Xbox hardware revenues are down 30%

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The latest quarterly earnings report from Microsoft reveals that sales of both Xbox games and hardware fell year on year.

Microsoft has released its financial report for the latest quarter up to 31 March, and it shows signs that the Xbox games division is struggling. Xbox hardware revenue declined 30% in comparison with the same quarter last year, something that the report put down to “increased console supply” in the year prior. It could be an indication that Microsoft is finding it difficult to produce enough Xbox consoles in light of the ongoing semiconductor shortage.

But it could also indicate the Xbox is falling behind in the console race: as reported by, GfK data has revealed that sales of the PS5 in the UK were up 180% year on year in the first quarter of 2023, partly as a result of constrained supply the year before, and the PS5 accounted for half of UK console sales in the first quarter. By comparison, Nintendo Switch sales were down 25% in the first three months of 2023, and sales of the Xbox Series X and S were down 18%.

Microsoft’s quarterly earnings report also revealed that gaming revenue declined 4% year on year, which comes as little surprise considering the paucity of first-party releases in the past few months. However, there was 3% growth in ‘Xbox content and services’ revenue, partly as a result of growth in Xbox Game Pass.

Delays of major games like Starfield have no doubt hit the revenues of Xbox, and Microsoft head Satya Nadella has pointed to a brighter year ahead, saying: “I’ve never been more excited about our pipeline of games, including the fourth quarter launches of Minecraft Legends and Redfall.

Away from its gaming division, the report had more positive news, with Microsoft reporting overall revenue up 7% and net income up 9%. Microsoft’s share price jumped by around 9% after the release of the report.

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