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Xbox + Microsoft FY23 Q3 Results: Total Gaming -4% ($3.607B), Content & Services +3% (Game Pass growth), Hardware -30% | Subs Nearly $1B

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Gaming revenue decreased $133 million or 4% driven by a decline in Xbox hardware. Xbox hardware revenue decreased 30% on a strong prior year comparable, driven by lower volume of consoles sold. Xbox content and services revenue increased 3% driven by growth in Xbox Game Pass.

The following graph is my own with calculated splits between Content & Services and Hardware

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Microsoft Overview
  • Revenue was $52.9 billion and increased 7%
  • Operating income was $22.4 billion and increased 10%
  • Net income was $18.3 billion and increased 9%
  • Diluted earnings per share was $2.45 and increased 10%
Productivity and Business Processes was $17.5 billion and increased 11%
Intelligent Cloud was $22.1 billion and increased 16%
More Personal Computing was $13.3 billion and decreased 9%

FY23 Q3 - Press Releases - Investor Relations - Microsoft
 
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Hardware down as expected, Xbox has a good quarter in 2022.

Still at least Gamepass had growth, that's good with hardware sales down
 
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Xbox Revenue for Q3 2023 Fiscal Year
Total Gaming: $3,607,000,000
Content and Services: ~$3,100,000,000
Hardware: ~$507,000,000
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Fairly decent results overall. Hardware is bad but not a surprise for anyone on this forum I should think.
 
Baki said:
Not a good quarter for Xbox and I think Phil’s days are numbered. Literally the only MS division to have a revenue decline.
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Jumping the gun a bit no? They will have just acquired ABK tomorrow, or close to tomorrow.
 
Not a terrible result over all but that hardware result is shocking at this point in the system's life. They need to get it sorted out ASAP.
 
That hardware number is super poor. Like holy. The other metrics are surprisingly decent despite the bad hardware result.
 
MegaXZero said:
Yeah at least the other numbers didn’t cave with hardware. The bells are ringing but at least it isn’t ear piercing, yet. Still they are probably banking on starfield moving units.
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The Diablo IV bundle should help out in June too. Hopefully, they'll be able to kickstart a new momentum over the upcoming months between their Showcase, Diablo and Starfield.
 
Hardware numbers are really bad. I guess Xbox Series S is not attractive enough and there's a shortage of Xbox Series X in US and other key markets? 😐
 
Pancracio17 said:
Jumping the gun a bit no? They will have just acquired ABK tomorrow, or close to tomorrow.
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Expectations are likely sky high for the Xbox division. Surprisingly, it's received the most investment ($80B) out of all the current MS divisions, despite being one of their smallest and slowest growing divisions. ABK brings in a management team with a proven track record in gaming. Bobby Kotick might become the CEO of the Xbox division in the near future.
 
Having the split between Xbox Game Pass players per device would help to understand how Content and Services whitstood the impact.

PS: feeling for the 10,000 poor people fired by a company making a profit of $18300000000 in just 3 months.
 
Baki said:
Bobby Kotick might become the CEO of the Xbox division in the near future.
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Bobby is out once the ink is dried and formalities set. Bobby has way too much (disgusting) baggage and not worth it for Microsoft compared to the guy that netted them Minecraft, Bethesda, and soon (maybe) Activision Blizzard.
 
Checked the previous earnings since the Bethesda acquisition and if I'm not mistaken, the Game Pass segment saw continued growth each quarter.

September 2020: 15 million subscribers
Q1 2021 "continued momentum"
Q2 2021: growth
January 2021: 18 million subscribers
Q3 2021: growth
Q4 2021: growth
Q1 2022: growth
Q2 2022 growth
January 2022: 25 million subscribers
Q3 2022: growth
Q4 2022: growth
Q1 2023: growth
Q2 2023: growth (Nadella saying "new highs")
Q3 2023: growth

The Riot deal probably produced good results on PC.

I think it's safe to expect another growth next quarter since Game Pass just launched in 40 new countries some days ago and their first-party games are (finally) starting to release.

Plus if they can add the COD library soon once ABK closes, this may also boost the numbers significantly.

Also their Game Pass family/friends plan should probably arrive soon since it's being tested in some countries.
 
Baki said:
Bobby Kotick might become the CEO of the Xbox division in the near future.
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No way Microsoft will empower Bobby with all his baggage, the guy is responsible for the crisis that made Activision become "cheap" enough for being bought.
 
Shezard said:
Having the split between Xbox Game Pass players per device would help to understand how Content and Services whitstood the impact.

PS: feeling for the 10,000 poor people fired by a company making a profit of $18300000000 in just 3 months.
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Alphabet.
12,000 layed off and $70bn share buyback just announced.
 
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SkyerIst said:
Hardware numbers are really bad. I guess Xbox Series S is not attractive enough and there's a shortage of Xbox Series X in US and other key markets? 😐
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Maybe in US ( even though i'm seeing XSX in stock very often in Amazon in last month and a half, despite it is FH5 bundle in majority), but in EU and UK, nah. XSX is readily available across EU and UK.

I've expected lower hardware sales, but not THAT LOW
 
1st_horseman said:
Maybe in US ( even though i'm seeing XSX in stock very often in Amazon in last month and a half, despite it is FH5 bundle in majority), but in EU and UK, nah. XSX is readily available across EU and UK.

I've expected lower hardware sales, but not THAT LOW
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Looking at Amazon UK, France, Germany and Spain, only the Forza bundle is available.
 
allan-bh said:
Looking at Amazon UK, France, Germany and Spain, only the Forza bundle is available.
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It counts. But also, Mediamarkt operates in few countries in EU, it is available there too.
 
MegaXZero said:
Bobby is out once the ink is dried and formalities set. Bobby has way too much (disgusting) baggage and not worth it for Microsoft compared to the guy that netted them Minecraft, Bethesda, and soon (maybe) Activision Blizzard.
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It's easy to buy companies when you have a blank cheque book. It's much harder to build and grow a company. Kottick took Activision from nothing to the biggest 3rd party publisher in the world and has shown that he has the experience in integrating companies successfully (Blizzard, King). If MS thinks they can sweep it under the rug, and if Kottick wants the job, I think it's very likely that they make Kottick the CEO of Xbox.

allan-bh said:
No way Microsoft will empower Bobby with all his baggage, the guy is responsible for the crisis that made Activision become "cheap" enough for being bought.
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Baggage is an issue but enough time might've passed to sweep it under the rug. I'm not an advocate for this, I'm just giving my view on what I think might happen.
 
Baki said:
It's easy to buy companies when you have a blank cheque book. It's much harder to build and grow a company. Kottick took Activision from nothing to the biggest 3rd party publisher in the world and has shown that he has the experience in integrating companies successfully (Blizzard, King). If MS thinks they can sweep it under the rug, and if Kottick wants the job, I think it's very likely that they make Kottick the CEO of Xbox.



Baggage is an issue but enough time might've passed to sweep it under the rug. I'm not an advocate for this, I'm just giving my view on what I think might happen.
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Let's refocus the discussion on the actual Xbox results. If we get any news on Spencer departing, then we'll gladly reopen this topic, but it is way too premature as is :)
 
SoonyXboneUhh said:
Alphabet.
12,000 layed off and $70bn share buyback just announced.
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I hate large share buybacks as an investor. Small buybacks to offset dilution from stock based compensation makes sense. Beyond that, it just signals to me that management has run out of ideas to grow the company and is relying on cheap tactics to boost stock price.
 
allan-bh said:
It's more expensive, for consider Series X stock as normal the 499 SKU should be widely available. Also I don't know if in UK and EU you can easily find a Series X walking at retail.
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Mediamarkt and Saturn are operating in few EU countries ( Mediamarkt much more ) and XSX is available there. Anyway, FH5 bundle counts. People here were counting more expensive PS5 bundle when vanilla version was out of stock. So, no need to ignore XSX FH5 bundle.
 
1st_horseman said:
Mediamarkt and Saturn are operating in few EU countries ( Mediamarkt much more ) and XSX is available there. Anyway, FH5 bundle counts. People here were counting more expensive PS5 bundle when vanilla version was out of stock. So, no need to ignore XSX FH5 bundle.
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PS5 had enough demand to push a more expensive bundle. It's not the case of Series X, specially bundled with a game free on game pass, so we need to see the standard model widely available before judge the current state of sales.

Only thing we know for sure is that people don't want Series S right now.
 
Xbox subscription revenue was nearly $1B this quarter.
 
At least the software selling like it did means that gamepass and the userbase are still going strong, even if interest in the box itself isnt as strong. Were probably seeing the benefits of subscriptions and PC releases here.
 
allan-bh said:
PS5 had enough demand to push a more expensive bundle. It's not the case of Series X, specially bundled with a game free on game pass, so we need to see the standard model widely available before judge the current state of sales.

Only thing we know for sure is that people don't want Series S right now.
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No. Same happened with PS5. Vanilla version was out of stock, forced PS5 bundles were harder to sell and available, but it counted as PS5 is in supply. Same is applied to XSX, but XSX FH5 bundle is an official one, not forced like it was the case with PS5s. Anyway, vanilla XSX is available at Mediamarkt and Saturn. But GAME has decent amount of XSX forced bundles

Xbox Consoles | Xbox Series & Xbox One Consoles | GAME

Find the perfect Xbox console to suit your gaming needs from the next gen Xbox Series X & S to the popular Xbox One. Discover the world of Xbox at GAME today!
www.game.co.uk www.game.co.uk
 
Likely only 1M Xbox consoles shipped this quarter. Depending on the revenue split between accessories and consoles.
 
Seems like Q3 was the second best Q3 in Xbox history. Yeah, Phil isn't going anywhere and Game Pass will continue to grow especially if Microsoft can start releasing their first party titles.
 
Microsoft says FYQ4 2023 Gaming revenue growth in the mid to high single digits (4-9%) with Content and Services to grow in the low to mid teens (11-16%)
 
Welfare said:
Microsoft says FYQ4 2023 Gaming revenue growth in the mid to high single digits (4-9%) with Content and Services to grow in the low to mid teens (11-16%)
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Yeah, Minecraft Legends, Redfall, Ghostwire Tokyo and most of all, Diablo IV will definitely add to the revenue that Microsoft will earn in Q4.
 
Lelouch0612 said:
Looking at -5% to 0% for hardware then ?
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Funny enough, this quarter's results would fit the Q4 guidance.

$3.6B total would be +4%
$3.1B C&S would be +12%
$500M Hardware would be -27%

If total revenue is closer to 3.7B and C&S doesn't go up from this current quarter, hardware would be down 12%
 
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