Microsoft has just published its final report for the first fiscal quarter of the year. Apart from providing insights into the revenue of services like Microsoft 365 and Windows devices, it also highlights the Xbox gaming division’s performance. The report details a nearly 30% drop in hardware sales and a 2% decrease in overall gaming revenue. However, there was also a 1% growth in Xbox content and services, proving that Xbox Game Pass and publishing third-party content as a source of reliable revenue for the company (via GamesIndustry).
Expectations For Xbox’s Last Quarter
A reduction in hardware sales isn’t anything too surprising for Xbox, but a 29% year-over-year drop in console sales does seem worrying. However, Microsoft notes that this reduction is so significant because the previous year was much stronger for them in terms of hardware sales. Overall revenue for Microsoft (including Xbox, Microsoft 365, Windows, and cloud services) is at $77.7 billion for the quarter, which is an 18% increase year-over-year. The Redmond conglomerate expects a growth of 16% to 18% for the next quarter.
It’s not surprising that the first quarter was slow for Xbox. Apart from Grounded 2, there weren’t many noticeable first-party releases during this period. Q2 and Q3 were both much stronger, with games like DOOM: The Dark Ages, Oblivion Remastered, and, for us sports games fans, Tony Hawk’s Pro Skater 3 + 4.
For the final quarter of the Xbox fiscal year, games like The Outer Worlds 2, Call of Duty: Black Ops 7, and Ninja Gaiden 4 should all show strong performance. As we’re inching closer and closer to the next-gen Xbox/PC hybrid, content and services will continue to be the bread and butter for the Xbox brand’s revenue. If they really want to be seen as a reliable publisher, this performance only needs to improve further.
