How’s Xbox Doing? Key Takeaways From Latest Earnings Report

Microsoft no longer announces specific sales numbers for its games and systems, but the company’s latest earnings report does contain some information about how Xbox is doing.

For the quarter ending June 30, Microsoft said Xbox continues to offer “the best value in the gaming industry” with Game Pass, along with the lower-priced Xbox Series S. While no hard sales numbers were divulged, Microsoft said the Xbox Series X|S family of systems have gotten off to a great start.

Microsoft said it has “sold more consoles life-to-date than any previous generation of Xbox and have been the market leader in North America for three quarters in a row among next-gen consoles.”

That line appears to be a reference to the NPD’s monthly US sales reports that confirm that the new Xbox consoles regularly reach the top of the charts for dollars.

Microsoft also disclosed that its recent partnership with Epic Games to make Fortnite available to stream free through a browser has proven popular. More than 4 million people have streamed the game thus far, including more than 1 million who are “new to our ecosystem.”

But just how much money did Xbox make for the quarter? Not as much as last year. Total Xbox revenue declined 7%, while hardware revenue specifically fell by 11% year-over-year. Xbox content and services revenue also dropped, falling by 6%. This decline was attributed to “lower engagement hours” and spending in both first- and third-party games. Xbox Game Pass subscriptions grew (to a number that Microsoft did not disclose) but not enough to offset the other declines.

Looking ahead, Microsoft expects Xbox and its wider gaming segment to continue to decline. While Game Pass subscriptions and console sales could see growth, it won’t be enough to offset declines in first-party content, Microsoft said. Revenue for Xbox content and services will decline in the “low-to-mid-single digits,” Microsoft said.

Microsoft is a massive company and Xbox is just one part of the mix. Total revenue rose by 12% to $51.9 billion, while Microsoft posted a profit of $16.7 billion, which was up 2%.