Xbox Gaming Revenue Up 1% YoY In Latest Earnings Report

Surprised at seeing any growth given the only “big” game released so far has been RedFall.

Next earning report will be very interesting, post the release of Starfield.

This is exactly why the ABK acquisition is so important to Microsoft.

It knows it won't overtake PlayStation in hardware, so it needs to up Xbox revenue somehow to offset hardware losses.

@Tharsman They did release HiFi Rush and Minecraft Legends.

@AverageGamer different quarter, but continuos sales of those across multiple platforms (pc, switch, and PS for Minecraft) likely contributed to that 1% growth. Being off-quarter means they didn’t add that many sales, though.

@Total_Weirdo I saw Xbox advert the other day on Netflix and that was the first one I had seen in years. I have the cheap Netflix plan that has commercials.

@Tharsman and forza ...

@BleedingDreamer microsoft are the ones that power the advertising

https://about.ads.microsoft.com/en-gb/blog/post/october-2022/how-microsoft-will-power-netflix-new-ad-supported-tier

@GamingFan4Lyf
poeple seem to not notice this....but MS is after publishers that has games that consume lot of time...zenimax=fallout 76+elder scroll online+ fallout SP and starfield and elder scroll and other RPGs with +200h of gameplay and infinite mods .....ABK is of course a multiplayer leader....the plan is to keep everyone subscribed forever thats the main reason for all of this not king or mobile like they say ABK will provide them a huge GP boost

@themightyant the strange part is that is not like that. Around me it was easier to find Series X in 2021 than in the last 12 months. And Phill Spencer mentioned they were trying to fix that during June's Microsoft showcase so it should be fairly common across most markets (maybe apart from US)

Hardware Revenue is always going to be a 'difficult' one with Consoles being sold at a 'Loss' and its all the peripherals - extra controllers, headsets, money from 'licensed' 3rd Party accessories like Expansion Cards etc, that help offset the losses.

Sony for example have Face Plates on their Console - another way to offset their losses on every unit sold. The more 'Consoles' you sell, the more 'peripherals' you'll sell, more face-plates etc...

The fact that I don't 'need' to buy a Series S/X console to be part of the Xbox Ecosystem, play Xbox games day/date etc isn't helping. If you have a decent Gaming PC set-up, you don't need a Series console at all but maybe opt to buy PS5 to play Only on Playstation games. There is 'no' ONLY on Xbox games - thanks to PC's and even Cloud now...

I had mentioned the supply issues with series x previously, but a few people didn't believe me for some reason, even though the evidence was obvious the whole time.

It was not surprising at all that they mentioned the issue themselves at their E3 presentation.

They need to do better

@themightyant they should be disappointed no argue on that but it may well be that is on them as well as some lack of demand for the product.

@BAMozzy Sony isn’t selling the consoles at a loss. They’ve been making money on them for at least a year now if I recall correctly.

Of course their gaming revenue is up. They're the leaders.

@FatalBubbles Sony is broke. That's why Microsoft purchased Activision and Sony didn't.

@TakeItEasy Yes, exactly what you said. This is why Microsoft's priority is subscribers, not console sales.

@themightyant as @Balta666 stated, it’s been hard to get your hands on Xbox series x in the US for the last 12 months. It did seem to improve after the showcase. The UK (nor EU) has never been a strong market for Xbox, American countries always been a lot more friendly towards Xbox, though. So, in the west, it’s been a lot more supply constrained.

I do expect Starfield, Forza, ABK games in GP, all of that should boost the games going forward, but I doubt MS cares to try catch up with PS on console sales. So long they have a healthy gaming business, they don’t mind it being split between console and PC users.

These numbers are nothing short of absolutely pathetic. I know investors are probably thinking this entire division isn't worth the effort. So far - after multiple decades now - it simply isnot.

@TakeItEasy The only flaw in that logic is that it's cheaper to buy the game outright and play it over long periods of time than it is to keep holding a GP subscription.

I mean, most people hopefully use GP to play multiple games (as intended) but subscribing for one game (like CoD multiplayer/Elder Scrolls Online/etc.) doesn't make sense.

I do suspect a lot of people will subscribe for Starfield, binge the crap out of it for a month or two, and then cancel once they've "had their fill". The hardcore fans who want to live in the game for the next few years will be better off buying it.

@Cashews How are they pathetic?

@Lightning720 1% when you have next to zero market share? Hardware DOWN of all things after three years of nothing?

In what way is this a positive? How can you put any positive spin on this? There is nothing, and I mean that quite literally, nothing positive in this.

It is making Microsoft's entire brand look bad. It is a drag on the company from a branding, profitability and an allocation of resources perspective. Frankly, I don't understand why they keep it afloat. I understand even less why they'd deplete their cash reserve by a whopping 60% for a company so many people loathe. ABK is still getting terrible press - which for some reason Purexbox is avoiding.

@Cashews utter nonsense. Windows is down much more than Xbox. Does that mean Microsoft should ditch Windows as it makes their figures look bad, and is therefore a drag on branding, profitability, and an allocation of resources?

People loathe plenty of companies. Apple, Google, Meta, Sony PS, yet they still make a lot of money. Companies don't shut down their products because some people loathe them.

Any deal tends to get bad press. ABK is no different. That doesn't mean Xbox shouldn't push ahead with it, especially when the average consumer won't know about the deal or care.

Thank you for confirming what I had already suspected - you don't really understand business, but don't worry, most people online don't yet still feel happy to share their "expertise".

@GamingFan4Lyf I agree they need to increase revenue, but how can a $69 billion payment offset any increased revenue. Would take decades surely?

@Angelus3K It's called "playing the long game".

Plus, I think Microsoft is setting itself up to become a major third-party publisher rather than a full-on platform holder (at least, not in the traditional sense).

I think Microsoft will try one more traditional console, but if it continues to be a loss, Microsoft will figure out a way to provide TV gaming - but without all the extra R&D required for a traditional console. Also, Microsoft will make all future games available on all platforms.

I think Microsoft will still make gaming hardware and call it an Xbox, but I don't see it being a custom hardware machine anymore like we have been seeing. I see Microsoft just selling gaming PC's for the TV: using commercial Intel/AMD CPU and Nvidia/AMD GPU.

I don't think Microsoft will go full-on streaming only.

Yea that’s a good point. I think it would be a great move for them to go completely multi platform.

@Romans12 I can’t tell if this is sarcasm or not? MS bought them to get back into the game.

@themightyant I understand what you’re going after but aren’t they simply just saying it costs them less to make it than it does to sell it?

I would likely agree that all the R&D and marketing are not being considered as they aren’t COGS. Distribution might be, unsure on that one.

@FatalBubbles GP is nearing 50 million subscribers, PS Plus isn't. Microsoft has trillions, Sony doesn't. Microsoft wins. No debate.

@Romans12 50M???? I would love to see evidence of that. The last reporter number was around 29M in February 2023. There is zero chance it doubled since then. As of May 2023, PS+ was 47.4M subs.

It appears that you have the numbers completely backwards.

No great surprises here at all and Microsoft can offset the losses due to the size of the corporation. They will stop making consoles in the next 10 years and Xbox will become cloud and streaming only. That’s where there focus is.

@themightyant Ah I see so it's basically what Sony did with PS Now and called it PS Premium tier.

I think my IQ halved just reading some of the replies in here.

These figures are not great, and given that MS has been saying all year that they have lost the race and are a distant third place, anyone suggesting they are a victorious mighty empire in the gaming space must be on crack. The very reason they have bought ABK is because they don't believe they can compete without doing so.

Anyone who actually cares about games and has an xbox should be happy as despite the continued failure to capture more of the market, such a huge investment shows they are still in the game, and competing harder than ever to turn this around.
The result is better services offerings and games coming to those of us who have invested in their ecosystem and that's all I care about. Anyone who is more interested in corporate profits or bragging rights for kiddie console wars simply isn't a games player and is therefore simple to ignore.

@GamingFan4Lyf
Starfield is 80$ that alrady 1 year of gamepass ultimate
Not everyone is ready to buy a single game with that price to see if they like it (européan poeple forget that south america asia africa has 80% of world population and are not being paid dollars and euros)

Most of poeple pays for GP thinking they will play 100 games but they got jobs and studies and end up trying games but only playing 5 or 6 the hole year...which still beneficial but not as much as planned but poeple still do it....you assume consumers are thinking wisely and are perfect...no they arent and companies knows that so they use it.
A simple equation...give poeple games that can be played for hundreds of hour and they will stay subscribed