Xbox Sales Decline, But Microsoft Gaming Revenue Soars

Recently, Microsoft’s latest financial report revealed a 51% increase in the company’s total gaming revenue following its acquisition of Activision Blizzard, with 55% of this growth attributed to Activision Blizzard’s games. Regrettably, Xbox hardware sales have declined by approximately 30%, and Microsoft executives anticipate this downturn will continue into the next quarter.

Next-generation Xbox console

According to tech4gamers, Microsoft’s Chief Financial Officer Amy Hood expects a further decline in hardware revenue next quarter. The current fate of the Xbox console is quite concerning, whether compared to competitors or in terms of its own sales trajectory over time. However, Microsoft attributes the decline in Xbox sales to a contracting global console market. Nonetheless, thanks to Activision Blizzard, Amy Hood predicts a 40-50% increase in Microsoft’s total gaming revenue.

Moreover, Microsoft CEO Satya Nadella has reaffirmed the company’s commitment to releasing more games on other platforms. He also noted that Xbox games are selling well on PlayStation consoles. Regarding the Game Pass subscription service, Satya Nadella stated that it now boasts over 35 million users. tech4gamers contends that without Activision Blizzard, Microsoft’s recent surge in gaming business would not have been possible, as Activision Blizzard’s games have become the largest source of Microsoft’s gaming revenue.

It is important to note that sales of this generation’s Xbox consoles continue to decline, and according to tech4gamers, following this trend, the Xbox Series S|X might ultimately underperform compared to the Xbox One series, which has been considered the least successful generation of Xbox products. However, in an attempt to reverse this downturn, there are reports that Microsoft may release its next-generation console ahead of schedule.