Xbox Hardware Declines But 'Content & Services' Grows In FY25 Q2 Earnings Report

I'm glad I got in when I did, I love my series X and since it'll be the last Xbox it'll get the most support (big presumably)

Nothing new pretty much.

I am really interested to see next xbox as Phil mentioned “competition by features” and less focus on exclusivity. Can they pull off something as cool as quick resume for example. And probably the controller update.

@Overzeal

I think they'll still do perphiral hardware like the handheld and we know that Xbox has at least one console planned, but yeah Xbox is going to be retired in probably less than a decade.

These numbers just reaffirm the multi platform plans - especially after the other article where 64% of December revenue was through PS.

I’m tired chief, these numbers are quite bad, beyond hardware sales which MS seems to just have given up, they had a legit great Call of Duty launch, overall the best quarter ever for Game Pass and revenue not only didn’t grow but shrunk?

Even if GP itself grew by a tiny amount corporate MS is definitely not happy and I see why they’re turning Xbox into a third-party publisher almost overnight without caring for long-term health of the platform, they need that revenue up ASAP to justify shareholders the expense of ABK, which has now proven to be a mistake, it has put way too much pressure and scrutiny on Xbox/MS Gaming from investors that just don’t understand the gaming industry with nothing in return so far, not even most ABK games on GP or new games beyond Call of Duty, or even the same revenue compared to the same quarter last year, quite brutal.

@VoidPunk depends on how bad next xbox sells. If it sells like series or slightly less then they keep going until cloud becomes a real thing.
Also prob new handheld will offset those reduced sales.

Alas Series X, old friend, you were and are a fine machine, such a pity you sold so poorly compared to rival consoles.

On the upside Microsoft is making bank on going third party! And now my TV, phone and switch are Xboxes too!

Hmm.. why did I buy you again?

@Millionski tbh I hope Microsoft keep going with console's I brought a pro and series X around the same time and I'll admit I prefer the series X over ps5 and I've never been owned a Xbox before Ive always been playstation

@Millionski it more depends if they can shift GP users from console to PC or tv/fire stick or whatever.

MS has all the R&D costs, losing money on each console sold (or they were last I knew). If they had gp numbers elsewhere they would drop consoles as it’s just an expense.

But considering something like 80% of gp is on consoles, they will have to take the hit. MS really need to find a way to get PC players onto gp, but I don’t see it happening quickly.

I think they will keep doing hardware until:
1) it completely flops. Thats not 30M in 4 years my friends. I am talking 3-5M so it simply does not cover R&D, marketing and distribution of new console.
2) Cloud becomes real thing. As good as native gaming so if they stop doing consoles, people shrug and keep playing on their smart TVs via cloud.
3) They figure out these xbox interfaces on PC and PC/xbox hybrids become so good that it takes best of both worlds.

I personally believe nothing of these 3 scenarios happening soon: people will still buy next xbox, same people that like their series s/x and GP. Maybe less sales but still 25-30M or so.
Cloud is too far away. I heard promises of cloud 10 years ago already when sony bought gaikai. Its too undercooked for now.
These PC-xbox hybrid is just a fantasy and will be neither good console neither good PC for a while.

I think the next Xbox will be the final one (as I also think the PS6 will be the last PlayStation).

I can see Microsoft going all out for its final system(s).

A handheld and an all powerful, AI driven, Windows based beast that can access PC VR games, Steam and therefore PlayStation games.

@PsBoxSwitchOwner exactly and thats good for us xboxers. I bet if they could launch GP on PS/N, they would drop xbox already. But they tried and could not. Also until GP is natively on steam - it will be a fraction of total GP subs. People just ignore what is not in steam. Its that good

@SMJ which basically is a PC that would be overpriced. Also does not seem like they have figured out xbox OS/interface on PC and we all know any overlay on windows wont be as seamless as console.
I say these PC/xbox hybrids are fun experiment if it happens but dont see it as something real & sustainable

@Ajfennell77 mate I have a ps5 PRO but I play ninja gaiden 2 via GP on xbox rn, next month avowed and so on. Thats how it works honestly. You naturally spend more time with xbox and GP and other consoles become secondary.
I now have a buying remorse with a PRO. But i guess i will skip ps6 on release and play those crossgen exclusives (like gow 2 was ps4/ps5) on PRO with PSSR prob ok. And then buy ps6 only when it get exclusives so likely when slim/ps6 pro launches.

@IOI I think it’s a decline compared to FY25Q1 only? Apparently Microsoft made 468 million revenue, which is down 7% compared to the quarter before that. That’s amazing revenue, most likely much more than FY24Q1 and FY24Q2, but cant really find exact numbers tbh.

@Millionski least it ent just me who is regretting buying the pro...but I wish I brought the series X at launch

@Millionski I don't think that Microsoft will be the only manufacturers of the next Xboxes tbf.

@Friendly It's year on year so FY25Q2 is being compared to FY24Q2 (October - December 2023).

Game pass was and is such a gamble for Microsoft. The average consumer doesn't understand it and even Rockstar's CEO and many others in the industry has said how those type of services just aren't profitable in the long run. I'm not gonna pay more than $20/me for games when they inevitably raise the price again.

@Friendly @Grumblevolcano as it’s YoY it also has to factor in the GP price increase that happened last summer.

Wonder how it would look then.

@Millionski it will never land on PS - in its current state - Sony wouldn’t have the 3rd party deals on there.

My belief? A ‘mini’ GP will land on ps. It will have all MS first party stuff (which is still plenty) and it will operate like Ubisoft/ea does etc.

Well don’t know to much about these numbers
But sort of enough to think that don’t look to good percentage wise down and a tiny up tick.

You can never tell what Microsoft will do with Xbox next, it’s just a strange waiting game.
But I guess the big boys won’t be happy with those numbers that are posted.

As for game pass I know a good few mid 20s that game a bit.
They totally have and understand Netflix and Disney plus, Amazon Prime and Sky TV.
But as for consoles games as a subscription
just are not bothered. They would rather buy a game when they want one and this that.

To me either general public aren’t not aware of game pass, are aware and don’t want it.

If they put Steam on the next xbox or PS (I'd lean more towards xbox for it but both systems have similar hardware) it's a massive gamble. Mainly as it's opening up another storefront that cuts out MS's/PS's own. Games on steam can be picked up a whole lot cheaper than on MS or PS stores. Plus you could buy the game outside the ecosystem and just cut them out entirely.

It would be great for us gamers but, on a business front, its just cutting off a revenue stream.

@Weebleman Exactly, that’s why I’m not convinced by the pretty talk of Phil by suggesting the idea, it’d either have to be a near $1000 console considering it’d have to be more capable than a PS5 Pro or just have at it again with closed software console, imo neither option has any chance of success in this multiplatform timeline they’re now..

@IOI I am interested to see what the innovations are they come up with for the box in development. My only concern is they may push a streaming only machine. It would tick all the 'revolutionary' boxes they mention and cut down on hardware costs, but streaming is just so hit and miss. It's not for me personally but I know some folks in here and other sites are fine with it. Outside the US, the infrastucture just isn't where it needs to be for everyone to get the benefit of it.

In terms of earnings, MS just had 6 billion wiped off its share price thanks to the AI app from China, so no doubt there's a few conversations going on around that.

Its a weird time for all console makers at the minute so it will be interesting to see where they go next. Thats not even taking into account if steam bring a box out as rumours suggest.

Awful numbers, they should have ported Indiana Jones to other consoles day one, and I'm sure they will do so for Fable, Perfect Dark etc.

@IOI so why are you worried about it, how many times to phil have to tell you that they’re making consoles, or have the console wars are so ingrained in your minds that is that you only based companies success on, because it does sound like you want xbox to fail unless they give you exclusives, or is because you’re afraid of changes in the narrative

@themightyant you know, that's actually an angle that fits with the multiplatform approach also. A premium machine aimed at the loyal fanbase were you know sales won't hit super high numbers, but in the scheme of things, does enough numbers while gaps are filled with sales on other platforms/xbox anywhere.

Interesting.

Who'd have thought not having exclusives would mean you can't sell consoles as easily as if you had them?

@donv2135 Phil or anyone at Microsoft could say it 100 times and I wouldn’t believe it, with their track record you should know better than trusting every word they say, and it’s not even that they are lying (tho sometimes they definitely are) but mostly they don’t even know what their plans are going to be in 6 months.

@IOI one thing plans can change and second, if you don’t believe them anymore, just go over to playstation since they always know what they’re doing

@IronMan30 Someone who isn’t still stuck in the early 2000s?

@IOI also, at least you admit it, rather than denying it like other people would do

People shouldn’t be taking this too seriously

I think I would game exclusively on an XBOX handheld with decent specs.

@donv2135 You missed my comments where I’ve been pretty critical of PlayStation too, in fact I said this year Xbox could’ve finally capitalized on their mistakes but they choose to shoot both their legs off, being critical of a brand doesn’t mean I’m obsessed with the other one, if I were a troll I could simply say “hehe Xbox dead no exclusives” but I keep elaborating on my frustrations on what they’re doing because I enjoy tf out of my consoles, if I didn’t have an Xbox I wouldn’t even bother to be here discussing.

Go multi platform just as you finally have a steady influx of exclusives in the pipeline….jeez

@IOI if everything that Phil has said becomes a reality. Then the next gen Xbox could be an open platform. So it all depends on how they implement it. If they follow the Windows 11 app store route. Then the Xbox store is still the main hub. They may allow stores like Steam, Epic & GOG catalogue to be fully browsed within the store & purchased. For which Microsoft takes 12% of each purchase. Or they will allow you to download the launcher from store. Which bypasses Microsoft altogether. But requires the developer to pay a one off admin fee of $99 to use the store.
As for hardware. They have talked of 3rd party consoles. Which could mean that Microsoft may partner with Valve. So as well as an Xbox console & handheld. Valve has a future Steam Box & Deck with Steam OS. Tencent, Samsung & Sega could be good partners for the Asian market. So the more who are invested in the hardware the cheaper it becomes. They may also license out to OEMs. So the next Xbox doesn't necessarily have to cost $1000

I worry about third party support on the next Xbox. It’s going to sell less than XSX|S, that’s already a given, with no exclusives (except Redfall lol) and a much higher price point. I fear third parties will be more likely to port to next Xbox either much later down the road or just skip it entirely, if they can’t secure a Game Pass deal on day 1. And obviously most won’t get a Game Pass deal, that’s just statistics.

These figures have no doubt been discussed and debated in HQ for several weeks, and I suspect have been the driving force behind the recent press releases and interviews doubling down on 3rd party publishing.
If a product as good as GP, with a really good COD launch and the excellent Indiana Jones game can't grow more than a couple of percentage points, then they must assess that the whole concept has failed.

I continue to hope they aim high end with a TV pc as their next hardware project. One things for sure, the software publishing arm is strong and is likely to remain so.

Unlike others here I do prefer to play on ps pro given the choice, but my series X remains a good GP machine and I really want Xbox to be a hardware manufacturer still.

But overall that means it’s an overall decline. Surely?

@Casco not to say every future game will be multiplatform

@donv2135 well, data suggests people DO select which console to buy based on at least perceived or actual exclusives. Sony sells plenty of PS5's and Nintendo sells a lot of Switch consoles, while MS has trouble selling Xbox. The former have actual and perceived exclusives. So I'm relying on what's happening now, not some nebulous theory that people who act like they're "unbiased" try to push. People decide which console to buy using a few factors, one of which is, "Which has the games I want that I can't buy anywhere else?" Denying that is just ignoring reality. People have finite time and money. Whatever makes their decision-making easier, they'll use as a metric.

@IronMan30, i’m saying as i own both, i’m criticizing the people who made it there entire lives, and data suggests doesn’t mean it’s accurate,

@IronMan30 again, i’m not saying you’re wrong for believing that, but not everyone cares about console wars nowadays

@IOI well, i’m saying it’s fine to criticize, but i perfer not to be a negative nancy and ruin other people’s perpection of xbox

and please don’t blame this on DEI, i’m not saying you guys are, i saw comments on other sites blaming DEI for hardware decline.

@Cakefish, You didn’t see that Square Enix is not doing playstation exclusivity for Future Major Games?

@IOI it’s gets grating after a while

believe me, i understand that you guys want hardware sales to improve, but all this negativity is encouraging the xbox is dead narrative

and don’t call me a shill or white knight, i understand you want xbox to improve hardware sales, but there’s other ways to help that instead acting like xbox is dead everytime you see hardware sales decline

We shouldn’t have to act like Negative Nancys, everytime we see something we don’t like.

@Cakefish on what statictics are you basing these opinions on?

@donv2135 Wii U, PS Vita, and Dreamcast are examples of consoles that didn’t sell enough units to attract sufficient third party support. I really don’t want to see that same fate happen to the next Xbox.

Nothing new. I mean if they want consoles with software/hardware gimmicks sure, or to release early like 360, and others have sure by all more.

Xbox still has a sizeable audience. The 50 mill Xbox One as still something. Microsoft makes deals that work out for third parties to still release on there console or cloud or whatever as if EA part of Gamepass wasn't a sign.

Japanese third parties don't much but it is a challenge for them to make a game appealing enough for the platform or release later when they can. Sure the odd niche/AA releases on Xbox but not for long or make much impact. Seeing a Yakuza/others on there is fine but Danganronpa or other AA type releases yeah they go to Switch/PS platforms for a reason for western sales/Xbox very late.

Xbox has never had issues with western third parties in the way a Wii U or Vita didn't get enough sales & such but still had some deals. Casual releases ended up on them, easy Just Dance/Lego/others. Sure not hardcore audience games but i mean I didn't care for them on Wii U/3DS/Vita anyway.

Then again no Far Cry on Switch? Every Just Dance/AC/other IPs to a point are. Logic. It's up to publishers/what IPs. Far Cry 2 isn't remastered, 3 is for PS4/Xbox One.

Wii U still had crossovers & more like Tokyo Mirage Sessions/Smash characters, other examples.

N64 didn't sell as much either, had third parties, Saturn didn't but yeah it's sales and hardware complexity and well EA lacking sports or others during Saturn/Dreamcast was a factor beside well marketing.

They all had their differences. Xbox won't suffer like those did in those ways. I see it being around a fair amount with services or the console unlike others too little of sales and third parties just being pathetic. 3DS sold well enough yet western third parties were like eh throw a mobile port at it. Yeah great. Go get stuffed. Success means nothing it's up to the deals made or if THEY care about the hardware/audience which they clearly didn't and that example I think proves enough 'for a time at least' how things can be.

2010s onwards was clear of if they want to mess up on mobile then learn from it they would as audience size was large but they'd rather mess up then actually go with 3DS/Vita and scale games to it with console mentality audiences but audiences with a smartphone and take years to learn because they were too money hungry and stupid to put console like games on the device then suited designed games like Indies did and they proved they would and not care in the slightest how they released them and the many bad Lego or others with mobile in mind made them go ok ok we won't be lazy and actually release 3DS/Vita games well not bad ports or lazy games.

Not like it doesn't still happen even with them learning how to make use of touch screens or game design to work for a platform or just 'oh it's powerful enough put it on here console quality game on mobile because reasons' XD (even if DS should have been a sign of that with gestures not touch buttons (or motion used in certain situations then replacing buttons of Move/Wii) but idiot developers and publishers at work here after all).

Part 2:
The games and OS need to be good because I couldn't care less. Quick resume is nice but I don't use digital so it doesn't benefit me even if I think it's a cool feature. Back compat/store apps are cool but doesn't matter anyway to many people. No other console/PC owners care you can have a CD app or a different then Spotify app on their PlayStation or Nintendo system they just use their phone or Spotify instead anyway. I'd rather use my preferred apps on my Xbox that aren't Spotify or other limited apps on other consoles or local phone files/apps instead anyways.

I still enjoyed the Wii U/Vita libraries when IPs I didn't care about weren't there I wasn't missing out.