Microsoft Xbox Series X/S sales downturn continued last quarter

[midian182]

What just happened? Microsoft's latest quarterly earnings report was a good one overall for the company, with revenue and net income showing large increases compared with the previous year. It wasn't all welcome news, though, as Xbox Series X and S sales are still crashing.

Microsoft made $61.86 billion in revenue during the first three months of 2024, up 17%, with a net income of $21.9 billion, beating analysts' estimates.

Microsoft's gaming revenue was up 51% year-over-year, but this is nearly all due to the Activision Blizzard acquisition. Activision Blizzard was responsible for the vast majority of the business' $5.45 billion profits – gaming revenue would be down 4% were it not for money from the likes of Call of Duty – while Xbox Series X and S revenue was down 31 percent year-over-year. Microsoft reported a 30% decrease in Xbox hardware revenue last year, and, as was the case back then, it is attributing the latest fall on a lower volume of consoles being sold. Xbox content and services revenue was up 62 percent – 61% came from Activision.

It's estimated that Microsoft has sold around 21-25 million Xbox Series X/S consoles to date, around half the PlayStation 5's estimated 50 million units. Even the Atari 2600 from 1977 sold more units (30 million). It's partly why Microsoft is making former exclusives available to other platforms. CEO Satya Nadella said in the Q3 earnings call that the company published 7 of the top 25 games on PlayStation this month, more than any other publisher.

The Activision Blizzard division recorded $1.97 billion in revenue during Q3, but purchase accounting adjustments, integration, and transaction-related costs, along with other costs of revenue, came to $980 million. Combined with $1.34 billion in operating expenses, Activision Blizzard recorded an operating loss of $350 million.

Microsoft CFO Amy Hood expects Xbox hardware revenues to continue declining again in the next quarter, with overall gaming revenue growth in the low to mid 40 percent region.

Away from gaming, Microsoft's Cloud revenue was up 23% YoY to $35.1 billion. As investors become impatient with the slow returns on the massive AI investments made by some companies, Microsoft noted that 7% of revenue within the Azure cloud computing division was from AI services, up from 3% during the previous quarter.

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Microsoft Xbox Series X/S sales downturn continued last quarter

 

[Theinsanegamer]

Shocking, the console with no exclusives doesnt sell. I'm shocked.

 

[The Talking Tech]

The actual headline should say something like:

"Despite Xbox Hardware Sales Are Down, the Xbox Gaming Division Ranked Up High Record Profits."

It would be nice if we just didn't highlight the negative aspect of the whole report.

 

[m4a4]

The actual headline should say something like:

"Despite Xbox Hardware Sales Are Down, the Xbox Gaming Division Ranked Up High Record Profits."

It would be nice if we just didn't highlight the negative aspect of the whole report.

Yeah, it's almost like MS is focusing on software (and has been for a while now).

But hey, a partial truth sounds better as a title...

 

[The Talking Tech]

Shocking, the console with no exclusives doesnt sell. I'm shocked.

Obviously you omitted the most important aspect of the story:

-Microsoft's gaming revenue was up 51% year-over-year

-Xbox content and services revenue was up 62 percent.

Aside from multiple reports stating Xbox has been selling more Xbox games on PlayStation Store than PlayStation games themselves.

Shocker...right?

 

[Theinsanegamer]

Obviously you omitted the most important aspect of the story:

-Microsoft's gaming revenue was up 51% year-over-year

-Xbox content and services revenue was up 62 percent.

Aside from multiple reports stating Xbox has been selling more Xbox games on PlayStation Store than PlayStation games themselves.

Shocker...right?

it SHOULD read: "xbox steals activision profits in order to prop itself up and make itself look better, also nobody wants our garbage hardware LOL".

 

[user478318]

I grew up on PS but after PS3 it has all been downhill, Xbox is much better proposition last couple of years, I don't understand why it keeps lacking in sales so much, nobody cares about exclusives, everybody I know only plays FC24 on it anyways

 

[Theinsanegamer]

I grew up on PS but after PS3 it has all been downhill, Xbox is much better proposition last couple of years, I don't understand why it keeps lacking in sales so much, nobody cares about exclusives, everybody I know only plays FC24 on it anyways

Clearly, people care about exclusives. Perhaps the way you use your console is not the way others use their consoles?

 

[user478318]

Clearly, people care about exclusives. Perhaps the way you use your console is not the way others use their consoles?

Maybe, but are Sony exclusives not coming to Steam? I think I read some articles on this site where some Sony exec claimed the exclusives are not good for the business?

 

[The Talking Tech]

it SHOULD read: "xbox steals activision profits in order to prop itself up and make itself look better, also nobody wants our garbage hardware LOL".

Can we also say:
PlayStation profits are only thanks to studios they acquired...like Insomniac, Naughty Dog, House Marque, Bungie, and more.

as you know 99% of PlayStation Studios were all acquired as well...shocker, right?

 

[The Talking Tech]

Maybe, but are Sony exclusives not coming to Steam? I think I read some articles on this site where some Sony exec claimed the exclusives are not good for the business?

PlayStation will no longer have any exclusives as they get closer and closer in releasing every PlayStation game on PC even on Day 1...look at Helldivers 2.

 

[Theinsanegamer]

Can we also say:
PlayStation profits are only thanks to studios they acquired...like Insomniac, Naughty Dog, House Marque, Bungie, and more.

as you know 99% of PlayStation Studios were all acquired as well...shocker, right?

Way to totally miss the point. LMAO. Activision was JUST acquired. The profits being made now are on the backs of activision led projects, not MS led ones.

but you already knew that. Phil Spencer wont be sending you extra $0.50 checks for the extra meatshielding.

Maybe, but are Sony exclusives not coming to Steam? I think I read some articles on this site where some Sony exec claimed the exclusives are not good for the business?

They do, after several years of exclusivity to the console.

The result? PS5 outselling Xbox 5 to 1. Seem sot be working well for them.

 

[Burty117]

Yeah, it's almost like MS is focusing on software (and has been for a while now).

But hey, a partial truth sounds better as a title...

Sorry, what software is that exactly?

 

[m4a4]

Sorry, what software is that exactly?

The context is "Xbox". You tell me.

 

[amghwk]

I find my XB|SX extremely good. It's VERY quiet, and quite powerful. It's smooth and fast.

And to think that it supports the majority of older gen games through backwards compatibility, it's an absolute value machine.

I find older games are more authentic and more fun than current gen cross-platform me-too sequels or remakes and copycats of multitude of games gone by.

To think that I can play Morrowind and Oblivion in XB|SX is very exciting, to say the least.

P.S. I never had a Xbox console before, and all this time, I had PS1, PS2, PS3 Slim and PS4 Pro. When I took the leap to XB|SX after that, I don't regret my move. In fact, I'm having more fun, and sometimes, I just fire up my Series X than turning on my desktop computer which is attached to my same big screen TV.

 

[user478318]

I find my XB|SX extremely good. It's VERY quiet, and quite powerful. It's smooth and fast.

And to think that it supports the majority of older gen games through backwards compatibility, it's an absolute value machine.

I find older games are more authentic and more fun than current gen cross-platform me-too sequels or remakes and copycats of multitude of games gone by.

To think that I can play Morrowind and Oblivion in XB|SX is very exciting, to say the least.

P.S. I never had a Xbox console before, and all this time, I had PS1, PS2, PS3 Slim and PS4 Pro. When I took the leap to XB|SX after that, I don't regret my move. In fact, I'm having more fun, and sometimes, I just fire up my Series X than turning on my desktop computer which is attached to my same big screen TV.

Finally the voice of reason, PS5 is sooooo bad on many levels, and the worst console Sony has ever made, that was pumped during the pandemic for being sold out, when actually nobody cared about that damn console where you need a subscription for backing up your game saves

 

[Burty117]

The context is "Xbox". You tell me.

I'll ask again, what software?

No good games, no new anything, if they're concentrating on "software". What have they created, or at least, what have they created that's any good in the last 6 years? 10 years? It's been a while since they've done anything hasn't it?

If you look at Original Xbox, they invented Halo, Xbox 360 had the blade UI first, then they updated it over time and got rid of it, they had Mass Effect, Gears of War etc...

Since the Xbox One though, if they've been concentrating on "software" they have VERY little to show for it...

 

[m4a4]

I'll ask again, what software?

No good games, no new anything, if they're concentrating on "software". What have they created, or at least, what have they created that's any good in the last 6 years? 10 years? It's been a while since they've done anything hasn't it?

If you look at Original Xbox, they invented Halo, Xbox 360 had the blade UI first, then they updated it over time and got rid of it, they had Mass Effect, Gears of War etc...

Since the Xbox One though, if they've been concentrating on "software" they have VERY little to show for it...

Then you're either not paying attention, or you just want to be disingenuous about it. The fact that you couldn't even acknowledge GP or the recent PS5 launches tells me that I was right to not take your "question" seriously.

 

[Nelson28]

That's a bummer for Xbox fans. Microsoft seems to be doing great overall, but Xbox sales are way behind Playstation. Even with the Activision Blizzard buy, Xbox hardware sales aren't getting a boost. Maybe making more Xbox games playable on Playstation and other platforms could turn things around.

 

[Burty117]

Then you're either not paying attention, or you just want to be disingenuous about it. The fact that you couldn't even acknowledge GP or the recent PS5 launches tells me that I was right to not take your "question" seriously.

I think you'll find you and me have completely different views on "software" focusing.

If someone says to me "they're focusing on the software", to me that's creating new games, updating operating systems, making API's more efficient, Backwards compatibility, Faster loading, better compression etc...

For yourself, you see it from a sales perspective, "they're focusing on the software" you see as selling existing games on other platforms.

 

[m4a4]

I think you'll find you and me have completely different views on "software" focusing.

Yeah, and you are disingenuously wrong. But I guess you just want to throw a lot of words in your replies to help hide that. Got it. Convo over.