
It's a new year and as part of this, Microsoft has shared its latest earnings results for the quarter ended December 31st, 2022 (FY23 Q2). Overall, gaming revenue for the company saw a decline of 13% year-over-year.
Xbox's "content and services" revenue also saw a decline of 12% and Xbox hardware revenue was down by 13%. This was offset by growth in Xbox's Game Pass subscriptions and the amount of Xbox users - exceeding a "record" 120 million in the quarter, as highlighted by Microsoft's lead communications manager, Frank X. Shaw:
For this same period, Microsoft's overall revenue was $52.7 billion - a 2% increase year-over-year. It follows on from the news last week the tech giant would be axing 10,000 jobs. This includes roles within its Xbox gaming division - with companies like 343 Industries reportedly hit hard by the layoffs. A year later, the company is also still battling to finalise its acquisition of Activision Blizzard.
While it's not all great news, this year could potentially see Xbox Game Pass grow even more - with titles like Redfall, Starfield and the new Forza Motorsport currently locked in for a 2023 release and each game a "day one" release on Microsoft's popular gaming subscription service.
What are your own thoughts about Microsoft's latest results? Comment below.
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[source microsoft.com, via windowscentral.com]
Comments 58
Games sell consoles and this new generation console been barren for two years.
Once the big hitters start to release hardware numbers will increase, not to sound like a Sony fan, but games sell hardware, not services. There is so many good games coming in 2023 and from what rumors suggest early to mid 2024 will look great also. Once COD is on GP day and date, that will drive numbers. Xbox is playing from behind from the One generation. It don’t flip overnight and having a weak Halo game and next to nothing AAA exclusive wise in 2022, that didn’t speed up the change they are looking to make. Still very confident in the path they are on for the complete turnaround. If by 2025 they are not deep into the plan they have laid out and customers are not buying in, then that will be a concern.
Gamepass has been pretty great for me up to this point( only about 1 month in). Now let's see what exclusives the system is getting moving forward so I can be happy I bought an Xbox!
There's also the people that are adopting streaming and will no longer buy consoles, and some of that is reflected in the game pass engagement they're promoting.
But go figure, release no hyped games and hardware stagnates. I thought for sure Grounded "out of beta edition" would surely spur sales...
Hardware and subs will spike when big games hit. By big I mean Forza and star field, not so much redfall.
More players, more subscribers, less revenue. Makes you wonder if putting all their eggs into the Game Pass basket was the right move
I’ve still got no reason to buy a series x
And here I am and what I’ve been saying all last year 2022.
Thank you facts and figures for letting me know I got it right, even though I got a far amount of stick on here for it.
And here is prediction for this year 2023
They won’t sell more consoles than they did in 2022.
They messed up the first two years and damaged the brand again.
@Green-Bandit
You have many good points and yes if they are not moving forward by 2025 which at the moment looks possible then it will interesting to see what Microsoft do.
Also if the ABK deal falls through they could get the hump and just let Xbox die.
@ABNJ i dont care as long as the give good games on the service..
if you ask me ..logically GP will jump to at least 15$ a month sometime this year...
but mainly they need to fix that 1$ GP multiaccount issue
@uptownsoul
It’s because it’s not going their way at the moment and I think probably never will especially outside of the USA.
My country the UK was a strong Xbox country
We took the series console in and enjoyed them Xbox messed it up yet again and let Sony and Nintendo get the general public gaming hearts of the country. We are now a PlayStation and Nintendo country and will be going forward.
Oops Microsoft did it again missed the first two year window of opportunity and will now sell a few and stagnate in the UK.
@Dezzy70 your constant monitoring of stocks was obsessive but you weren’t wrong 🤣 Xbox should have more games this year (Starfield, Forza) so we will see if games really do = hardware sales. They should.
@NEStalgia I agree, Redfall will not be a system seller and I wouldn’t class it as a ‘big’ game either.
I also think this year is gonna be tough for gaming, I think we’re gonna see some big flops, starting with Forspoken (lol). We’re in a recession and money is tighter for a lot of people that’s a fact. I think some big budget games are going to fail hard, but I can see Gamepass benefitting.
@Fenbops
It’s has to be the right games and very good PR for Xbox to shift more consoles.
They can’t just release the games and hope for the best.
They have got themselves outside of the USA a massive hill to climb, more than 2 years ago.
They will not recover over PlayStation or Nintendo out side of the USA, to late and it will be to little.
@Dezzy70 last year in the UK less than 60,000 units separated the nintendo switch in 1st place and the xbox series consoles in 3rd place
Green-Bandit wrote:
Traditionally you are right, and games are still crucially important, but Game Pass is slightly changing that narrative and services are more important than they used to be.
Look at the number of people that have jumped ship this gen, it certainly isn't the (lack of) first party games, it is Game Pass and Microsoft's other pro-consumer moves.
That said while it is a service, it is a service of games, so in that respect it's still games selling hardware, just games in the form of a service.
@Sakai that cheap series s made a big difference
How many people actually pay full price for gamepass ?
uptownsoul wrote:
I think you have to look a little closer at market circumstances.
That 13% reduction in Xbox hardware revenue was expected as it is compared to the same quarter the previous year that had Halo Infinite, Forza Horizon 5, Age of Empires etc. which all led to a large boost in sales, this quarter was never expected to match that with just Pentiment releasing.
It's also clear it hasn't "come to a standstill" as it's only 13% down on one of their better quarters since launch. In that light these are actually pretty good results.
@Sakai
Yes I agree with you.
But Xbox had the cheapest console of them all the series s and it is also a new console.
Xbox not going anywhere far or fast outside of the USA.
@ABNJ they didn’t have, overall, lower revenue, they had lower revenue in some areas but that was offset by increases in game pass subscriptions. How far was it offset was not noted in the article and I didn’t feel like looking the report to see if there is more info, but based in the wording, it might had resulted in either a break-even or an actual total increase in revenue.
That is exactly the most middle of the road case scenario, one where overall Xbox does not lose revenue but the source of the revenue shifts somewhat from sales to service fees. That is the opposite of having all eggs on a single basket (all money coming from services or all money coming from sales)
@Dezzy70 Xbox finished 3rd in US too.
@Sebatrox you used vgchatz, though. Soon people will queue to tell you how their data is unreliable unless it supports their own biases.
GP doing well. unsurprising.
the worry around GP will be when prices rise and loopholes close.
be an interesting year. MS have some games out. Sony have sorted stock issues.
@Dezzy70 I don’t think you are right at all.
I’m in the UK and have kids at school. Xbox Series S is the way to go for a cheap Fortnite/Roblox/Minecraft console for many parents. Those three games still dominate the classroom and Roblox isn’t on PlayStation or Switch.
Of course there are a lot of kids with Switches and many with PlayStation, but you’ll be surprised that Xbox isn’t being blown away by the competition. It’s competing.
This is not the same as last gen. Xbox has had some missteps but the current situation is strong and the future is bright.
@Kienda at most recent numbers xbox was approx 40% behind ps5.
thats still blown away imo.
especially when you factor in ps5 had stock issues and a price rise. Series console readily available and on sale.
its non existant in Japan, finished 3rd in both UK and US.
i do agree the future is bright, if Xbox deliver.
@Kienda
I really hope you are right and the presentation tonight is top notch as well.
Competition is good but Microsoft could have done and need to do a whole lot better else this generation will run away from them, as it is slowly doing now.
@stvevan
This is my point are Microsoft gonna get their act together, it’s like they are in slow motion speed trundling along and not to bothered.
The Xbox is slowly becoming a one country console the USA.
@stvevan
Yes I know it is their new Xbox slogan.
“ Third for life”
Not being funny, but if you are actually selling consoles, then you would expect user numbers to go up? Thats not surprising or a good result, that's a natural progression for a machine still selling surely?
Whilst its not the end of the world, hardware and software revenues dropping are likely to be what's behind the recent lay offs in the gaming division. Whilst they can afford it, they are not going to throw money at that sector forever if there's little growth.
I'm hoping this year will be much better for Team Xbox and they can start to realise the potential. Its all about them games, so here's hoping we see some!
@Sifi i bet there is a huge number who stacked with the$1 deal.
once that loophole closes and people are paying $15+ monthly it makes people think harder. especially by that point you would imagine most would have played the backlog and be waiting for monthly adds.
RE Sony, they constantly have sales for plus, if they didnt offer deals take up would be way down. it doesnt offer day1 games. but has similar number of games.
@Dezzy70 if by 2025 they aren’t in full swing of their plan and doing well. You and i are going to be off the train and saying nice knowing ya xbox. I ain’t sitting around forever, just cause i like the controller better than Sony’s HAHA
@Green-Bandit
The controller is definitely better than Sonys for sure. But that doesn’t make amazing AAA games😂
@Dezzy70 i know what you mean. I often sit and think to myself what would make me happy if i could have my way. I often see myself in my mind playing Sony exclusives with a Xbox controller. Granted some will say, you can have that dream, it’s called PC. That is somewhat true. But GOWR isn’t on PC yet and won’t be for a while. Sony games on PC are getting better and more of a focus now, but it’s far from day and date. As much as i know we love Xbox for our different reasons, it’s the games that count. Let’s hope this show today is fun and the good times continue with more good news and games, and a big E3. If so they can right a lot of wrongs quickly and finally be on track to execute their vision for Series consoles. Only then will we know if they have a winner or not.
@Fenbops Even without the bad economy it was going to be tough. We have 3 years of blockbusters all delayed to this year releasing. Games got comfy in that $70 position for a while because not much new came out. that has an unfortunate long term effect. But this year you have a bunch of megatons, all at $70, all demanding consumer money, cannibalizing each other's sales, and then a bad economy on top of that. I don't see how there's not a lot of race to the bottom pricing wars going on to capture that spend on some big titles. And then that ends up countering the $70 narrative because the market will just be trained to wait for the half price sales a month later, kind of resetting pricing downward.
Meanwhile, PS monthly active users are falling
https://www.tweaktown.com/news/89322/playstation-monthly-active-users-maus-fall-to-lowest-point-in-3-years/index.html
Also: PlayStation Plus has lost 1.9M subscribers since relaunch https://www.polygon.com/23434321/playstation-plus-subscribers-down-2022-earnings
And Steam is bigger than both, breaking record after record of concurrent online players, with more than 130m monthly active users.
Yeah, games sell hardware. But seems like people are buying Playstations for nothing.
@BrilliantBill
Good points made there, I get frustrated because Microsoft have in the 360 days been at almost top of the game and achieved amazing results and first party AAA games and second party AAA game deals.
Since then and even now, I don’t get why they don’t get back in that direction.
It’s like their 2 year school report could say.
Must try harder, could do better and gets easily distracted 😂😂😂
That decline will grow bigger. People going be hard find that will spend $70 for a game.
@GuyinPA75 Personally, I get big games on sale, and very rarely pay full price. But I am willing to wait and play my backlog in the meanwhile. Gamepass allows my cheap self to play a subset of new games (granted, small for the past year or so) without the extra investment. The S is a dream come true for me, lowest cost next Gen console and a library of games for a reasonable monthly fee. And the rewards program further helps with cost, either subsidizing GP or new game purchase
@uptownsoul Same thing with PS5's though. Contrary to what Sony claims, there are always PS5's at my local Walmart and Target. It's been that way since at least last Summer. They always have PS5 digitals and always have Series S consoles.
@Green-Bandit
I’m calling it tonight in the presentation.
Disc less Series X £330 UK price.
Creating some direct competition and a boost in console sales and some much needed momentum for Xbox.
I may moan about Xbox but with the series x they made an amazing console.
@Dezzy70 i would love that Series X model as I think it would do wonders for the brand, but i think this show is trying to set itself up as a little taste of games that are nearing release and keep all big surprises and announcements for E3. I would love to be wrong and see something like this there. My personal wishlist for a surprise if they were to have one at the show would be showing off a better build of the new home dashboard. I really want to see Xbox trim the fat off the Ui and make it even sleeker, faster and reliable. As much as i try and turn myself into a PS5 fan these days of their controller and Ui i am still very much a fan of the xbox way. I am just tried of having no big games to play, and playing on my PS5 more cause they are able to get more games out. Last of Us on PS5 and GOWR literally had me thinking of starting to buy 3rd party games on PS5 again and turning my xbox into an exclusive machine with GP. That would be the first time since PS2 that i bought and made PS my main platform. 360- Series X xbox has been my main place i bought and played games. So 2023 is a no BS year for me, Xbox has to deliver.
@Green-Bandit
I think you are not alone.
Xbox need to produce this year and big style as well.
@Green-Bandit
Here go, come on Xbox bring it with style.
@Dezzy70 that was a great show, and i think they now have a good format to use. Redfall looks amazing to me. Can’t wait until the Starfield show. Hope it is done in similar style.
@Green-Bandit
Was a good show and I think they have found their very special format for shows.
Noe you have that Xbox, don’t change it.
It is your format your identity and it worked extremely well.
@Dezzy70 of course the sony fan boys over at N4G are ripping the show, but Forza makes GT7 look last gen and Redfall looks really good and of course we still have Starfield to go, plus E3, not sure how that could be looked at as a bad year. Unless they really screw up E3 and i don’t think that will be the case.
@Green-Bandit
I give Xbox a lot of stick as you know.
But fair play that’s a good presentation and very well presented.
They need to stick to this format.
No Forza date I don’t care as I think it will be September 2023 now and Starfield November 2023 as I have always said.
@Dezzy70 very good format, i am going with July for Starfield as that was the leak online and Forza is a toss up, something is holding it back from confirming a date. People are saying Redfall looks like a Xbox one game, i mean Xbox can’t do anything to please certain people. If that looks like a Xbox One game to them than so be it, but you and i know that is more of just the haters finding anything and everything to hate on.
@Green-Bandit
I like Redfall especially as it has vampires as well and it looked well thought out with some good campaign longevity as well.
Shame I didn’t get my series x disc less 😂
@Dezzy70 for real, i am all for some new hardware, including the much needed Elite 3 Pro Xbox controller. I want it day off and hope its made to last.
@uptownsoul Sony is the more popular name in casual gaming, they will not be down in hardware sales for a long time to come. Many gamers will switch over to a PS5 from PS4 when they can find one or afford to, or the few games they play make the jump over to PS5. MS is the underdog in gaming and much smaller in mindshare, they will need big heavy hitting games that make causals come over that normally wouldn’t buy an xbox.
@Green-Bandit
You are spot on there about the mindshare.
@Dezzy70 @uptownsoul not sure who told you or how you came to the conclusion the Series S would take away from PlayStation. I would enlighten you as it’s a continuation of last gen approach for xbox having 2 sku’s at different price points. Series S with gamepass is for sure more casual and priced right for that crowd, but it’s not intended to sway people from their PS4’s and PS5’s, its intent is to bring players into the Xbox ecosystem and having prices for everyone .PlayStation as a brand is more popular with all gamers worldwide. The COD, Madden and FIFA crowd are all on PS4 and PS5’s just as much as hardcore gamers are on PS5 such as myself. Here in America Xbox and PS are separated much closer, but throw in worldwide results and PS is by far the bigger draw. Theres a reason Jim Ryan is agianst the COD to GP deal. That is a large chunk of PS sales that could, keyword could make a switch if they find a cheaper service works better for them and their friends, to play COD on GP. I love both my Series X and PS5, they offer different games and have some great IP’s, but i am no fool to not think the PS brand is right there with Nintendo as the default name and place to play among gamers. However as MS continues it quest to bring in Mobile, Console and PC, they will have a lot of active users in their ecosystem and that will over time prove good for them. But Sony is buying into PC and Mobile more these days also and that will get them to even more users. The battle is with casuals and has been for a long time, just ask the wii and Switch how much they care they don’t have PS’s users and SSD loading speeds.
@Green-Bandit
Absolutely I know some with a PS4 and PS5 that just play COD AND FIFA and is it really.
And of course online with friends.
That is the market Xbox need to get as well.
As for Nintendo, with the hybrid console and their game characters and AAA exclusive first party.
Not worth going for, there is only one Nintendo, that are doing extremely well right now.
@Dezzy70 Nintendo’s only competitor is themselves. Don’t pull a Wii U and give some power to the machine for 3rd party and they can sell 100 million in their sleep. But yes PS, has the mindshare of more gamers than xbox and rightfully so. They have outside of PS3, made less mistakes than MS and delivered great games. I have no issue with why or how PS has become a household name. It’s not like Xbox is selling poorly this gen anyways, they could easily hit 80-85 million or more, is that more than PS5? Of course not, but it don’t have to be. They just need to worry about people that want Xbox’s not the ones that don’t. GP is the real problem here for Sony cause if it takes off and becomes huge in the next 3-6 years and gains more and more, that will be something Sony will have to respond to and don’t want to financially. If it don’t take off then that is back to the drawing board for MS. But Sony and Jim Ryan are uneasy about GP and games like COD, Diablo, Starfield and Elder Scrolls, Fallout coming to it.
MS is playing the long game. After the terrible XOne release and new leadership, they are making the right moves to rebrand and build back a lost customer base.
GP is doing so well even Sony had to upgrade their own meager offering, even though it still sucks. The tier system is a total joke. Xcloud makes GP an even better deal with play anywhere for a large % of GP games. Sony's remote play is terrible. Oh yeah, and and unlike Sony, MS doesn't pay developers to not develop games for Sony.
Frankly I don't want MS to pull into 1st place. By always being slightly behind it encourages them to keep focus on making gamers happy instead of shareholders.
@uptownsoul i don’t disagree with you on those points, but again the S wasn’t ever intended to. It was simply a cheaper lowered spec console to get more people into xbox ecosystem the same way the One S was and for the most part it does that. Plenty of people i know and have seen post here and other sites have snagged a S or even two. But at no way shape or form is it going to sell 1 to 1 with PlayStation. PlayStation at the moment is in a league of its own when it comes to popularity amongst gamers. Truthfully I have a PS5 and it’s the best Sony console I have owned in a while and i can see why it’s popular. To me the PS3 and PS4 were just so so. I enjoyed some of the exclusives of course, but the six axis and Dual shock 4 were trash to me. So i didn’t play 3rd party games on either. But the Series consoles are selling just fine, outselling the One at this point in its life easily and even on pace the last i seen with the 360. No reason it won’t end with a successful sales number. But it won’t outpace PS5 or the Switch. Which brings me to my last point, no system needs to sell 100 million to be fun, enjoyed and respected in the industry. Sure sales matter to a degree, i am not dismissing them. But MS sells more than enough to be a solid part of the industry, and now that they have full Microsoft support to be in gaming for the long haul and given blank checks to compete, it would only make sense they will get stronger and stronger. COD on GP, Diablo 4, next Fallout and Elder Scrolls amongst countless others coming and staying on GP day and date. That is a strong contender to continue to grow and crave it’s niche into the market. By next gen America can be fully back to a bigger market for Xbox than Sony. Japan is never going to swing Xbox and Europe i would think at best would be 50/50. You are smart to the industry, you know things change all the time, and while Xbox has a lot of dirt to wipe off it’s face with the One generation, it has a plan for that and it seems to be working, slowly cause the games aren’t ready. But when they start to drop, this gen will be a success for all 3. Hey isn’t that all we could ask for as gamers? Healthy competition between the Big 3!!
@uptownsoul With no major release in 2022, they were going to go down in numbers when the following year had releases. It’s about that simple really. At the end of the day this is a 2 trillion dollar company playing the long game to get back into the good graces of gamers after xbox one, they are fine and when the releases start to come out the hardware sales will jump back up.
@uptownsoul no i mean i get what you are saying for sure. I think the lack of heavy hitters hurt, add in GP didn’t have too many heavy hitters as a result and here we are. Much like i said in previous posts, Xbox has dirt to get off their face from the One, and with the plan they have, it’s their best shot. But is it fair to ask if the brand has been too badly hurt from the One and the popularity of PS4? I mean it’s possible this takes a lot longer and or can’t be fixed. At any rate it’s a long term plan and something i don’t think a year or two makes go away. PS5 is and will be the main console to get in the general public’s eye. It’s MS’s job to change that and 2022 did not help their case.
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