Revenues up 6% to $3.74bn in Xbox's best non-holiday quarter to date

gamesindustry.biz:

James Batchelor

Editor-in-Chief

Wednesday 27th April 2022

Microsoft

Xbox

At a glance:

Microsoft has released the results for the third quarter of its fiscal year, showing a strong performance for the company's Xbox business.

For the three months ended March 31, 2022, gaming revenues were up 6% year-on-year. Microsoft added that this is improving on an already solid comparable quarter in 2021, a year that benefited from the recent launch of Xbox Series X|S and some continued stay-at-home measures.

Niko Partners analyst Daniel Ahmad broke this down further, revealing revenues reached $3.74 billion and declaring this the "best non-holiday quarter" in Xbox history.

Ahmad reports Xbox content and services (which encompasses game sales, digital transactions, subscriptions such as Xbox Game Pass, third-party game royalties, Xbox-related cloud services and advertising) accounts for 81% of gaming revenues or around $3.02 billion.

This is 4% up when compared to the same period in 2021, and the first time this segment has generated more than $3 billion during the first quarter of a calendar year.

However, Microsoft's chief financial officer Amy Hood mentioned during the company's earnings call that this growth was "below expectations."

Xbox hardware revenues, meanwhile, rose 14% thanks to both continued demand and increased supply for Xbox Series X|S.

Xbox hardware revenue rose 14% thanks to increased supply

During the call, Hood warned that production shutdowns in China due to the latest spread of coronavirus will likely impact Xbox hardware, as well as Surface and Windows original equipment manufacturing.

Later, when discussing segment guidance, Hood said Microsoft expects gaming revenues to decline by mid-to-high single digits due to "lower