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Xbox may have been subject to a lot of ridicule this year due to their controversial shift in strategy by porting four former first-party games to competitors PlayStation and Nintendo, but there’s no doubt the Microsoft-owned brand is prospering regardless of the hate.
Microsoft’s FY24 Q3 (Jan-March)earnings callwas held yesterday, and it revealed staggering numbers for their gaming division that prove they’re doing just fine, even without the unexpectedly successful PlayStation-ownedHelldivers 2earlier this year.
Microsoft Shareholders Must Be Happy With Gaming Division
The results of the Microsoft Gaming division’s earnings in the past quarter are quite impressive, with intriguing conclusions to be drawn from them:
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Ever since Xbox closed its $68.7Bmerger with Activision Blizzardlast year, the massive publisher has been clearly carrying an enormous part of the gaming division’s quarterly revenue. Interestingly, with Activision Blizzard’s contribution deducted, it appears the Xbox division was down 4% year-on-year in overall revenue.
The same holds up for the content and services revenue, which gains a huge 61% boost thanks to theCall of Dutyowner. Removing that from the equation shows Xbox’s core services like Xbox Live, Game Pass, etc. only grew 1% in the past year. Regardless, it’s still counted altogether, but the Activision Blizzard merger has been worth its weight in gold for Microsoft.
Hardware Decline & Multiplatform Success May Lead To More Xbox Games On PS5
The more concerning part of the results that ties in perfectly with Xbox’s pivot in their exclusivity strategy earlier this year is the Xbox hardware revenue, which was down 31% year-on-year, the steepest drop-off for the Series X/S consoles since launch. Moreover, Microsoft CFO expects this revenue to decline further, suggesting console demand has dipped sharply.
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Xbox hardware revenue has been in the redfor a while, so it’s no wonder the brand has reconsidered its approach to exclusivity. Outrage from fans aside, though, the strategy shift has clearly worked for them, as Microsoft CEO Satya Nadella commented on its success:
We’re expanding our games to new platforms, bringing four of our fan-favorite titles to Nintendo Switch and Sony PlayStation for the first time. In fact, earlier this month, we had 7 games among the top 25 on the PlayStation store, more than any other publisher.
Sea of ThievesandGroundedhave beentopping the PlayStation pre-order chartsfor a few weeks now. Couple that with other Xbox-owned games likeMinecraft,Call of Duty,Fallout 4, etc. ranking high in sales on PlayStation, and it comes as no wonder that Microsoft must’ve made a boatload of money on software sales in the past quarter.
Nadella’s comment also seems to suggest that they maybring more titles to PlayStationand Nintendo after the success of the initial four. There’s long been speculation about the exclusivity status of tentpole Xbox titles likeStarfield, Indiana Jones, and most recently,Senua’s Saga: Hellblade 2. The impressive results may just sway Microsoft into porting them to PS5.
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With Xbox hardware revenue declining steeply, many are concerned about the platform holder throwing in the towel and becoming a third-party publisher. Thankfully, Xbox has reaffirmed its commitment to hardware, with a next-gen console in the works. Rumors point to itbeing a handheld, but it’s great that they’ll continue to compete with PlayStation, as competition breeds innovation.
Viraaj Bhatnagar
Content Writer
Articles Published :247
A lifelong gamer, lover of cars, and Master’s student of Automotive Journalism, Viraaj Bhatnagar is a gaming writer at FandomWire who aims to be one of the greats. When he’s not hunched over on his laptop typing out copy, he can be found lapping circuits in Gran Turismo or slaying draugr in God of War.
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