Xbox Hardware Revenue Down 30% in Q3 Fiscal 2023

Xbox Series X

Microsoft’s Q3 fiscal 2023 earnings results have revealed Xbox hardware revenue down 30%. It’s the lowest quarterly console sales figure since the launch of Xbox Series X/S consoles in 2020, which suggests that Xbox is struggling with supply constraints once again. Microsoft also revealed that its Gaming Revenue has declined by 4% and the Content and Services Grew by 3% Driven by Growth in Game Pass Subscribers. 

The good news is that this drop is a relatively minor one and will likely be masked by the growth of Xbox Game Pass subscribers. This service also reaches non-Xbox devices, and it’s a big part of why Xbox is still generating a healthy amount of revenue for the company.

However, this means that Xbox will need to continue to focus on cloud gaming and digital game sales. These are two areas that are likely to remain a priority for the company in the coming years, and it will likely take the help of Xbox Game Pass to get through this period of uncertainty.

Another positive is that Xbox 365 consumer subscriptions have grown 12 percent this quarter, up to 65.4 million. This is an increase over the 63.2 million that Microsoft reported for the same quarter last year, and it’s likely due to the company offering a $1.99 a month subscription earlier this year.

Finally, Xbox content and services revenue was up 3% thanks to a rise in Xbox Game Pass subscribers. This isn’t necessarily a bad thing, as it shows that the company is focused on games that can drive sales across Xbox and other platforms. It’s also a sign that the growth of the Xbox Game Pass service is paying off in other ways, as it’s giving developers more visibility and access to users.