Microsoft hit with gaming revenue decline, but Xbox Game Pass still prosperous

Not exactly filing for bankruptcy just yet

Microsoft released its results for the fourth quarter of its financial year, ending June 30, 2022. The figures show something of a disparity between sectors. While gaming revenue on a whole is down, the Xbox Game Pass subscription model continues to grow, with millions of players utilizing the online service. The news was delivered in an investor earnings call called transcribed by GamesIndustry.biz.

Microsoft gaming revenue fell by some 7% year-on-year, which translates to somewhere in the region of $260 million USD. While this is, of course, a huge figure, it is still a drop in the ocean in comparison to the $3 billion overall revenue generated by the Microsoft brand during the three-month period. In addition, Xbox hardware revenue has decreased by 11%, which is disappointing given that we’re still, essentially, in the honeymoon period of new-gen platform Xbox Series X/S. Despite this decrease, Microsoft states that the new platform is selling faster than previous Xbox generations, and that Xbox currently leading the market in sales over rival platform PlayStation 5.

Microsoft’s ace-in-the-hole continues to be the Xbox Game Pass service, which continues to welcome more subscribers with each passing month. In addition, Microsoft’s recent partnership with Epic Games facilitated four million players logging into battle royale juggernaut Fortnite via Xbox Cloud Gaming, over a million players being entirely new to the Xbox infrastructure. Despite us being instilled into the ninth generation, it seems that — for both Microsoft and Sony — the current success trend lies not so much in the individual hardware and/or software sales, but in the services, game libraries, day-one launches, and other utilities that their respective subscription services provide.

Microsoft Q4 gaming revenues decline, but Game Pass grows [GamesIndustry.biz]