Xbox revenue drops in latest earnings report

Microsoft has revealed that Xbox gaming revenue has fallen year-on-year after a weak quarter with very few releases.

Microsoft has revealed that Xbox gaming revenue has fallen by 13% in its latest financial quarter, owing largely to a lack of software releases.

Microsoft’s latest earnings report covered the company’s second quarter of the financial year, which ended on December 31, 2022. Microsoft said that Xbox gaming revenue had fallen 13% compared to the same quarter last year.

As reported by Windows Central, the revenue drop was biggest in Xbox hardware sales, which declined by 13%, as well as Xbox content and services, which declined by 12%. The decline was reportedly within Microsoft’s expectations, as the company only released one first-party title during the quarter.

The same quarter in the previous financial year had the launch of Age of Empires 4, Halo Infinite, and Forza Horizon 5, all heavy hitters which resulted in a huge boost to Xbox sales. The most recent quarter saw just one release, the critically acclaimed Pentiment, which was a much lower profile launch than previous quarters.

Xbox has a rich library of first-party releases, but the schedule has slowed down lately. Picture: Microsoft

Microsoft also says that the drop in revenue is partially due to “lower price and volume of consoles sold,” which Windows Central speculates is in reference to Black Friday sales, where Xbox consoles were sold at a deep discount.

The drop in revenue isn’t expected to last going forward, however, as the company gears up for a 2023 packed with high profile releases. In the next few months alone, the company will release Minecraft Legends, Forza Motorsport, Redfall, and the highly anticipated Starfield is expected to launch at some point in 2023.

Microsoft held its latest developer presentation this morning, showing off all of these games in much greater depth. The Xbox presentation was headlined by a surprise game release, too, with Hi-Fi Rush getting both announced and released during the show.

It comes as Microsoft recently announced huge lay-offs at the company, with over 10,000 workers let go. Many of those workers came from Microsoft’s gaming division, with developers from studios like 343 Industries and Bethesda facing redundancy.

Microsoft’s Series consoles have been widely popular, with the consoles frequently selling out quickly. Photo: CHARLY TRIBALLEAU/AFP

Patrick Wren, a former Halo developer, slammed Microsoft for the lay-offs, saying that the real reason for the lay-offs was “incompetent leadership up top”.

Written by Oliver Brandt on behalf of GLHF.