Microsoft: Xbox Sales Plummet, but Gaming Business Grows

Microsoft's shift in gaming business strategy has moved away from consoles. Now, these are not the centerpiece of their plans and are gradually being sidelined, at least in this generation, while other sectors begin to register the numbers that matter to the North American company. Yes, its gaming business is growing, while its console sales are plummeting.

Microsoft's gaming business grows, including services and content

Moments ago, Microsoft presented its financial report for the third quarter of fiscal year 2023, and there are 2 sides to a coin. On one hand, the gaming business saw a revenue increase of 51% compared to the same period in the previous fiscal year. It's worth noting that this count includes revenue from Activision Blizzard King, demonstrating that the acquisition was apt as it significantly boosts the overall business.

Microsoft's Q3 2024 (fiscal) earnings:

• 💻 Windows OEM revenue up 11%
• 🖥️ Devices revenue down 17%
• 👾 Gaming revenue up 51%
• 🕹️ Xbox content + services rev up 62%
• 🎮 Xbox hardware down 31%

full details to come here 👇https://t.co/oWidu2907w

— Tom Warren (@tomwarren) April 25, 2024

On the other hand, the services and content sector where Xbox Game Pass is included saw a growth of 62%, indicating that the ecosystem of gaming and the subscription service strategy have yielded results in the reported period.

Xbox Series X|S sales continue to decline

However, the downside comes from Xbox Series X|S sales, which experienced a 31% decline, something expected by Microsoft, which in recent reports acknowledged that it does not expect its hardware sales to rise, and that part of the Xbox business will continue to decline.

The Microsoft gaming business has relinquished its third place, now belonging to Windows, and at the moment, it is the fourth most profitable sector of the company with revenues of $5.451 billion in the reported quarter. Thus, it confirms that Microsoft's plans and its inclination towards diversification of the gaming business and the Xbox brand are yielding mostly positive results, except in consoles, which tend to become a sidelined sector.