Xbox hardware revenue fell 30% in Q3 2023.
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Highlights of the story
- According to Microsoft’s new financial report, Xbox saw a 30% decline in hardware revenue in Q3 2023.
- Overall Xbox revenue also fell 4%, but content and services grew 3%.
- Game Pass brought in nearly $1 billion and helped boost Microsoft’s cloud revenue as the company earned $52 billion in Q3, up 7 percent from 2022.
Microsoft released it. Q3 2023 Financial Report And the results didn’t reflect well on the performance of the Xbox series consoles. Hardware revenue It fell 30% in the quarter, with a slightly lower 28% decline in constant currency. Although Content and Services The quarter saw a 4% decline in overall Xbox gaming revenue, up 3%. So, the first three months of 2023 weren’t a big win for Xbox.
Amy Hood, Microsoft’s CFO, provided some insight into these financial results. He said that although gross revenue declined by 4% (versus 1% in currency), it was still “Beyond expectations” So, Xbox beat the company’s forecasts this quarter. Hood also expanded on the decline in hardware revenue, saying it was due to increased console supply:
Xbox hardware revenue fell 30% and 28% in constant currency compared to a strong year that benefited from increased console supply.
Xbox had a big positive result this quarter with growth in content and services. Game Pass was the main driver of the sector’s 3% growth in Q3 2023, with the subscription service bringing in nearly $1 billion in revenue. Considering how Microsoft expanded the service to 40 new countries, this 5% contrast currency is not surprising.
Company CEO Satya Nadella also revealed how Xbox surpassed 500 million unique users this quarter. Therefore, more than half a billion unique people have now played the company’s first-party games. In addition, when it comes to gaming, Xbox also broke its personal record for the most monthly active users in Q3 of any year.
Content and services were the main driving force behind revenue growth in the quarter.”Better-than-expected monetization of third-party and first-party content and growth in Xbox Game Pass;According to Amy Hood. She also explained how Microsoft expects gaming to grow in the fourth quarter and highlighted special topics like Redfall. Hood predicted “mid-to-high single digits” for the gaming sector in Q4 ” Mentioned the addition of
We expect Xbox’s content services revenue to grow among young to middle-aged adults, driven by third-party and first-party content as well as Xbox Game Pass.”
Similar to Xbox hardware sales, Windows hardware and OEMs also saw declines of 30% and 28% respectively. Despite lower demand for hardware, the company’s revenue grew 7% year over year. Revenue from cloud services and other offline products was a major reason behind this growth. Microsoft Cloud revenue totaled $28.5 billion and saw a 22% increase over Q3 2022.
Overall, US tech companies earned $52.9 billion in Q3, up 7% from 2022. So, even if the Xbox Series X and Xbox Series S disappointed, the quarter wasn’t a failure for Microsoft.
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