Xbox Series X/S are Fastest Selling Consoles in Brand History

It’s fiscal results time again and today Microsoft shared the results of it’s 2022 fiscal year 4th quarter (April through June 2022). With the focus on gaming, it once again provides insight into the success of the Xbox brand and how it continues to evolve.

You can find Microsoft’s full earnings report here and below we will highlight all of the pertinent results.

  • Overall Gaming revenue declined by 7% YoY.
  • Xbox Content and Services declined by 6% YoY.
    • This is driven by lower engagement hours and monetization in both first and third-party titles. It was offset slightly by growth in Game Pass subscriptions.
  • Xbox hardware declined 11% YoY.

These results were generally expected and met forecasts given the release schedule and time of year. CEO Satya Nadella added some commentary specifically relating to Xbox:

  • MS has sold more Xbox Series X and S consoles life-to-date than any previous generation of Xbox at this point in its cycle.
  • Xbox was the top hardware among next-gen consoles in North America for 3 straight quarters now.
  • 4 million people have streamed Fortnite via Xbox Cloud Gaming. Additionally, 1 million of those were “new to the ecosystem.”

In terms of Xbox’s annual revenue specifically, it’s their second best 4th quarter in brand history (estimating just under $3.5 billion). In terms of the complete fiscal year, it should result in just over $16 billion in revenue given prior results (below) which would be Xbox’s highest in brand history.

In relation to the forecast for quarter 1 of FY 2023, Nadella said the following:

  • Xbox sales are expected to decline in low-to-mid single digits driven by declines in first-party content.
  • Overall console revenue and Game Pass subscriptions are expected to grow.
  • This still doesn’t factor the Activision-Blizzard deal which he still expects to close by June 2023 (calendar year).

Our Take

There’s nothing too surprising in these results. We’ve talked extensively about game delays and lack of major first-party content which is impacting Xbox at the moment. However, it’s clear that their successes with the Series console hardware are continuing to drive upwards and Game Pass continues to be a powerful mechanism for growth. We’ll discuss these details more on this week’s Bitcast!

By Seasoned Gaming

Covering the videogame industry with daily content, unique opinions, and as always, no ads or filler.

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