In the April-June quarter, hardware, content and service (subscription) sales were down, even though the Xbox Series outperformed the PlayStation 5 for three quarters!

Microsoft announced its results for the fourth quarter ended June 30 (their fiscal year starts on July 1, three months later than usual!). Although this showed a 12% year-on-year increase in Microsoft’s revenue, it did not meet expectations (and the previous quarter saw an 18% increase for the Redmond-based company). But for us, it’s the Gaming division that matters. It had a 7% decline compared to the April-June 2021 quarter! Hardware sales were down 11%, while Xbox games and services sales were down 6%. There was still an increase in Xbox Game Pass subscriptions (perhaps due to the quarterly one-dollar subscription offer), but Microsoft hasn’t provided further details.

Regardless, Microsoft CEO Satya Nadella gave a very positive statement: “We offer the best value in the gaming industry. Our Xbox Game Pass subscription service includes access to hundreds of games, and Xbox Series S is the most affordable next-generation console. We sold more consoles live-to-date than any previous generation of Xbox and have been the market leader in North America for three quarters in a row amongst next-gen consoles.” So the PlayStation 5 has been beaten in sales… but the stock shortage may paint a distorted picture.

Microsoft has blamed the drop in software sales on lower player retention and monetization of internally and externally developed (i.e. first-party and third-party) games, which is about an admission that Halo Infinite, which was expected to carry Microsoft’s video game division on its back, has failed so far. Amy Hood, Microsoft’s chief financial officer, said the company will also see a 5-7% decline in the next quarter until the end of September.

We should expect a more robust performance from the company, which could take on Activision Blizzard lock, stock and barrel…

Source: WCCFTech