MS and Gaming Revenue Overview

Gediminas

Boy...
Founder
21 Jun 2022
4,377
5,698
FnRCb7mXkAEy6RT.png

Revenue was $52.7 billion and increased 2%
Operating income was $20.4 billion and decreased 8%
Net income was $16.4 billion GAAP and decreased 12%
Diluted earnings per share was $2.20 GAAP and decreased 11%
Productivity and Business Processes was $17.0 billion and increased 7%
Intelligent Cloud was $21.5 billion and increased 18%
More Personal Computing was $14.2 billion and decreased 19%
 

thicc_girls_are_teh_best

Veteran
Icon Extra
24 Jun 2022
2,954
5,017
How are y'all so FAST with it!? 🤣

Anyway, those are...pretty bad numbers for Xbox. We know part of the revenue drop is because of heavy Series S subsidization, but they were probably hoping for enough Game Pass uptick to make up for that and whatever costs are involved to manage Game Pass operation and content securing. Looks like that obviously did not happen.

The Game Pass growth they're referring to, is PC Game Pass, but the thing there is PC Game Pass had a laughably small user base. Any growth there could only be a good thing. But if they had substantial growth on the Xbox Game Pass side, we'd of heard about it and their content & services revenue losses would have probably been less. That's happened in prior quarters IIRC.

Just gonna say, there will probably be more Xbox-related job cuts coming in the next few months. They aren't done there. I might not even be surprised if there are some cuts to the Surface side since it seems that division had a sharp drop in hardware sales (or at least revenue), and IIRC they tend to do pretty well. But I suppose theirs could be explained by softening post-COVID demand and more people going back to the office vs. working from home.

Very clear that Azure & Office are doing the heavy lifting when it comes to growth at Microsoft, with Windows somewhere in that mix but less so. No wonder they are focusing on growth in AI. I think the 2023 Xbox release slate will be the test to see if MS continues the brand on the traditional business model or shifts to something of a different model altogether. Particularly if they can't count on acquiring ABK (though even if they get ABK they might be considering this depending on how Game Pass growth revenue and sales of games like Starfield, RedFall etc. play out this year).

--------

...also kind of an aside but given the hardware decline in Xbox side and no PR on Series sales numbers, it's virtually 100% clear that they are tracking behind XBO now launch-aligned. So they're at less than 18 million sold-through WW. I'd personally estimate between 16.5 million - 17.5 million sold-through WW realistically.
 

Dick Jones

Corporate Dick
Icon Extra
5 Jul 2022
771
1,433
Console hardware revenue dropping 13% is worrying. Time for the price increase, so if you didn't buy it at Christmas with the impressive price drop, and yet somehow on the fence, buy the thing now. Hopefully they stop picking on India.

Software makes sense when you have first party issues, but Gamepass still increased their subscribers in the period.
 

Dick Jones

Corporate Dick
Icon Extra
5 Jul 2022
771
1,433
How are y'all so FAST with it!? 🤣

Anyway, those are...pretty bad numbers for Xbox. We know part of the revenue drop is because of heavy Series S subsidization, but they were probably hoping for enough Game Pass uptick to make up for that and whatever costs are involved to manage Game Pass operation and content securing. Looks like that obviously did not happen.

The Game Pass growth they're referring to, is PC Game Pass, but the thing there is PC Game Pass had a laughably small user base. Any growth there could only be a good thing. But if they had substantial growth on the Xbox Game Pass side, we'd of heard about it and their content & services revenue losses would have probably been less. That's happened in prior quarters IIRC.

Just gonna say, there will probably be more Xbox-related job cuts coming in the next few months. They aren't done there. I might not even be surprised if there are some cuts to the Surface side since it seems that division had a sharp drop in hardware sales (or at least revenue), and IIRC they tend to do pretty well. But I suppose theirs could be explained by softening post-COVID demand and more people going back to the office vs. working from home.

Very clear that Azure & Office are doing the heavy lifting when it comes to growth at Microsoft, with Windows somewhere in that mix but less so. No wonder they are focusing on growth in AI. I think the 2023 Xbox release slate will be the test to see if MS continues the brand on the traditional business model or shifts to something of a different model altogether. Particularly if they can't count on acquiring ABK (though even if they get ABK they might be considering this depending on how Game Pass growth revenue and sales of games like Starfield, RedFall etc. play out this year).

--------

...also kind of an aside but given the hardware decline in Xbox side and no PR on Series sales numbers, it's virtually 100% clear that they are tracking behind XBO now launch-aligned. So they're at less than 18 million sold-through WW. I'd personally estimate between 16.5 million - 17.5 million sold-through WW realistically.
Hardware sales revenue is full price. Discounts allowed goes in expenses.
So the number of consoles sold raised less revenue before the additional subsidies are included.
 

AshHunter216

Veteran
8 Jan 2023
4,522
7,588
Will be interesting to see how Playstation's numbers compare. May be better since they had more software and their stock situation was slightly better last year than prior.

I wonder if it's possible that MS uses these figures with regulators to argue that they wouldn't be competitive without major purchases like ABK.
 

KiryuRealty

Cambridge Dictionary High Priest of Grammar
28 Nov 2022
6,647
8,160
Where it’s at.
Yeeesh, I guess we see why Microsoft was basically having fire sales with the Series S.
Talk is that that was the retailers demanding MS something about all the stock they stuffed into the channel when people wanted Series X, not S.

This is probably the worst a console generation has done in North America for a formerly major player since the Saturn, which was discontinued before it hit three holiday seasons.

Let that thought sink in, folks.
 

KiryuRealty

Cambridge Dictionary High Priest of Grammar
28 Nov 2022
6,647
8,160
Where it’s at.
Will be interesting to see how Playstation's numbers compare. May be better since they had more software and their stock situation was slightly better last year than prior.

I wonder if it's possible that MS uses these figures with regulators to argue that they wouldn't be competitive without major purchases like ABK.
May be better?

May?


What are you smoking? Whatever it is, lay off it.

Sony killed November and had their biggest month of hardware sales in North America in PlayStation history in December. They didn't shrink by nearly a quarter of sales year over year like MS did.

Xbox has shit the bed in epic fashion.

Shareholders have been wanting that money sink of a division killed for most of the last 20 years, and this gives them ammunition to do that and torpedo the Activision buyout before the FTC even gets to give opening statements in court.
 

thicc_girls_are_teh_best

Veteran
Icon Extra
24 Jun 2022
2,954
5,017
Will be interesting to see how Playstation's numbers compare. May be better since they had more software and their stock situation was slightly better last year than prior.

I wonder if it's possible that MS uses these figures with regulators to argue that they wouldn't be competitive without major purchases like ABK.

Well we already know they did at least 5 million for PS in November & December combined, because they reached 25 million sold-through by end of October last year.

They did say "over 30 million" though, so it could be as little as 10K over 30 million a couple million on top of the 30 mil. Safe to say they are probably closer to 30 million than say 35 million at least at the time Jim Ryan made the announcement at CES.

I don't see how MS using these results helps their ABK acquisition, because it's easy to arrive at WHY they're seeing these results. Lack of mass-market appealing exclusives (1P and 3P), potentially ineffective marketing & messaging, bleeding money on hardware pricing, inefficient supply of certain SKUs to key markets, etc. And then for those, you could dig even deeper and the answer generally falls back onto lack of proper management at Microsoft (or at least the Xbox division).

Which would then just as the question, if the upper management's the issue and it isn't changing, wouldn't ABK risk deteriorating if needing to operate under that management in any capacity?

Talk is that that was the retailers demanding MS something about all the stock they stuffed into the channel when people wanted Series X, not S.

This is probably the worst a console generation has done in North America for a formerly major player since the Saturn, which was discontinued before it hit three holiday seasons.

Let that thought sink in, folks.

I was thinking about that to some degree. When Sega did their "Big Three" in holiday 1995 they saw a big increase in Saturn NA sales but, Sony saw an even bigger increase in PS1 holiday sales at the exact same time, something like at least 2x Saturn's. And we already have the November leaks where that basically played out again between PS5 and Xbox Series S/X.

Also similar to Saturn, Xbox Series S/X are losing market share in America, both just in terms of direct competition and in relation to their previous console at similar point in console lifecycle. If there are any bright spots for Microsoft compared to Sega here, it's that they have enough money to turn things around and have some big sectors of the company that are seeing growth and bringing in big money (Azure & Office specifically).

And they may finally start getting some big mass-market appealing exclusive content coming out at least semi-regularly though, seems that's going to be a rough challenge even for this year if the RedFall release date rumors are true (because I can't picture Starfield releasing before RedFall, and Forza is just Forza, not really going to move the needle even if they're generally great racing games).
 
Last edited:

Elder Legend

CEO of Gaming Instincts (Industry Veteran)
10 Jan 2023
607
465
Lack of 1st and 3rd Party exclusive releases
343 being a dumpster fire
Constant delays big releases

I am not surprised.

Hopefully they can pick up their shit and fix the issues and start releasing games asap.
 

AshHunter216

Veteran
8 Jan 2023
4,522
7,588
Well we already know they did at least 5 million for PS in November & December combined, because they reached 25 million sold-through by end of October last year.

They did say "over 30 million" though, so it could be as little as 10K over 30 million a couple million on top of the 30 mil. Safe to say they are probably closer to 30 million than say 35 million at least at the time Jim Ryan made the announcement at CES.

I don't see how MS using these results helps their ABK acquisition, because it's easy to arrive at WHY they're seeing these results. Lack of mass-market appealing exclusives (1P and 3P), potentially ineffective marketing & messaging, bleeding money on hardware pricing, inefficient supply of certain SKUs to key markets, etc. And then for those, you could dig even deeper and the answer generally falls back onto lack of proper management at Microsoft (or at least the Xbox division).

Which would then just as the question, if the upper management's the issue and it isn't changing, wouldn't ABK risk deteriorating if needing to operate under that management in any capacity?
I do wonder, if their management is the issue, what does increasing the amount of studios they have to oversee solve? If a manager is doing a bad job, you don't give them even more responsibility.
 

Gods&Monsters

Veteran
Icon Extra
21 Jun 2022
4,057
8,238
.also kind of an aside but given the hardware decline in Xbox side and no PR on Series sales numbers, it's virtually 100% clear that they are tracking behind XBO now launch-aligned. So they're at less than 18 million sold-through WW. I'd personally estimate between 16.5 million - 17.5 million sold-through WW realistically.
I bet Game Pass is still at about 25 millions even after adding Cloud and PC.
 

Hezekiah

Veteran
23 Jul 2022
1,131
1,196
Talk is that that was the retailers demanding MS something about all the stock they stuffed into the channel when people wanted Series X, not S.

This is probably the worst a console generation has done in North America for a formerly major player since the Saturn, which was discontinued before it hit three holiday seasons.

Let that thought sink in, folks.
Damn it's so weird.

Series S hasn't sold what they would have expected, and has been widely available since launch and heavily discounted for much of that time.

But without it MS would be way behind Playstation in terms of volume of sales.

Basically are they doing any better than last gen given that they have a ~$250 console available?