Xbox Q4 Earnings Released - *Spoiler* Everything Is Down

“Over on the Xbox side, hardware revenue fell 11 percent, alongside a 6 percent dip in Xbox content and services revenue. Microsoft attributed the services declines to “lower engagement hours and monetization” across both first- and third-party titles.”

“The decline you’re seeing in Xbox hardware is partly a reflection of the fact we had that launch... about two years ago, so with the supply constraints that we had seen over the last couple of years it has kind of extended out that period for consoles,” say Goodenough. “We’re still seeing strong demand, but coming off those highs that we saw in the last couple of years with the launch.”

They are comparing earnings down to last qtr or last year same period?

I guess this means everything is up for the competition.😎

@goldenelementxl: 2021 was covid wfh year

Yeeeees.

One step closer for Xbox grave

Narrator - “It wasn’t“

The most interesting bit imo is, “Microsoft attributed the services declines to “lower engagement hours and monetization” across both first- and third-party titles.” We are clearly seeing holes in the MAU (monthly active users) strategy. Ultimately, Xbox needs folks to spend money. If MAUs were all that mattered, Netflix wouldn’t be going after people sharing their passwords. Folks are subbing to Game Pass, and thats it… (And not as many as they hoped…) And when their games are monetized the way Halo Infinite is, it’s easy to see why folks aren’t spending the money… Games like Fortnite and Apex generate tons of cash. But they’re also updated incredibly with content busting through the seams. Halo is the polar opposite of that.

It's been a pretty uneventful quarter so not surprised. Late summer and fall seem promising.

Probably a mix between people not being home anymore and a threats of a global recession.

Game Pass

This what happens when delaybox series x only have c rated games to play since launch. Meanwhile at Sony and Nintendo, they are printing cash 😂

No AAA releases, pandemic restrictions lifted, most of the customers are buying the cheapie console, Halo fizzling and the current customers being WAY too dependent on Game Pass and spending less money? I'm shocked I tell you. Surely they'll get that money back if they waste billions more on publisher purchases out of asshurt, right?

So, your are saying that Xbox competitors who are not doing the things you are implying as the cause for the lower numbers would have results that are different?

My level of concern is immeasurable.

IF Sony has lower numbers, it's just out of not being able to put new consoles out there, period. Xbox has plenty of Xbox Series S(hit) consoles to unload on the market to prop themselves up. And they've been discounting them too. That revenue is trending downward for a reason

So, Sony would have lower numbers because of the lack of consoles despite selling more consoles and releasing all of their first party games this year on PS4 and PS5. That is the reasoning you are going to run with?

It is about time some show concern. 😓

@Pedro: I’m trying but it is just so difficult to muster any. 😅

The generation is moving on, and despite first party games still being on PS4, the splits are hugely in favor of PS5 at current. New PS4s aren't really being manufactured anymore and they're not a wise investment as games are making the current gen only leap. The PS4 is not a Series S, it doesn't serve that same function.

Then where is the justification for potentially lower numbers because of lack of consoles if their games are being sold on both PS4 and PS5?

What do mean the PS4 doesn't serve the same function as the Series S? Doesn't it play the latest games from Sony such as Horizon Forbidden West and Gran Turismo 7?

Sony could have similar numbers, but they are leading 2022 in hardware revenue. So if their numbers are bad, that’s not the reason. They‘ve also had pretty good software sales… Nintendo has had decent hardware and software numbers too. We won’t know about those two until next week. But we do know the industry as a whole, PC included, was down single digits yoy

You're being dense on purpose. The Series S is MS's "next gen" console. Whatever is developed for Xbox is made to play on both Series consoles. Only one with compromises. Games like the next Final Fantasies, Ratchet, Sony's remakes and others aren't being developed for last gen. The same reason MS is moving on from the One

We are talking about this year no? This year Sony released their first party games on PS4 and PS5. PS4 plays the latest games from Sony. Sony currently has an install base that includes all of PS4 and PS5. So, I am not seeing the argument of Sony having lower numbers due to lack of supplying PS5s.

@goldenelementxl: Also from that article:

"Xbox also had its best fiscal year ever in terms of revenue, at around $16.2 billion for the entire fiscal year."

That Nadella quote doesn’t make much sense…

“Overall gaming revenue at Microsoft declined 7 percent, year over year.” “hardware revenue fell 11 percent, alongside a 6 percent dip in Xbox content and services revenue.” How can all the revenue fall yoy the last 2 quarters, and they’re still up?

Then there’s just factually incorrect statements like, “Nadella says Microsoft has “been the market leader in North America for three quarters in a row among next-gen consoles.” We know that’s not true. PS leads in revenue and Nintendo leads in unit sales… Last weeks NPD info says so… Unless Nadella is strictly speaking unit sales and excluding Nintendo, which would be on-brand for a Xbox PR statement 🙄

“Microsoft’s guidance for fiscal Q1, 2023 sees gaming revenue and Xbox content and services revenue both declining again next quarter, though.”

This is another one of those PR tactics. Lead with some ”good” news before breaking the bad news. Too bad the “good” news is easily proven wrong… You can look through the earnings report slides...

@goldenelementxl: A given quarter being down year over year while still having a great year is entirely possible.

Previous year:

Q1, you sell 800

Q2, you sell 800

Q3, you sell 800

Q4, you sell 1000

Current year

Q1, you sell 1200

Q2, you sell 1200

Q3, you sell 1200

Q4, you sell 800

Previous year, you sold 3400, this year you sold 4000; but your Q4 year over year was lower.

@dabear: They were down in Q3 as well. And their Q2 result was ”the best quarter excluding 4th Q’s”

I just looked up last years fiscal year results. $16.28 Billion, vs $16.2 Billion in 2022…

In 2021, “the Xbox division produced revenues of $ 16.28 billion, up 17.7% over the previous year.” - Phil Spencer

I knew the news of this was bad, but to see all the lems here having a end of days like meltdown is a sight to see.

It's been a really good time to work on backlist, I am going to be busy with new stuff from end of August to end of year. Next planned pick-up is Soul Hackers 2 at end of August. New season 4 content to Aliens Fireteam Elite drops soon plus the expansion DLC too. September is WH40K Darktide and I am hoping that will keep me busy a while and given the game's nature likely mix it up between other offerings. I'll be revisiting Halo Infinite to co-op with friends when that updates. October is the packed month. Scorn, Persona 5, Bayonetta, Plagues Tale Requiem, new xhapter in Dark Pictures Anthology (Devil In Me), and in December Callisto Protocol. And stuff I am probably forgetting and/or will show up on my radar with time, but safe to say this lull won't last.

Though I haven't played tons of new games early this year, the ones that kept me busy longest have been meaty. Dying Light 2 kept me busy for several weeks. I took a break from Elden Ring for while and have been hammering away with that these last couple weeks. If I can finish that soon I might be able to finish something else or two before all hell breaks loose.

I am not sure how your math differs from the whole entire internet

https://www.theverge.com/2022/7/26/23278933/microsoft-q4-2022-earnings-revenue-cloud-windows-xbox-gaming-surface

@daredevils2k: What @dabear quoted is in the article. The quote isn't factual, but it's in the article... I wish we could see a breakdown of that $16.2 number, because hardware only made up like $3 billion of that number, and everything else that contributed to the 2022 total was down as well. I feel like it doesn't add up, but without a breakdown, it's just speculation...

Right? It's not like Xbox has ever operated with profits in mind. It's a money sink. Xbox is powered on tech-bro pride, so it's never going anywhere 🤣

Game Pass subs continue to climb

I mean, if I was 1000X mooaar Concerned, I'd be TC. lolol :P

@x_hedon:

So 16.22>16.28? I provided a link of them saying they made $16.28 in 2021… Straight from Phil’s mouth…

They were either wrong about the 2021 revenue, or they‘re purposely wrong now…

That's just too funny. :D

I know its to late to stop cows wanking over this news,but before you reach for your wank sock again....MS could buy Sony Playstation with its loose change.

Ah well it was good while lasted eh cows 🤣

Chin up you got a remaster of a remastered remaster for 70 dollars to look forward to👍

I guess you just don't know everything there is to know behind the stats I am afraid.

Call me when Xbox is the defunct. I have been waiting years for its supposed demise.

@daredevils2k: The whole internet is you linking the same article.

Cows...

Xbox is doomed..

@x_hedon: don't bother..

When financial reports show decline across the board, "the numbers don't lie"..

When financial reports show growth across the board, "Microsoft is being funny with the numbers", "don't fall for the PR", and "we need more information"..

In either case, be concerned..

They're buying everything but you're still sitting up bone dry on AAAs. If it weren't for MS buying up pubs, they couldn't develop the talent if they tried.

Phil is quoted as saying their 2021 fy revenue was 16.28 billion!

Nadella is quoted as saying their 2022 fy revenue is their highest ever! 16.22 billion... Huh?

@x_hedon provides published graphs showing the 2021 fy revenue at 15.37... What happened to the 16.28?

And you're coming after me?!?! Xbox is supposedly missing $910,000,000!


Jokes aside, x_hedon's pics are from a Twitter, Derek Strickland from TweakTown, not an offical Xbox source. Xbox said, on the record, multiple times in 2021 that their revenue was 16.28. Meaning they are down in 2022, and their numbers AREN'T record breaking.

Didn't Sony buy Naughty Dog, Bungie, Insomniac Games and Guerilla Games?

Yup. None of them are pubs, yet they're all releasing content too. S-tier studios that are a constant reminder of what Xbox lacks