Xbox Hardware Down, But Gaming Revenue Slightly Up Amid Game Pass Growth

Microsoft has released its financial results for Q3 of its 2023 Fiscal Year, which consists of roughly January through March of this year. The company reported that Xbox hardware revenues were down while Xbox services and content revenue was slightly higher thanks to Xbox Game Pass. 

Xbox hardware sales are down 30% while Xbox content and services are up 3%. Xbox gaming revenues are down by 4% overall. Microsoft CEO Satya Nadella said that Xbox gaming subscriptions, such as Game Pass (see below), reached $1 billion in the third quarter. Despite this growth and revenue, though, Microsoft did not release new numbers regarding Game Pass subscription count – the latest count was 25 million in January 2022. 

Microsoft has explained that the drop in hardware revenues is due to comparing this year’s quarter to last year’s quarter, when console supplies were higher. 

Microsoft also released some numbers. 

• The revenue was $52.9 billion (up 7% in constant currency or 10%)
• Operating Income was $22.4 Billion, up 10% in constant currency (or 15%)
• Net income increased by 9% or 14% (in constant currencies)
• Xbox Hardware Revenue is Down 30%
• Xbox Content and Services Revenue is Up 3%
• Xbox revenue overall is down by 4%

These results arrived yesterday, shortly before the Competition and Markets Authority, a U.K. regulatory agency that serves the same purpose as the Federal Trade Commission in the U.S., blocked Microsoft’s $68.7 billion acquisition of Activision Blizzard today. More information can be found here. 

What would you like to see Xbox do in order to improve the revenue of Xbox hardware? Comment below to let us know!