Xbox hardware revenue down 42%, content & service is up due to Activision

https://www.thegamer.com/xboxs-hardware-console-revenue-down-42-percent/

It's no secret that Xbox has been struggling this generation, constantly playing catch up to the likes of PlayStation and Nintendo when it comes to hardware sales. It's forced the company to adopt a different approach to releasing games, as Xbox has been more willing to put its big exclusives - like Hi-Fi Rush, Sea of Thieves, and Grounded - onto rival platforms, with very positive results in some cases.

More than its biggest rivals, Xbox has been leaning into the "play anywhere" mantra, going so far as to market bundles with Amazon that don't require a console at all. It shouldn't be too surprising then to learn that Microsoft's hardware revenue has taken a massive beating this financial quarter, dropping by a staggering 42 percent (thanks The Verge).

There obviously isn't just one reason for this drastic decrease, but marketing could be a major factor. Xbox recently admitted that it doesn't put as much effort into marketing in territories like Europe than it does within the United States, mostly down to PlayStation and Nintendo's dominance in the region and willingness to spend more. There's also a lot of uncertainty surrounding Xbox at the moment, as higher-ups constantly have to assure fans its studios won't be shut down and its consoles won't be scrapped.

Activision Blizzard Is Bailing Out Xbox

The good news for Xbox is that content and service revenue is up by 61 percent this quarter, helped primarily by Activision Blizzard. This figure also includes Game Pass numbers, which appear to be currently unaffected by the price increase announcements from earlier this month. Those changes go into effect in September though, so we'll also almost definitely see a drop once the price increase hits.

Gaming revenue in general is also up by 44 percent, though this number has once again been bolstered significantly by Activision Blizzard. In fact, it's the sole reason as to why Microsoft's gaming revenue is in the green, as it would actually be down by 4 percent had Microsoft not acquired the publisher. It's safe to say that Activision Blizzard has bailed Xbox and Microsoft out of hot water this time around, though the Activision Blizzard boost won't last forever.

Damn.. doesn’t look MS will be selling consoles for much longer. Thoughts, SW? Is the future of Xbox to be a 3rd party software developer at this point?

The way Phil just gave up... one of the most defeatist gaming CEO's in my lifetime.

That's what you get for making deals with the devil

Maybe MS should by Blizzard/Activision.

Xbox killin it where it matters and hint, it's not X/S sales. ;o

Verne, Verne, when will they learn. lol :P

Check out these companies that bailed out PlayStation after PlayStation acquired them:

Firewalk Studios

Neon Koi

Bungie

Haven Studios

Valkyrie Entertainment

Bluepoint Games

Firesprite

Nixxes Software

Insomniac

Gaikai

Housemarque

Bend Studio

Naughty Dog

Incognito

Guerilla Games

Zipper Interactive

Media Molecule

Sucker Punch

Looks like Xbox is passing Playstation in revenue and profit.

Yeah, hearing rumors about Google or Amazon replacing Phony so yeah, they're in deep dodo. lol :P

So when MS stops making consoles are Lems going to get kicked out of system wars? I mean I feel like you have to have a physical system to be apart of this forum.........

Or are they going to pretend a service is a system? I mean that's a weird way to try to stay in the game after they lost.

Lost ... what exactly? They are still getting games

More than what Sony is bringing to their "plastic box owning" fans at least.

Doesn't seem like the traditional console sale is microsoft's big focus. My guess is they're looking to expand Xbox as a platform to as many devices as possible and scale back the hardware business, possibly even let third party companies make an Xbox.... Just guessing.

The money has always been in software and hardware has always been about install base. Because the consoles make very little if any profit for the manufacturer. It seems as though Microsoft is prepping to take Xbox elsewhere and that's great! More choice, less hardware walls is a great thing.

Those software numbers out of Activision Blizzard are ridiculous. If only Microsoft could somehow access that revenue... 🤔

Xbox makes investment, xbox sees material return on investment, that's all that amounts to. Much like Sony will have its' figures boosted if/when bungie drop their next big multiplat title. I promise you right now the calculations are being done by certain institutional investors in Sony Nintendo and MS who will be asking questions as to why titles remain exclusive beyond a certain timespan, they will all be pushing for all titles to have the widest reach possible to maximise ROI. The proof will be the next hardware gen and if MS's theory plays out in that the audiences have essentially ossified into separate spheres and it doesn't matter what you offer at this point as long you offer 3-5 core IP's that are availbe everywhere then the people already invested in your platform will stay invested, at that point it will almost be impossible to defend exclusivity as a practice.

Xbox getting out of the console biz since 2001. ;o

The next Xbox console reportedly will be launching 2026-2027 so let's cross that bridge when we come to it if ever.

Poo cows been living on hope and prayers for decades now.

We'll talk about it again 20 years from now mmmmk? lol :P

Not sure anyone really cares. Xbox gaming isn't exciting many people on the console front, but they've got a bazillion franchises and games in the chute to have people excited.

I'd say if you're playing by the old system wars metrics of consoles sold, Xbox would be in big trouble having most certainly lost this gen already.... Based on 2024 metrics and what we've seen for the past several years, Microsoft has no intention of keeping games sacred and exclusive and they don't really see the dedicated console as the future of game distribution. Whether the market moves to something else (streaming, service sharing etc) as the prominent way to game remains to be seen. Microsoft has deep pockets but questionable strategies.

Nice deflection!

I read that despite Activision providing a big bump to revenue, that revenue came in with a $500+ million loss. I don’t see that getting better with COD joining Gamepass.

Since Microsoft owns ABK, gaming revenue is up 44% with Xbox content/services up 61%.. those are huge numbers and that's exactly why ABK was acquired..

as far as hardware, "Xbox, Sony, and Nintendo all saw "double-digit percentage declines" in May of 2024, and the Switch saw the most significant drop"..

so i guess, according to cows, Nintendo is also in trouble and is probably leaving the hardware business.. 🙄

Nice Facts! :P

I wouldn't be surprised if Lems ended up like the Hedgehogs (no better name for SEGA fans), practically non-existent besides some occasions (the amount of times they'll go after Mario 64 for "aging worse" than Sonic Adventure on places like Twitter).

I think it's going to be more annoying than that, they will hang on forever claiming their rokus and web browsers access to GamePass is "Winning" the system wars. Kinda sad really, some people just can't accept losing. It's weird.

This is great news for console warriors lmao. Xbox losing ground on consoles even further means they have to port to others to continue expanding.

Now lems can pretend they are part of the of the PC loser race, PS and Nintendo fans gets Xbox releases. Win win for everyone I say.

"Gaming revenue in general is also up by 44 percent, though this number has once again been bolstered significantly by Activision Blizzard. In fact, it's the sole reason as to why Microsoft's gaming revenue is in the green, as it would actually be down by 4 percent had Microsoft not acquired the publisher. "

😳

While 343i is ruining Halo, Phil is destroying everything else. This is the state of the Xbox.

@SolidGame_basic: Dumb article. The Xbox ecosystem is not reliant on a console like PlayStation is.

You can turn your phone into an Xbox

You can turn your PC into an Xbox

You can turn your smart TV into an Xbox

You can turn your Firestick into an Xbox

Or, you can buy an Xbox Series X/S if you want.

What matters to MS is “how much revenue is a division making”, and the “Xbox division” is doing OK.

But I present FACTS!

And the hits keep coming.

lolol :P

Xbox Mobile Store could be live at any minute – here are the details

Story by Sophie Atkinson

• 1h • 2 min read

The long-awaited Xbox Mobile Store could be up and running at any moment, with a new website launched to share the news.

While fans have been expecting a mobile store for some time now, July has been the rumored month for this to come to fruition.

The Xbox president Sarah Bond even announced that it would be launching at some point in July 2024 back in May.

At the start of the final week of the month, on Monday (July 29), an X user named ‘Klobrille' spotted the new website and posted the link writing: "The Xbox Mobile Store is saying ‘Coming Soon.' Looks like it could be coming to Xbox Insiders first."'

@SecretPolice said:

And the hits keep coming.

lolol :P

Xbox Mobile Store could be live at any minute – here are the details

Story by Sophie Atkinson

• 1h • 2 min read

The long-awaited Xbox Mobile Store could be up and running at any moment, with a new website launched to share the news.

While fans have been expecting a mobile store for some time now, July has been the rumored month for this to come to fruition.

The Xbox president Sarah Bond even announced that it would be launching at some point in July 2024 back in May.

At the start of the final week of the month, on Monday (July 29), an X user named ‘Klobrille' spotted the new website and posted the link writing: "The Xbox Mobile Store is saying ‘Coming Soon.' Looks like it could be coming to Xbox Insiders first."'

Good lord. Xbox just keeps demolishing PlayStation at every turn.

Xbox had a good run:

@kvallyx:

And just think. In just a couple more years Xbox promises a new console launch that not only exceeds but blows away any next gen console like never before. Bu, but, Xbox is done for and going full PC. ;o

The bovine brigade is shook to the core. lol :P

---

Xbox Next-Gen Console Confirmed, Will be 'Largest Technical Leap in a Hardware Generation'

Additional hardware news is also coming this fall.

Xbox is not exiting the hardware market anytime soon, as the company announced that it has a multi-year roadmap that includes a next-generation Xbox in the future.

During the latest episode of the Official Xbox Podcast focusing on the future business of Microsoft's gaming arm, Xbox President Sarah Bond addressed the role hardware plays in Xbox's future. Bond concurred with an earlier statement by Xbox head Phil Spencer that Xbox hardware would remain the flagship experience for players despite the company's plans to go multi-platform moving forward.

Bond teased Xbox has "some exciting stuff coming out in hardware" that the company plans to share this holiday. More interestingly, Bond teased a roadmap focused on next-generation hardware.

"And what we're focused on there is delivering the largest technical leap you will have ever seen in a hardware generation, which makes it better for players and better for creators and the visions they're building," Bond explained in the recent episode of the Official Xbox Podcast.

Best post

According to that audio, it sounds like Xbox is focused on Xbox consoles/Microsoft Windows PC/Xbox Cloud/Mobile. Seems like Xbox finally found their ground, and now with 500 million active users, how can you touch that?

I feel bad that they never mentioned supporting PS. The cows will have a meltdown.

The truth of the matter is...where are the games? Seriously for both Sony/MS, where are your games? Remember we used to have fun during the 7th gen Sony/MS? Yeah, those were the good times.

But hey, I ain't mad. PC/Nintendo Switch is the gift that keeps on giving out games😉👌

It doesn't help when ms marketing says you don't need an Xbox to play our games.

That's nice but they're also saying stuff like this:

CFO Amy Hood points towards Xbox moving towards what "looks more like, to us, a software annuity and subscription business with enhanced transactions and the ownership of IP."

Also, I wonder where all those active users came from since Xbox has been declining by double digits in the last few quarters...

2027 is approaching fast. Sell your Xboxes by 2025, or you will have a lot of trouble selling em.

@kvallyx: Sorry but I cannot support mobile gaming which is what MS is doing. I respect traditional gaming.

Since I stopped playing online games (COD and BF are trash now) this freed up so much time, and I can finally play a genre I never had time for before:

Role playing games.

I finished and loved all the Mass Effect games, and now I'm local cooping Baldurs Gate 3 with my brother, so much fun.

Though it's a shame that game development has slowed down, and that we get soooo many remakes and remasters, I still think we are living in blessed times. Way more games than we got the time to play :)

Good. **** Xbox

Numbers are pretty bad overall and the only numbers that look somewhat decent are because of the ABK acquisition. Next year they're not going to have that free ticket.

@R4gn4r0k: I'm totally fine with the slow down of game developments as I've been enjoying going back to replaying old games and still played new games on PC. This gen isn't anything to brag about, but I've enjoyed the number of games this current-gen has to offer.

Sadly for console gamers, they'll just have to accept whatever comes their way.

Hopefully Xbox will continue to be a strong player in the console space

console hardware alone =/= Xbox.. Xbox's 500 million monthly-active-users are across console, PC, cloud, and mobile..

this same simple logic also applies to PlayStation.. their 123 million monthly-active-users aren't from PS consoles alone..

none of this information is new.. the real question is why is this so difficult for you to understand?.

EDIT.. PlayStation MAU is actually down to 118 million at last count..

I'm sure Microsoft will continue making gaming hardware; but they might not be Xbox-branded.

@davillain: yeah we also have mods on PC. Just a ton of community content out there to play. The other day we got Fallout London, would love to try that.

This gen can be described as 'more of the same'. Which again, we need more new IP, but it's not too bad. It's fine, I guess :)

Xbox consoles, Xbox Cloud, iOS/Android, Samsung TVs, Firestick, Microsoft Windows PC, where all Xbox Game Studio's games live.

The worst part, PlayStation has no games, banned boy.

Mobile sucks. But Sony and MS are now in full on mobile commitment for gaming. The future is here. Just not a future I will be a part of.

Whatever the brand, I hope it works the same as a console.

So we will ignore that MS owns Activision and counts Activision games on PS4 and PS5? They've also been releasing Xbox titles on PS5 with Sea of Thieves being one of their most popular launches. Nah it can't be any of that.

Microsoft has already made "Xbox" into a household name and that gaming brand has just hit 500 million active users..

why on Earth would they release a new console and not utilize the Xbox brand?..

honest question..

That might be a good platform for warm_gun, he can remove what he doesn't like from the games he plays

Not sure but MS loves to rebrand things on a whim

This is only from one group of products over 4 years. Sometimes it can be tough to follow their products. (Imagine trying to look up solutions for some software issue but you can't find the answer because you didn't look it up under the right name)

Anyway I agree there would seem to be no good reason to do this

I am sure some of those numbers are there too.

I have no doubt that Sony is counting Destiny 1 and Destiny 2 (and all DLC) on Microsoft Windows PC's, Xbox consoles and PlayStations. Just like they are probably going to count Marathon on Xbox and Microsoft Windows PC. And I am sure they will count Horizon Lego's on Xbox and Switch. And I suspect they count MLB the Show on Xbox, etc. Then I am sure Sony is counting all the PC ports, as well as all the day one on PC games coming up (12 of them), including Helldivers 2 and Concord.

Why not include those figures, it's what generates them revenue!