Xbox hardware revenue down 30% compared to last year

Microsoft has announced its latest financial results, and the report indicates a big downturn in Xbox hardware revenue - though that downturn has been partially offset by growth across the rest of the Xbox brand.

"Xbox hardware revenue declined 30% on a prior year comparable that benefited from an increased console supply," Microsoft says in its earnings slides. This report covers the three months from January 1 through March 31, 2023, and compares against numbers for the same period in 2022.

As the report indicates, Xbox Series X can still be difficult to find owing to supply issues. While you can readily buy a PS5 these days at regular retail price from stores like Amazon, the Xbox Series X is typically only available in pricier bundles or as part of special invitation purchases.

Regardless of the hardware decline, "Xbox content and services revenue grew 3% driven by growth in Xbox Game Pass." Microsoft's overall gaming revenue was down by 4%.

It's a similar story to what we saw last quarter, with a hardware downturn again offset by Xbox Game Pass growth, but overall gaming revenue had taken a much larger 12% dive in that period.

Console warriors will be quick to put on their financial analyst hats to decide whether this spells doom and gloom for the current Xbox generation, but there are a host of factors that complicate any simple reading. We don't know the nature of Xbox's supply issues. We do know that Xbox Game Pass is a big focus for Microsoft's gaming endeavors, and that service is not exclusive to Xbox hardware.

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