Xbox Reports 2nd Best March Quarter Ever, Gaming and Hardware Revenue Drops - Sales
by William D'Angelo , posted on 25 April 2023 / 5,512 Views
Microsoft has released its earnings report for the third quarter of the 2023 fiscal year, which ended up March 31, 2023.
Xbox gaming revenue declined four percent year-on-year. This is the second best third quarter (January to March) ever for Xbox, only behind last year.
Xbox content & services revenue increased three percent. This was due in part by "growth in Xbox Game Pass." Xbox hardware revenue decreased 30 percent year-on-year. This was due to a "prior year comparable that benefited from increased console supply."
Xbox gaming and Xbox content & services revenue performed better than what Microsoft forecasted. Xbox gaming was expected to drop in the "high single digits," while it actually dropped in the low single digits. Xbox content & services was expected to decline in the "low single digits," while it ended up seeing growth in the low single digits. There was now forecast for hardware revenue.
Overall, Microsoft reported revenue up seven percent year-over-year to $52.9 billion and net income up nine percent to $18.3 billion.
Microsoft CEO Satya Nadella in the earnings call for Microsoft said the quarter saw a record number of monthly active users for Xbox, as well as a record number of monthly active devices.
Revenue from gaming subscriptions was nearly at $1 billion for the quarter and lifetime unique users across first-party software have reached 500 million.
"We set third quarter records for monthly active users and monthly active devices," said Nadella. "Across our content and services business, we’re delivering on our commitment to offer gamers more ways to experience the games they love, while revenue from subscriptions reached nearly $1 billion this quarter.
"This quarter we also brought PC Game Pass to 40 new countries, nearly doubling the number of markets where it’s available. Great content remains the flywheel behind our growth.
"We have now surpassed 500 million lifetime unique users across our first-party titles, and have never been more excited about our pipeline of games, including the fourth quarter launches of Minecraft Legends and Redfall."
Microsoft executive vice president and CFO Amy Hood said the growth in Xbox content & services was driven by better than expected monetization, third-party game sales, and Xbox Game Pass.
For the quarter ending June 30, 2023, Microsoft expects Xbox gaming revenue to grow in the mid to high single digits and Xbox content & services revenue to grow in the low to mid teens driven by third-party and first-party content, as well as growth in Xbox Game Pass.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.