Microsoft just posted the fourth and final quarter of its 2023 fiscal financial results. The software maker made $56.2 billion in revenue and a net income of $20.1 billion during Q4. Revenue is up 8 percent, and net income has increased by 20 percent. As expected, Windows and devices revenue has been hit hard again this quarter, but Xbox has rebounded somewhat — at least on the content side. Microsoft’s cloud, office, and server businesses continue to make up for a weaker PC market.
Microsoft’s entire fiscal 2023 hasn’t been great for its Windows and devices revenue compared to fiscal 2022. Windows OEM revenue, the price that PC manufacturers pay Microsoft to put Windows on laptops and PCs, has dropped significantly for the entire fiscal year, or four quarters in a row. In Q4, that means Windows OEM revenue fell by 12 percent, which Microsoft says was “primarily driven by the PC market.”
Research firm IDC blames “macroeconomic headwinds, weak demand from both the consumer and commercial sectors, and a shift in IT budgets” for six consecutive quarters of contraction in the PC market. Lower shipments of laptops and PCs have also hit Microsoft’s devices revenues again. Devices at Microsoft includes HoloLens, PC accessories, and Surface devices. Overall devices revenue has dropped by 20 percent in Q4.
Microsoft also makes Xbox devices, which are separated from its other hardware. Xbox hardware revenue has dropped 13 percent in Q4, so it’s likely that Microsoft continues to suffer with hardware supplies and softer demand for its Xbox Series S / X consoles.
Xbox content and services revenue, which includes Xbox Game Pass, is up five percent, though. Overall gaming revenue is also up just one percent. This suggests that Xbox Game Pass has grown year over year, despite Microsoft still not providing updated subscriber numbers.
I hope so because I’m a shareholder and I need to eat in order to play Starfield soon.
Revenues came in at $56.2 billion, up 8 percent from the same period a year ago. Operating income came in at $24.3 billion, up 18 percent from the same period a year ago, and net income was $20.1 billion for the quarter, up 20 percent from the same period a year ago.
I think it’s safe to estimate that they’re now at 25m units or around that, right?
Will see what by the end of this year the growth is like, with Starfield, Forza and likely ABK close. If that doesn’t add significant growth increase, they gotta rethink their console growth strategy, yes they don’t prioritize consoles sales but there should be growth there nonetheless with the upcoming growth factors.
They never made any profit from console sales ever. They will still make consoles cause there a market for it and they don’t want to not have hardware in the console market. They still need the console to sell software. That is where they make the money from. Xbox console is not going anywhere, not as long as Sony and Nintendo still make console.
I don’t doubt that the company that made TWO new generation consoles still values console. But if the Xbox hardware still performs like last-gen despite having so much more to offer than Xb1, then some rethinking in how they position their consoles should happen. I would like to see at least this generation to be 3:2 split instead of 2:1
We’ll see… I have a hard time seeing Series consoles selling less than Xbox One.
Xbox One gen literally had few 1st party games for most of it life time. A lot of them games were pretty low scoring and did not gain any mindshare.
Series console still have many heavy hitters coming soon. Starting with Starfield and Forza Motorsport this year. Avowed, Hellblade 2 etc… next year, plus ABK games, plus whatever other Devs or Publisher they will buy. There is no way Series sales less than Xbox One, unless everyone just buys Xbox 1st party games on PC.
I cannot see how Series consoles will sell less than Xbox One. Upcoming Series Console games are just miles better than what Xbox One offer in its lifetime.
The number they gave, iirc 22m by the end of 22, tracks better than the XB1 in the same period, yes I see that, yet I don’t want the XB1 to be the comparison point tbh, this deserves to be the biggest Xbox generation in console sales.