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.