Xbox Console Supply and Lower Engagement Drive Lower FY22 Revenue in Q4

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Microsoft has released its fourth quarter fiscal year 2022 earnings report, and although overall Xbox games revenue was down 7% year-over-year, Xbox would have had its best fiscal year in terms of of income.

The year-end finance for Microsoft were released, and the company said its gaming revenue was down 7% ($259 million) from the same period last year. And despite growth in Xbox Game Pass subscriptions, which Microsoft recently revealed surpassed 25 million subscribers, Xbox content and services revenue fell 6%, with Xbox hardware down 11%. .

Microsoft didn’t reveal any other information about its subscription service, and the company said the drop in revenue was “due to lower engagement hours and monetization of third-party and first-party content, partially offset by the growth of Xbox Game Pass”. subscriptions.”

“With Xbox Cloud Gaming, we’re bringing games to new endpoints. Gamers can now stream games to Samsung smart TVs,” Microsoft CEO Satya Nadella said on the earnings call. “And we’ve partnered with Epic Games to make Fortnite available for free through the browser. Over four million people have streamed the game to date, including over one million who are new to our ecosystem.”

Although Microsoft saw a drop in revenue “on a continuing basis”, according to independent industry analyst DomsPlaying, it was “the highest sales ever for Xbox” and its second best fourth quarter. “Assuming $3.45 billion in quarterly game sales, Xbox’s annual revenue was $16.22 billion.”

Microsoft Earnings Call Reveals Xbox’s ‘Second Best Q4 Ever’

Talk with The edgeMicrosoft’s Director of Investor Relations Kendra Goodenough said, “The decline you’re seeing in Xbox hardware is partly a reflection of the fact that we had that launch…about two years ago, so with the supply constraints that we had seen over the past couple of years, it kind of extended that time frame for consoles.”

Nadella reiterated, “We’ve sold more consoles to date than any previous generation of Xbox and have been the market leader in North America for three quarters in a row among next-generation consoles.”

It’s worth noting that it wasn’t until April that Microsoft announced it had celebrated its “best non-holiday quarter” ever, which saw revenue grow 6% year-over-year to 3, $74 billion.

What do you think of the earnings call? Is it what you expect? Let us know in the comments.

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