Microsoft reports ‘second best’ Q4 and full-year for Xbox revenue

UPDATE: Xbox set fourth quarter records for monthly active users and Game Pass engagement

Microsoft has reported relatively strong fourth quarter and full-year (FY23) sales for its Xbox division.

For the fourth quarter ended on June 30, 2023, the company said gaming revenue increased $36 million or 1% compared to the corresponding period of the previous fiscal year.

Quarterly Xbox content and services revenue was up 5% year-over-year, driven by growth in third-party content and Xbox Game Pass, but that was offset by a 13% decline in hardware revenue due to a lower volume of consoles sold.

Update25th Jul 2023 / 10:53 pm

During Microsoft’s earnings call on Tuesday, CEO Satya Nadella claimed Xbox set fourth quarter records for monthly active users and Game Pass engagement.

“We set new fourth quarter highs for monthly active users driven by strength off console as well monthly active devices,” he said. “And we saw record fourth quarter engagement across Game Pass, with hours played up 22% year-over-year.”

The quarterly gaming results fell short of the company’s previous guidance. In April, Microsoft forecasted Xbox revenue growth in the mid to high-single digits and Xbox content and services revenue growth in the low to mid-teens.

Nevertheless, according to independent industry analyst @DomsPlaying, Microsoft’s fourth quarter gaming sales totalled approximately $3.49 billion – the second highest ever for the Xbox division behind Q4 of FY21.

Full-year sales for the division of approximately $15.47 billion were also only bettered during Microsoft’s previous fiscal year.

Notice: To display this embed please allow the use of Functional Cookies in Cookie Preferences.

“Using quarterly sales growth of 1% for Xbox, Microsoft’s gaming division saw $15.465B in revenue during the year ending June 2023,” he wrote.

“It was $16.23B in FY 22. Still, FY23 was its 2nd best fiscal ever.”

Microsoft CEO Satya Nadella and CFO Amy Hood are expected to provide more information on the Xbox division’s performance during an earnings call beginning at 2.30pm PT / 5.30pm ET / 10.30pm GMT on Tuesday.

The company raised the price of some Xbox Game Pass subscriptions earlier this month and will increase the price of the Xbox Series X console in August.