Microsoft Earnings Release FY23 Q1: Xbox content and services revenue decreased 3%
Microsoft recently announced its financial report for the first quarter of fiscal 2023, showing that revenue for the quarter was $50.122 billion, an increase of 11% year-on-year; net profit was $17.556 billion, down 14% year-on-year; diluted earnings per share were $2.35, down from $2.71 in the same period last year. Although revenue was slightly higher than market expectations, all key financial indicators showed a decline of more than 10%, which was the slowest growth rate since fiscal 2018.
Among them, the revenue of the Xbox business was $3.61 billion, setting a record for the first fiscal quarter. In addition to good news, there was also bad news. The good news is that Microsoft’s Xbox hardware sales (up 13% year over year) and Xbox subscription services are both up, proving that Microsoft’s platform is quite attractive to gamers. The bad news is that Xbox content and services revenue fell 3% year over year, as Microsoft has invested heavily in first-party game studios, although the quality of output has been lacking.
Microsoft CEO Satya Nadella said nearly half of the gamers who bought the Xbox Series S were new to the Xbox ecosystem.
There has been a lot of criticism of the Xbox Series S in the past due to performance issues, but it turns out that this seems to be an effective way to expand the Xbox player base.
Sony announced at the end of August this year that it would increase the retail price of PlayStation 5 in various countries and regions, believing that in the current global economic environment, the price increase is necessary. Microsoft didn’t follow Sony’s lead at the time, but Phil Spencer, head of Xbox business, said in an interview with the media recently that
Microsoft has been doing its best to maintain prices on its Xbox Series X/S consoles and game subscription services, but it may not last long and will have to raise prices at some point.
