited 13d ago )

Declines in both hardware and software revenue is bad news. This likely means the market share for Xbox isn’t growing. Looks like only Xbox One owners are buying Xbox Series S. Microsoft isn’t making up for last gen when Xbox 360 owners switched to PS4. We’ll see from Sony if this is an industry wide trend, but with PS5 finally selling on demand and God of War selling so well, I doubt it,

zaanan12d ago

Also, it is unknown how many of the X360’s were dupe buys due to RROD, so it is possible that the X1 number might actually be their entire customer base.