Xbox Just Set A New Record, But It Wasn't All Good News

Microsoft has released its latest earnings report, and it showed a mixed bag of results for the Xbox division. Total gaming revenue fell--including a big 30% drop for hardware specifically--but monthly active users for Xbox reached a new third-quarter record.

Gaming revenue across the board at Xbox dropped by 4%, Microsoft said, while hardware sales slipped 30%. Microsoft said the downturn in hardware sales was attributed in part to a tough comparison to Q3 2022, which Microsoft said benefitted from "increased console supply." Now that Xbox consoles are back in stock everywhere, it seems sales are slowing.

Xbox content and services revenue jumped by 3% during the quarter thanks to Xbox Game Pass subscriptions continuing to grow. However, Microsoft did not share a new subscriber number. In fact, it's been more than a year since Microsoft announced 25 million members in January 2022.

In another positive development for Xbox, Microsoft CEO Satya Nadella said Microsoft achieved third-quarter records for monthly active users and monthly active devices for Xbox, according to The Verge. Microsoft CFO Amy Hood said gaming revenue for the next quarter should grow in the "mid to high single digits." Xbox content and services revenue growth is expected to continue to grow as well.

Microsoft is, of course, a gigantic company with numerous business divisions beyond Xbox. In total, Microsoft brought in $52.9 billion in revenue and made a profit of $18.3 billion.

Less than 12 hours after Microsoft announced these earnings results, the UK's Competition & Markets Authority announced it would block Microsoft's proposed deal to buy Activision Blizzard. The CMA cited concerns around cloud gaming. Microsoft is now appealing the decision.