there's no way to spin this. these are really, really bad numbers.
Xbox is irrelevant in the marketplace.
The positive spin I can see is that cloud computing was up 18%. If Spencer can spin that as a direct result of Xcloud and Gamepass subs, he may save his arse and Nadella's.
Some background but a little OT:
Microsoft as a company are moving to cloud services, they've hinted towards this in the past. The real money for them is Azure server farm rent, which is why they moved to a subscription service model with Office and why they're positioning themselves to attempt it with Windows.
Xbox one becoming a streaming only console is part of the plan. However, the plan has taken a knock because the Series X hasn't produced the game to convince people to upgrade OR cloud stream on the Xbone family. The Series S (S for streaming) was also going to be a hybrid local/streaming console. A cost effective console for casuals, with the ability to stream high-end games. Series X was going to be 100% local gaming for your enthusiast.
3 years ago, MS was meant to launch a 'Firestick' like device for Streaming games AND media by doing deals with Disney and Netflix (Netflix are offering games on their platform today) backed up by Microsoft's first party Tv shows like Halo. Obviously that has gone to pot because Halo has been a catastrophic failure.
Here we are today with no firestick, a streaming service not fully in place, still no clear marketing strategy of the One and Series families, IP's delayed or in ruins and a console that is having problems behind the scenes. People will tell you otherwise and they will attack me for saying this and downplay it, but the Series X is not working as intended. It is borked at the lowest levels and MS can't fix it. It's a big secret that no-one dare talk about.
So where does that leave us? It leaves us with Microsoft crowing about 120 million users because that means 120 million users logging into Azure servers. That's why that number is been shouted from the rooftops more than anything else. Satya and Spencer can bamboozle the board with that number and repeat it often enough that it seems like a huge triumph for Microsofts long term goals. Buying ABK is really the key to the plan now. More people connecting via COD, OW2 and Diablo (all forced online games) and King for the huge influx of Mobile Gaming Users, the numbers of which can be used to pad out 'Gamepass' numbers and avert a disaster for Xbox, Spencer and Satya.
TL;DR 120 million users is the figure being touted as a success because it means 120 millions 'xbox users' are logging onto Azure servers. That means the Xbox division is still hitting their KPI's of bringing in millions of people onto the Azure servers which is the long term strategy of Microsoft.
