Microsoft FY 2023 Q2: Gaming revenue -13%, Xbox content & services -12%, Xbox hardware -13%

[St. Elmo's Fire]

View: https://twitter.com/DomsPlaying/status/1617991925080133633

View: https://twitter.com/DomsPlaying/status/1617994493978112002

View: https://twitter.com/BenjiSales/status/1617993607017017344

The most alarming thing is the drop in hardware. The software issue is no surprise because of Microsoft's weak 2022 output. But hardware dropping 13% so early in a gen is bad.

 

[Jencks]

Pretty rough numbers. They need big exclusives out yesterday.

Hardware drop this early in a gen is just weird

 

[Diarrhea Day-Lewis]

20 billion and they're laying off 10,000 while acquiring 9,500 staff? Wow

 

[Razgriz417]

13% hardware decline this early in the gen? damn

 

[Toumari]

Surely you would expect hardware to be up considering availability has improved? I guess lack of exclusive content is harming demand.

 

[Macija]

The drop on revenue is expected, but they hardware sales shouldn have dropped so soon in the generation.

Maybe the revenue is lower because of the Holyday deals.

 

[GamingCJ]

Hardware drop despite MS overshipping Series S (stores still sell the discounted Series S holiday bundles) is worrying.

 

[Deleted member 68874]

20 billion operating income in a quarter is absurd, especially with those recent layoffs happening.

Gaming revenue drops were expected.

 

[LightKiosk]

They detailed GamePass growth to offset some of the losses but didn't detail the growth with percentage. $20B profit in a quarter for the overall company though is crazy yet they laid off 10K people.


View: https://twitter.com/BenjiSales/status/1617994618544754688

 

[The_Iceman2288]

Can't believe Pentiment and As Dusk Falls weren't system sellers.

 

[Yerffej]

Knew these number would be bad with those layoffs. I'm curious about Sony's numbers too. I don't think they'll be hitting their sales projections.

 

[Cali32]

$20B profit for the quarter yet they're laying off 10k staff...

 

[Deleted member 68874]

Can't believe Pentiment and As Dusk Falls weren't system sellers.

Click to shrink...

Yeah, it's hard selling a console when you don't have big exclusives in a full year.

 

[Dyle]

Xbox numbers are not as bad as I would have expected given everything, or rather the lack thereof.

 

[pioneer]

Not so surprising after the NPD leak. Regardless, I think the Series consoles are great, Game Pass is even better and hopefully their software line up turns out good over the next few years.

 

[Thiago]

Rough numbers all around. Considering all the discounts they had for Series S for the whole end of year period, they clearly have a demand issue for their console.

 

[robinium7]

Satya Nadella is not going to be one bit happy with the Xbox performance after how much capital backing Phil Spencer has been given.

I wouldn't be surprised if they're regretting the Acti Blizz offer.

 

[CaptNink]

Todd and Starfield need to save the day.

 

[RedHeat]

Obviously the lack of system-sellers could be an issue, but are they still feeling the effects of post-covid spending?

 

[Patitoloco]

They really need to bring the big guns, like now IMO

Starfield will do great, but they need more.

 

[Nolbertos]

Didn't expect hardware to fall off drastically this early in the generation. I know its not as bad as Xbox One numbers but still to me, this should ringing alarm bells for MS, while heading into a recession too. The Gamepass numbers also seems to be slightly growing, but don't know if Gamepass growth alone can sustain Xbox Division growth long term. I guess once there 1st party games get released this year, we'll see if last year was a blip or hardware sales are going to keep suffering the whole gen again. Maybe not overall doom and gloom, but concerning nonetheless

 

[Derkon]

Not a good look.

 

[OCL]

Hardware being down is problematic

 

[Mcfrank]

Fairly shocked that the market is responding positively to MSFTs overall numbers.

 

[cartoon_soldier]

Hardware is still related to stock levels of Series X.

Content degrowth was in line with their expectations if I recall last quarter's statement.

 

[Kyra]

Game need to be released. Promises were made with gamepass and while the service is great. There is an expectation with exclusives that haven't been met. You gotta.makenpeoole want your system with big titles that get headlines. Simple as that.

 

[cartoon_soldier]

Fairly shocked that the market is responding positively to MSFTs overall numbers.

Click to shrink...

Mostly lines up to what MS had said their expectations are, maybe not Windows OEM revenue down 39% though.

 

[Brando]

Not a good look for Xbox especially after the holiday season.

 

[St. Elmo's Fire]

The most alarming thing is the drop in hardware. The software issue is no surprise because of Microsoft's weak 2022 output.
But hardware dropping 13% so early in a gen is bad.

 

[renoch]

Satya Nadella is not going to be one bit happy with the Xbox performance after how much capital backing Phil Spencer has been given.

I wouldn't be surprised if they're regretting the Acti Blizz offer.

Click to shrink...

Don't think that will be the reaction at all.
They've bought a load of companies but most of the games released by those companies were still contracted to Sony, the system selling exclusives haven't really begun to come out yet.

Microsoft executives will obviously be aware how long games take to make and won't be expecting miracles after 3 years.

 

[Desfrog]

I wonder if they are still ahead of the Xbox one launch aligned.

 

[Shard Shinjuku]

I think it really does say something towards the disorganization Microsoft Gaming leadership is in when they bought all of those studios and seem to have so little in the way of backing content.

 

[cw_sasuke]

Xbox numbers are not looking great especially with them missing their GP forecasts a couple times in a row now as well.

 

[cartoon_soldier]

Gaming revenue decreased $684 million or 13% driven by declines in Xbox content and services and Xbox hardware. Xbox content and services revenue decreased 12% on a strong prior year comparable impacted by first-party game launches, driven by declines in first-party content and a lower rate of monetization in third-party content, offset in part by growth in Xbox Game Pass subscriptions. Xbox hardware revenue decreased 13% driven by lower price and volume of consoles sold.

Click to shrink...

So, both less volume and more Series S (lot of them in the 50$ off deal I presume) sold than Series X compared to last year.

 

[Plasma]

That'll happen if you don't put out any system sellers all year.

 

[robinium7]

Don't think that will be the reaction at all.
They've bought a load of companies but most of the games released by those companies were still contracted to Sony, the system selling exclusives haven't really begin to come out yet.

Microsoft executives will obviously be aware how long games take to make and won't be expecting miracles after 3 years.

Click to shrink...

They have been on this buying spree for several years now yet the output has been very low. I'm sure Satya Nadella did not expect that every studio would take 4, 5 + years *from acquisition date* to output a game. Many should have been part way through projects when they were acquired.

 

[BananasWithGuns]

Yeah, they need to start getting their games out. Last year was really, really rough on that front.

 

[NuclearCake]

Exclusives still matter and will continue to matter. It's honestly shocking to me how far Microsoft has dropped the ball on this and they have been in this rut for ages.

 

[dlauv]

Game need to be released. Promises were made with gamepass and while the service is great. There is an expectation with exclusives that haven't been met. You gotta.makenpeoole want your system with big titles that get headlines. Simple as that.

Click to shrink...

This. Casuals don't buy consoles based on games that aren't gonna be out for years.

 

[elenarie]

Fairly shocked that the market is responding positively to MSFTs overall numbers.

Click to shrink...

Market doesn't really care about minor things like Xbox and Surface and even Windows at this point. Cloud revenue was up 22% and that's the money maker. The hype around AI is also driving the positive outlook of their value.

 

[cartoon_soldier]

They have been on this buying spree for several years now yet the output has been very low. I'm sure Satya Nadella did not expect that every studio would take 4, 5 + years *from acquisition date* to output a game. Many should have been part way through projects when they were acquired.

Click to shrink...

Very good of us to presume what Satya Nadella expects lol

Output includes 2 games that had exclusivity signed with PS which MS honored too.

 

[rashbeep]

expected

 

[Sems4arsenal]

I think Xbox probably needs new leadership. Better management of the 1st party studios.

Wonder if the HW numbers are because of the economical situation?

 

[SilverX]

That'll happen if you don't put out any system sellers all year.

Click to shrink...

Having a $299 next gen system is suppose to be the selling point

 

[Betty]

Having a $299 next gen system is suppose to be the selling point

Click to shrink...

You need things to play on it though.

 

[BlueManifest]

13% hardware decline this early in the gen? damn

Click to shrink...

Not surprising as more people became aware they can just buy their games on PC, it took awhile but things like that eventually catch up, it could possibly happen to Sony too as they release more on pc

 

[immy]

Desperate need for exclusives

 

[TheXbox]

Hardware is still related to stock levels of Series X.

Content degrowth was in line with their expectations if I recall last quarter's statement.

Click to shrink...

Is the stock situation worse than last year? I snagged one without too much fuss over the summer, but not sure if things have changed or if I just got lucky. I know PS5 availability has improved a lot.

 

[dlauv]

I think Xbox probably needs new leadership. Better management of the 1st party studios.

Wonder if the HW numbers are because of the economical situation?

Click to shrink...

They definitely need to change how hands off they are with studios who miss deadlines. And I guess they are. 343 got reamed.

 

[Macija]

Don't think that will be the reaction at all.
They've bought a load of companies but most of the games released by those companies were still contracted to Sony, the system selling exclusives haven't really begun to come out yet.

Microsoft executives will obviously be aware how long games take to make and won't be expecting miracles after 3 years.

Click to shrink...

Xbox has failed to reach the GamePass subscribers target two years in a row. Maybe they dont expect miracles, but they are expecting more for sure.